More Trade with Red China

Ever since the end of the Korean war, the United Nations' dike against trade with Communist China has grown steadily weaker. Last week the cracks became a chasm. In London the British Foreign Office announced that it would allow all colonial governments to resume shipments of rubber to Red China, and added privately that "we intend to resume trade on as many fronts as possible without allowing China strategic materials it cannot get from Russia." In short order, Malaya issued permission for each concern to sell up to 2,000 tons to the Chinese Communists; Indonesia announced that it would sell not only rubber but supplies of oil and tin as well, while Japan also planned to boost its China trade. Said Britain's control officer in Hong,Kong: "I would call it the beginning of the end of the sentimental embargo."

The news was no shock to the U.S. Much of the muscle had already gone out of the embargo in 1954, when the U.S. agreed to reduce the embargo list for Soviet Russia and her European satellites to 170 strategic items (TIME, Sept. 6, 1954). Thus, though China itself was still forbidden a list of some 450 items, there was nothing to stop the Russians from buying and passing along a wide range of banned goods. The attrition increased when the U.S. tacitly agreed to the use of an "exceptions procedure" by which Western businessmen could claim that any item sold Russia was an "exception" to the embargo, sell it to China as well. Using the device, Japan sold 15,000 tons of galvanized steel to China in return for coking coal, while Britain shipped 4,000 tons of steel plus at least 60 tractors. Last week's action was merely notification that U.S. allies intend to widen the use of exceptions to include many items--chemicals, farm machinery, nonferrous metals, etc. Said a U.S. State Department spokesman: "There will be an increasing use of exceptions, and we "will be kidding ourselves if we don't face that probability."

Actually, few realistic Britons look for any big, immediate boost in Red trade. Though China was once a big market, trade slumped last year to a bare $22.3 million worth of exports, and the Communists have offered little so far either in barter or cash. When a Red delegation arrived in London in 1954, all it had to trade was benzoated (preserved) egg yolks, leopard skins and human hair while demanding locomotives, steel and heavy vehicles. As for cash, Red China's sterling balance is only some $280 million, a figure which would be quickly liquidated by shipments of rubber and expensive machinery. Even Singapore's and Hong Kong's China traders look for no swift bonanza. In recent years, China has oriented its trade, like its politics, almost exclusively toward the Soviet bloc, is not likely to shift in a hurry. Wrote Singapore's Straits Times, with only a modest cheer: "No doubt there is a tremendous potential market in China, but it is a long way off."

This file is automatically generated by a robot program, so reader's discretion is required.