Labour’s Last Years, 1949-1951
The creation of the North Atlantic Treaty Organization (NATO) in April 1949 marked a subtle but certain ‘shift of emphasis’ in British foreign strategy. By solidifying the Anglo-American alliance, the British government’s ‘two objectives, Western preponderance and being a third world power, could be pursued simultaneously’, although the former would be prioritized if forced to choose. Or, as the Foreign Office put it, Britain ‘must show enough strength of national will and retain enough initiative to maintain her position as a leading world power, and, as such, influence United states policy’.4
This shift directly impacted colonial policy. For example, in 1950, the Cabinet decided to prioritize the defence of Western Europe over that of the Middle East, based not on Britain’s military needs but on the requirements of maintaining Britain’s influence in the American-dominated alliance.5 This was certainly not withdrawal from the Middle East; in fact, the chiefs of staff determined that Cyprus was so strategic that Britain had to retain full sovereignty indefinitely.
Regarding Hong Kong, the newly formed Permanent Under-Secretary’s Committee (responsible for long-term foreign policy planning) believed that the Anglo-American alliance ‘would be least effective in Asia and the Far East’, where ‘American naivety and selfishness were particularly evident’.6 Thus the British government took it upon themselves (while also seeking greater US involvement) to create ‘a kind of Marshall Plan for Asia’, by which assistance and aid towards the development of Asian countries would help contain the spread of Chinese communism. This approach was also applied to European colonies in Asia, especially regarding French Indochina and the Dutch East Indies.7 When greater US involvement in Asia did come, with the outbreak of the Korean War in 1950, the British sought to leverage their imperial position to restrain US bellicosity. Hong Kong was a key bargaining chip in this process.
Before then, however, the fall of the ROC to Mao’s forces in October 1949—which nearly doubled the size of the communist bloc—considerably tested the Anglo-American alliance.8 The divergence in policies towards China came down to the difference between American and British interests in the region. For the US, ‘it was the loss of American influence that was of critical importance’, and this as well as domestic public opinion against the PRC dictated a policy of ‘continued recognition of the KMT regime and non-recognition of the communists’, which would last until 1979.9
For the Labour government in Britain—which had debated if, when, and how to recognize a communist regime long before the ROC’s downfall—it was hoped that recognition of the PRC would protect British trade with China and its forecasted growth, not to mention Hong Kong’s lucrative position therein. Moreover, Bevin and the Foreign Office were convinced that the PRC, despite potentially causing problems regionally, would and could resist becoming a Soviet satellite.10
What concerned the Foreign Office, as well as the Colonial Office, was public recognition of the new regime. In a joint note, both offices expressed their fears that recognizing the communists would boost the morale of ‘Communist bandits’ as well as confuse the Chinese population in Malaya and elsewhere. The commissioner-general for Southeast Asia, the high commissioner for the Federation of Malaya, the governor of Singapore, the British ambassador to China, the officers administering the governments of North Borneo and Sarawak, the Colonial Office, and the Foreign Office all agreed that the ‘Chinese Communist Government must be distinguished from the Communist terrorist movement in Malaya’.11
This was, however, a delicate argument, which could easily have been construed to demonstrate British support of some forms of communism. The Colonial and Foreign Offices stressed that recognition
does not mean that we approve of Communism. For we consider Communism to be the means whereby the Russians seek to expand and to dominate all Asian territories. As such Communism is the enemy of all genuine nationalism, since it seeks the domination of nationalism by alien influence. [...] The danger to China is Russian penetration and domination.
British policy, the note argued, should ‘avoid any suggestion that any tendencies towards Titoism or independence of the Kremlin exist in the Chinese Government’, while actively encouraging it.12 After much coordination with the British Empire and Commonwealth and despite American disapproval, Britain recognized the PRC as the de jure government of China on 6 January 1950.13
Notwithstanding frustrations in the US, it was the outbreak of the Korean War some six months later, on 25 June, that ultimately defined Anglo-American relations in Asia. While most recently interpreted by scholars as first and foremost a civil war, the contemporary view was that Kim Il Sung’s North Korea invaded South Korea ‘at the instigation of, or with the connivance of, the Soviet Union’ as a test of US resolve, a boost to communism in Asia, and a blow to Western prestige in the colonial world.14
Two days after the invasion, US President Truman ordered the Seventh Fleet into the Taiwan Strait to protect the KMT, now in Taiwan, from further attack from the CCP. This reaction, as indicated by Sir Oliver Franks, the British ambassador to the US, replaced Pax Britannica with Pax Americana in Asia.15 Or more accurately, Cold War Asia’s hot conflicts would from 1950 onwards be associated more with US imperialism than European colonialism. Nevertheless, in order to demonstrate its usefulness in the wider Cold War and to resist communist imperialism in Asia, Britain threw its somewhat reluctant support behind the US and eventually used Hong Kong as a support base for British military and naval campaigns in Korea.16
Another reason for giving support was to secure and then to influence further US actions in the region. For example, three days after the invasion of South Korea, the US government sent to the British Foreign Office the text of its upcoming public announcement regarding the hostilities. The text condemned ‘centrally-directed Communist imperialism’ which now ‘passed beyond subversion in seeking to conquer independent nations and was now resorting to armed aggression and war’. Although not wanting ‘to discourage [the US] Government from helping us and the French in resisting Communist encroachments in Malaya and Indo-China’, the British Cabinet was keen to dissuade the Americans from using this sweeping statement as well as references to other ‘Communist encroachments in other parts of Asia’ in the speech. The Cabinet feared that such an announcement would
present a major challenge to the Soviet Government; [...] would bring into controversy other issues which had not yet been brought before the Security Council; and [.] embarrass the United Kingdom Government in their relations with the Communist Government of China and might even provoke that Government to attack Hong Kong or to foment disorder there.17
Washington acquiesced and ‘watered down’ the statement, changing ‘centrally-directed Communist imperialism’ to ‘communism’, thereby avoiding an overt accusation of the Soviet Union.18
As the Korean War dragged on and as the US attempted to organize greater Western commitment via the UN, British policy-makers sought to restrain American enthusiasm. In November 1950, Attlee explained to the Cabinet that: it was of the first importance that the United Nations should not be trapped into diverting a disproportionate effort to the Far East. Their operations in Korea had been important as a symbol of their resistance to aggression; but Korea was not in itself of any strategic importance to the democracies and it must not be allowed to draw more of their military resources away from Europe and the Middle East.
On the other hand, Attlee reasoned that full withdrawal of British support would probably prompt the US to respond in kind in Europe. Thus, Attlee argued, ‘[t]he wisest course would probably be to continue to resist the Chinese forces in Korea, but to seek to limit hostilities to Korea and refrain from any attacks beyond the Manchurian frontier’, lest the Soviet Union be provoked in overtly joining the war. Attlee concluded that ‘we must be prepared, if necessary, to accept American leadership in the Far East’.19
This was easier said than done. One of the main British concerns was that the US might intensify its economic warfare against the PRC, from its November 1949 ‘embargo on strategic goods only [...] to a total embargo on all trade with China’, which in fact came in December.20 Worse still came on 18 May 1951, when the US pushed through the UN a strategic embargo against the PRC for its intervention in Korea.21
Generally, as Malcolm MacDonald, the commissioner-general of Southeast Asia and former secretary of state for the colonies, warned the Foreign Office in December 1952, the US’s ‘fundamental generosity and idealism’ was seriously undermined ‘by the clumsiness of their methods and the deep seated fear amongst Asians that the American attitude to China may lead either to an extension of the Korean War [...] or to a general war’. For MacDonald, Britain must ‘exercise a restraining influence where possible’.22
These regional concerns and their geopolitical consequences directly threatened Hong Kong and the future of British rule. As John Carroll has argued, ‘the greatest threat to Hong Kong’s economy in the years after the 1949 revolution came not from the Chinese communists but rather from the United States’.23 Not only did trade between Hong Kong and China decrease significantly due to US-instigated embargoes, but Hong Kong’s trade with the rest of the world also became encumbered. This played out in relatively minor (and perhaps amusing) ways; for example, considerable debate was had ‘to decide whether the meat products from chicken or ducklings hatched in Hong Kong from eggs imported from the PRC should be deemed to have sufficient capitalist pedigree for export to the USA’.24 However, given that trade was colonial Hong Kong’s raison d’etre and that the colonial government depended on economic prosperity to avoid local discontent and instability, the embargo was a serious threat to British rule.
In the end, however, these embargoes were ‘a blessing in disguise’, as they stimulated the industrialization of Hong Kong.25 The US embargoes also increased for the PRC the importance of maintaining the status quo regarding the colony. By 1952, 90 per cent of China’s import trade with non-communist countries came from Pakistan and Egypt (cotton), Ceylon (rubber), Macao, and Hong Kong (medicine, industrial machinery, and fabric dyes). Zhou Enlai, the PRC’s premier, thus sought to uphold the colony’s capitalist system and to build relations with Hong Kong entrepreneurs.26