China’s Foreign Relations After Tiananmen: Challenges for the U.S.
NBR Analysis vol. 1, no. 3

China's Foreign Relations After Tiananmen
Challenges for the U.S.

by Harry Harding, Robert S. Ross, and Allen S. Whiting
December 1, 1990

The tragedy that unfolded around Tiananmen Square in June 1989 had an immediate impact on China’s foreign relations. Together with its allies, the United States quickly imposed a series of diplomatic and economic sanctions against China. The details of those sanctions varied from country to country, but in general they involved the suspension of high-level official visits, official development assistance and export credits, and sales of military and police equipment. The relaxation controls on the transfer of advanced technology to China, both by individual governments and by the Coordinating Committee (COCOM), was also postponed. Under pressure from the United States and members of the European Community, the World Bank and the Asian Development Bank agreed to halt lending to China. These official actions were supplemented by the unofficial and spontaneous decisions of private individuals and institutions in Europe, Japan, and the United States to reconsider the desirability of conducting business with China.

The net impact of all these decisions on China’s foreign relations has been substantial. The level of official dialogue between China and the West has fallen sharply. Western nations have suspended military relations for the most part, although some low-level contacts involving the sharing of intelligence, discussion of strategic issues, and design of weapons systems appear to continue. There have been dramatic declines in revenues from tourism (down 20 percent in 1989), direct foreign investment (down 22 percent in the first half of 1990), and foreign lending (down 40 percent in 1989), although Beijing has been able to protect its foreign exchange balances by imposing strict controls over imports.

It is clear, then, that China’s relations with much of the world were deeply affected by the Tiananmen Incidenct. But what about China’s own foreign policy? One might have expected changes in Chinese foreign policy after June 1989. Sanctions could have produced a harsh retaliatory response. The more conservative leadership that emerged from the crisis might have adopted a more rigid foreign policy than its predecessors. And the more skeptical approach toward economic and political reform that appeared after the Tiananmen Incident could have been accompanied by a less forthcoming attitude toward economic and cultural relations with the West.