Changes in the trading ties between China and Malaya, prewar to postwar,
Nie Dening, a scholar at Xiamen University, published this article in 1999 examining the evolution of bilateral trade between China and Malaya from the opening of the Suez Canal in 1869 through the establishment of diplomatic relations in 1974. The central argument is that the Overseas Chinese community in British Malaya served as the primary engine of prewar trade, while postwar trade was shaped by geopolitical pressures—US embargoes, the Malayan Emergency, and the Cold War—before direct state-to-state relations from 1971 onward transformed the relationship into a more balanced commercial partnership.
Summary
Dening frames the study around the period 1869–1974, a span bounded by the Suez Canal’s opening (which ended the junk era) and the early 1970s (when trading relations became largely official). The prewar narrative traces how Singapore’s emergence as a transit hub and the British colonial development of tin and rubber industries created a structural demand for Chinese manufactured goods and foodstuffs. The trade was asymmetric in character: China exported textiles, dried vegetables, peanut oil, tea, and medicinal products to a Chinese population exceeding 1.7 million by 1931, while importing rubber, tin, copra, and gasoline. China held a persistent trade surplus, but this was offset by massive Overseas Chinese remittances flowing back to the mainland, which constituted an invisible import surplus for Malaya (pp. 95–97, 100–104).
The postwar section examines how the Japanese occupation severed trade, followed by a rapid recovery in 1946–50. The US-imposed rubber embargo of 1951–56 and the Malayan anti-dumping measures of 1958 forced trade into indirect channels through Hong Kong and Singapore, where the Bank of China’s branches and Chinese trading firms acted as intermediaries. The turning point came in 1971, when Malaysia’s new non-aligned foreign policy under Tun Abdul Razak and China’s admission to the United Nations created the political conditions for direct trade delegations, trade agreements on rubber and rice, and ultimately diplomatic relations in 1974 (pp. 98–100, 108–112).
A distinctive thread running through the article is the role of institutional actors: the Singapore Chinese Chamber of Commerce and Industry (founded 1906), the Bank of China’s Singapore branch (opened 1936 with 25 million Straits dollars in paid-up capital), and the various Chinese Chambers of Commerce in Malaya. These bodies facilitated remittances, provided documentary credit for trade settlement, and lobbied both governments to reduce barriers to Chinese goods (pp. 107–111).
Key Findings
- Total trade between China and British Malaya grew more than forty-fivefold between 1868 and 1926, from 923,000 HK taels to 41.4 million HK taels, before declining during the 1929–33 depression (p. 96).
- The US-imposed rubber embargo on China lasted from May 1951 to June 1956; upon its lifting, China imported 313,000 tons of Malayan rubber in 1957 alone, and by the end of the 1950s China ranked sixth among purchasers of Malayan rubber (pp. 99, 104).
- In 1971, China agreed to purchase the entire rubber stock of the Rubber Fund Board plus 150,000 tons per year at world market prices, along with 5,000 tons of palm oil and 50,000 cubic metres of timber (p. 105).
- Overseas Chinese remittances from Singapore and Malaya reached an estimated 67.5 million dollars by the end of the 1930s (approximately 100 million yuan annually), constituting around 10 per cent of China’s total international revenue at that time (p. 110).
- The Bank of China’s Singapore Branch opened on 1 July 1936 with a paid-up capital of 25 million Straits dollars; its Nanyang surplus reached 14.45 million yuan in 1937. The Kuala Lumpur and Penang agencies were forced to close in 1959 under the Federal Bank Bill amendment of 4 December 1958 (pp. 110–111).
- Bilateral trade reached US$424.4 million in 1980, with imports surpassing exports for the first time in 1977, 1979, and 1980, marking a reversal of the prewar pattern in which China held a consistent export surplus (p. 100).
Conclusion
Dening’s definitive takeaway is that the prewar trade relationship was fundamentally a product of the Overseas Chinese diaspora and its remittance flows, which simultaneously sustained Chinese exports to Malaya and compensated for China’s trade surplus through invisible balances. Postwar, the relationship was restructured by state politics: the embargo era and the Malayan Emergency created a long period of indirect, middleman-mediated trade, while the political realignments of 1971–74 enabled a transition to direct, state-to-state commerce that ultimately produced a more equitable balance of trade.
Context
- The article draws primarily on Chinese Imperial Maritime Customs statistics, the Corpus of Statistical Data on China’s Foreign Trade, 1950–1989 (Ministry of Foreign Economics and Trade, 1990), and contemporary Chinese-language press sources (Sin Chew Jit Poh, People’s Daily, Peking Review), supplemented by British colonial census and trade commission reports.
- The study contributes to the historiography of Sino-Malayan economic relations by integrating the remittance and banking dimensions (Bank of China, Overseas-Chinese Banking Corporation) into the trade narrative, an angle less frequently addressed in English-language scholarship on the period.