Eight thousand feet in the air, illuminated by the searchlights and then disappearing into the darkness, the B14 Liberator and B29 Superfortress strategic bombers appeared over the city like a surrealist nightmare. “Sinister black, enormous moths,” the poet Albert Giraud had written, “With heavy wings fall invisibly the monstrosities, upon human hearts.” Fifty thousand people were displaced by the bombing of Shanghai on 6 February 1950. Homes and infrastructure were levelled, and a thousand people were killed or injured.
The key target of the American-made bombers was the American-owned and American-operated Shanghai Power Company. It was a multinational of critical importance and powered the new, revolutionary People’s Republic of China. Even as the United States protested Taiwan’s air raids in public, the government of President Harry Truman knew they were critical to its policy of containing Communism.
Declassified documents show that the Central Intelligence Agency (CIA) reported to Washington a large number of ships being fitted at Shanghai’s dockyards. This, the documents said, was in preparation for an invasion of Taiwan. Even after the bombing of the Kiangnan docks by the American-made bombers, armies of workers continued to repair damaged junks.
This week, the People’s Liberation Army combat jets and ships have launched around-the-clock exercises intended to intimidate Taiwan’s new, pro-independence President Lai Ching-te. To many experts, it seems an eventual invasion of Taiwan is inevitable. Like in 1950, debates are raging on whether to deter China by containment, as President Truman insisted, or through engagement, as the magnates running Shanghai Power argued.
The long-forgotten story of the Shanghai Power Company and the bombers sent to destroy it offers important lessons. It tells us about the missteps and misjudgements that could push two superpowers to war and devastate the world.
A company dilemma
Ever since November 1948, when the PLA broke out of northern China and began pushing down the lower Yangtze valley, Paul Hopkins had been carefully considering the options. The President of Shanghai Power had, early on, told his headquarters in the US that it should continue operations only as long as the Kuomintang held the city. That month, though, the US embassy had issued an advisory telling non-essential personnel to leave Shanghai, making clear the government’s collapse was nearing.
For diplomats, though, the prospect of Shanghai Power shutting down was not a welcome one, historian Warren Tozer has recorded. The US consul in Shanghai, John Cabot, told Hopkins that the communists would also need electricity. The company’s influence, he argued, might enable it “to lead, guide, or otherwise induce the reds to revise their philosophy of life.”
Warren Kopelman, Hopkins’ boss in Boise, also told him American authorities in Washington were keen for the company to stay on. The government, Kopelman said, “emphasised the desirability of continuing operations regardless of who [was] in power in China.” “They indicated that they would be very disappointed if the property got out of American hands.”
The idea that continued operations by Shanghai Power would be welcomed by the communists was commonsensical. The company generated about 87 per cent of the city’s power according to Tozer, and continued operations were necessary to power its life. There were, however, serious problems: Who would guarantee continued fuel supplies to the plant? And how would the power be paid for?
Even though Washington ensured Shanghai Power continued operations, it also mounted pressure on China. The retreating Kuomintang began a blockade of Shanghai port, cutting off fuel supplies with the assent of the US. This forced Shanghai Power to switch to coal, brought in by train despite air strikes carried out by the Kuomintang. The People’s Republic also raised power tariffs, Tozer records, and provided loans to enable Shanghai Power to keep operating.
The historian John Service has argued that Chairman Mao Zedong’s China was, contrary to popular opinion, keen to maintain an open door to the US—in other words, to maintain at least a trade relationship, in the face of ideological problems, and the reality of American support for the Kuomintang. The government’s support for Shanghai Power suggests this was indeed the case.
However, the subsequent events ensured we can only speculate on what happened.
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The march to war
Following the liberation of Taiwan from Imperial Japan, the Kuomintang established an iron hold on the island. The unpopularity of the Kuomintang’s rule, scholar John Huebner writes, soon sparked off riots, and thousands were killed in the murderous military action that followed. The US, though, had no choice but to back the Kuomintang. Taiwan, after all, was critical in maintaining a naval line of defence against the Soviet Union, running from Japan through the Philippines and Indonesia.
Truman—inspired by Cold War diplomats and ideologues Dean Acheson and George Kennan—conceded China to the Soviet Union, but hoped to minimise its utility as an industrial powerhouse or resource base, historian Warren Cohen notes. The US commercial traffic was caught up in the Kuomintang’s blockade, and air strikes on Shanghai Power’s facilities began in January 1950. Washington thus, chose to pay this price.
Few in the state department seemed to have been entirely persuaded by the containment policy. The Director of the Office of Chinese Affairs, Philip Sprouse, wrote a secret memorandum noting that “the bombings are fast producing what the Consulate General describes as a state approaching chaos with attendant danger to American residents of Shanghai.”
To Sprouse, it seemed “incredible that we permit the [Kuomintang] Chinese Government brazenly to do the damage to our position in [the People’s Republic of] China that it is doing.”
For its part, Huebner wrote, the PLA continued to push on through 1949, with the Third Field Army taking the Kuomintang naval base at Fuzhou in August. Early in October 1949, three PLA divisions assaulted Kuomintang positions on the island of Xiamen, part of Taiwan’s outer defences. The assault, however, ended in disaster, with the PLA proving unable to mount an amphibious operation.
In Shanghai, Hopkins had developed a growing respect for the new government. The communists, he wrote, were “a new type of people who, if not subject to outside pressure, will ultimately bring great progress to China.” For its part, Shanghai Power, “earned and won the confidence of the authorities as an efficient and honestly administered utility and one of the essential cogs in [Shanghai’s] industrial development.”
The deteriorating relationship between Beijing and Washington, brought about by the support for the Kuomintang, was however bound to tell. In September 1950, Shanghai Power handed over management to local employees, and quietly left China.
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A time of hard choices
Following the outbreak of the Korean War in the summer of 1950, commentator Hsu Chung-mao writes, the PLA dropped its plans to attack Fujian—plans which, according to most American diplomats, would end in defeat for the Kuomintang. The conflict, however, simmered on. In August 1954, the PLA again raided Taiwan’s offshore islands, beginning with the shelling of Kinmen and Matsu, and an assault on the Dachens. That November, the PLA encircled Yijiangshan, a base on the northern flank of the Dachens, and occupied the islands.
The US responded by sending in seven aircraft carriers at the head of a fleet that evacuated some 15,000 civilians and 11,000 Taiwan troops. In December 1954, President Dwight Eisenhower’s government signed a formal mutual defence treaty with Taiwan, which was enforced in March of the next year. Although the Dachen islands were successfully captured by the PLA—and remain in the control of China even today—it moved no further.
In August 1958, the PLA again tested American resolve, shelling the islands of Kinmen and Matsu, and initiating an amphibious landing on Tung Ting. This time, the US sent in a fleet with four aircraft carriers, equipped with low-yield atomic weapons to annihilate the PLA’s numerically superior landing forces.
Ever since Xi reinitiated an aggressive Taiwan policy, debates on the arguments over engagement and deterrence, which raged in the 1950s, acquired renewed significance. Trade and technology sanctions have deepened, together with direct military competition. The eminent scholar John Mearsheimer, among others, has argued that the rise of China—enabled by America itself—made this confrontation inevitable. The only way for the US to prevail, he argued, is to relentlessly expand the power-gap, to the point where China realises it has no chance of success.
This might well be true, but the case of Shanghai Power shows the importance of nuance. Keeping the corporation running, enabling fuel supplies, and bringing other economic incentives to the table might well have provided tools to temper the PLA’s push on Taiwan. Ending economic engagement in 1949 did not ensure the security of Taiwan.
Even a limited war over Taiwan, economists have estimated, would cost the world upwards of $10 trillion, or 10 per cent of global GDP—devastating livelihoods across the world. That cost, in itself, is an excellent reason for adversaries to pull back from the brink. Engagement might not be a substitute for raw deterrence. Ensuring the economies of China and the world remain entwined, though, might yet prove a powerful force for peace.
Praveen Swami is contributing editor at ThePrint. Views are personal.
(Edited by Zoya Bhatti)