This article explores the ambiguous role of coastal smuggling during the first decade and a half of Communist rule (1949-65). Fearing that the illicit flow of commodities siphoned critical revenues and undermined foreign policy, Communist China repurposed and expanded Nationalist China's war on smuggling while employing novel tactics of mobilization. Yet smuggling was not just a threat; it was also a lifeline that alleviated widespread material shortages and supplied the everyday needs of individuals and firms during the tumultuous transition to central planning. Businesses from 'underground factories' to state-owned enterprises relied on black markets to meet ambitious production targets and circumvent bottlenecks in official supply channels. Smuggling was thus more than just 'corruption' practised by officials - it was also a 'creative accommodation' employed by broad swaths of social actors coping with the enormous changes. This article argues that the nascent command economy and the vibrant underground economy existed symbiotically rather than antagonistically. Exploration into this complex relationship reveals many cross-border connections between Communist China and the capitalist world that both complemented and undermined domestic state consolidation. © Copyright 2017 Cambridge University Press.

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China trade flow black market production system export smuggling corruption historical perspective