On May 16th, 1956, the newly constituted Republic of Egypt under the rule of Gamal Abdel Nasser recognized the communist People’s Republic of China.
Egypt had broken from British rule in 1952 with the Free Officers Movement and their coup which ended the Egyptian monarchy. The influence of the military, and particularly Nasser, shifted to more involvement in the political. Nasser and the other officers ruled through a Revolutionary Command Council and, over the next few years, eliminated political opposition. Nasser became chairman of he Revolutionary Command Council and by 1954 was largely himself ruled Egypt.
In the run up to the 1952 coup, Nasser had cultivated contacts with the CIA. His purpose was to provide a counter balance to the British, should they attempt to oppose the Free Officers in their takeover. The U.S. came to see Nasser as an improvement over the deposed King Farouk and looked to his support in the fight against communism. Nasser himself promoted pan-Arab nationalism which concerned itself largely with the perceived threat from the newly-formed State of Israel. Nasser also became a leader of the newly-independent third world countries, helping create the policy of “neutralism,” having the rising powers of the third world remain unaligned in the Cold War.
It was within this context that the recognition of China appeared to be so provocative.
Egypt had begun drifting towards the communist camp due to a frustration with terms of arms sales and military support from the Western powers. A major weapons deal with the USSR to purchase Czechoslovakian weapons in 1955 greatly enhanced Egypt’s profile in the region, and put them on an even military setting with Israel.
When Nasser recognized China, the response from the U.S. was a counter punch; withdrawing financial support for the Aswan Dam project, itself conceived as a mechanism for securing Egypt’s support on the anti-communist side of the Cold War. U.S. officials considered it a win-win. Either they would bend Nasser to their will, and achieve better compliance in the future, or he would be forced to go to the Soviets to complete the Aswan Dam. They figured that such a project was beyond the financial capabilities of the Russians, and the strain would hamper the Soviet economic and military capabilities enough to more than make up for the deteriorated relations with Egypt. In that event, the ultimate failure of the project would likely realign Egypt with the U.S. anyway.
Egypt’s response continued to surprise. Despite having negotiated that the UK turn over control of the Suez Canal to Egypt, on July 26th, 1956, Nasser announced the nationalization of the Suez Canal and used the military to expel the British and seize control over its operation.