Sharing an affection for Stevie Wonder, David Bowie, and Brian Eno, Daly and Lundon had become burned out from playing with various Knowsley post-punk groups. Daly quit school and then spent much of his time indoors tinkering with synthesizers and a drum machine. Along with Lundon, Daly began writing songs using his high-tech toys. Feeling creatively stifled by the drum machine, the pair eventually asked percussionist Dave Reilly to join them, and in 1982 they released the single African & White as China Crisis on the independent label Inevitable. Later re-released by Virgin Records, African & White was also China Crisis' first hit in the U.K..

Throughout their career, China Crisis has seen moderate success in the United Kingdom, western Europe, Australia and the Americas. Adding Gary "Gazza" Johnson and Kevin Wilkinson to the line-up, they recorded their debut album Difficult Shapes & Passive Rhythms in 1982. Another single, Christian, made UK #12, followed by two singles from second album in 1983, Working With Fire & Steel : Possible Pop Songs - Volume 2, regarded as a more consistent effort, standout tracks being 'Wishful Thinking', 'When The Piper Calls', 'Animals In Jungles' plus the title track.

China Crisis spent 1984-1985 making their biggest chart run, beginning with their first (and last) Top 10 hit single, Wishful Thinking. Their third album Flaunt The Imperfection was produced by the sympathetic Walter Becker (of Steely Dan fame) which resulted in the Top 20 hit singles Black Man Ray and King In A Catholic Style (Wake Up). The album was followed-up in 1986 with the lower-key What Price Paradise, the key tracks being 'Arizona Sky', 'June Bride', 'The Understudy' and 'A Day's Work For the Dayo's Done'. The band worked with Becker once more on 1989's Diary Of A Hollow Horse, which earned critical acclaim though little commercial success and spawned the singles 'St Saviour Square' and 'Red Letter Day'.

Sometimes misunderstood by critics (and with Daly's vocals not to everyone's taste), China Crisis distinguished themselves from their Liverpudlian contempories such as Orchestral Manoeuvres In The Dark, The Teardrop Explodes, and Echo & The Bunnymen by digesting a cornucopia of musical genres, everything from jazz to progressive rock. Despite the stylistic deviations, China Crisis maintained their distinctive sound through a number of albums in the 1980s and '1990s.

Tragically, Wilkinson hanged himself on 17th July 1999. In 2000 Daly contributed a track to a tribute compilation to Wilkinson, Green Indians. The band accumulated a body of work consisting of six studio albums (including one covers album) and two live albums between 1982 and 1995. Since 1992 there have been three compilations albums of their work.

China Crisis will be touring the UK during January and February 2007 as part of their 25th Anniversay.