CHAPTER FIVE

The Demise of the Kuomintang and the Triumph of Chinese Communism

Civil war in China

Developments in China in the second half of the 1940s were of crucial importance for the sequence of events in 1950, culminating in the Chinese intervention in Korea in October—November 1950. The traditional American attitude towards China had been one of sympathy for the sufferings and aspirations of the Chinese people but without any profound understanding of the forces at work in China.¹ The Kuomintang, under the leadership of Generalissimo Chiang Kai-shek, was regarded favourably by politicians and the general public. Chiang had emerged as the dominating personality but not dictator within the Kuomintang in 1927 and had symbolised resistance to Japanese aggression during the Sino-Japanese War of 1937—45. Within the United States government disillusionment with China developed from the middle period of the Pacific War, stimulated by the negative contribution made by China to the defeat of Japan. It had been hoped originally in Washington that China would play a vigorous part in undermining Japan with coastal territory recaptured from the Japanese being used to facilitate bombing of the home islands of Japan. As Generaljoseph W. Stilwell discovered, the enthusiasm for fighting the Japanese in the temporary wartime capital of Chungking was extremely limited.² The top Kuomintang officials and generals were primarily interested in exploiting large-scale American aid for their own benefit; corruption was rife and extended to a high level, although Chiang himself was apparently not corrupt. However, Chiang was preoccupied with his long-term feud with the Chinese communists, notwithstanding the supposed 'United Front' against the Japanese, formed in 1937. Chiang's policy during the Pacific War was to obtain as much aid as possible from the Americans and to husband his resources for the eventual decisive struggle with the communists when Japan had been defeated. President Roosevelt wearied of Chiang and might have adopted a tougher line towards him in 1944 but for domestic political complications, linked with Republican sympathy for China and the imminence of the presidential election.

1. For a concise general survey of Sino-American relations in the twentieth century, see Michael Schaller, The United States and China in the Twentieth Century (New York, 1979). For a valuable collection pursuing issues examined in this chapter, see Dorothy Borg and Waldo Heinrichs (eds), Uncertain Years: Chinese-American Relations, 1947-1950 (Guildford, 1980).

2. For Stilwell's graphic portrait of the difficulties encountered in grappling with the Kuomintang, see Theodore White (ed.), The Stilwell Papers (New York, 1948). See also Barbara Tuchman, Stilwell and the American Experience in China, 1911—45 (London, 1970).

The Kuomintang gradually declined, having forfeited the revolutionary zeal of the 1920s. Numerically the Kuomintang forces were markedly superior to the communists but in morale, commitment and leadership the communists were far ahead of the Kuomintang, as the civil war was to reveal. The communists, under the astute, forceful leadership of Mao Tse-tung, had recovered from the setbacks experienced in the first two decades of the party's existence.³ Mao transformed the CCP into a formidable, tenacious foe, imbued with fervent nationalism and a deep faith in the Chinese masses. The small number of American officials who met the communist leaders and visited Yenan, the CCP's capital in remote Shensi province, were impressed by the spirit of dedication and mission, together with the absence of the corruption that was the hallmark of the Kuomintang.

3. See S. R. Schram, Mao Zedong: A Preliminary Reassessment (Hong Kong, 1983) for a valuable analysis of Mao's impact upon the GGP. For the importance of the Yenan era, see Mark Selden, The Yenan Way in Revolutionary China (Cambridge, Mass., 1971).

After the Japanese surrender in August 1945, the United States hoped for a new approach from the Kuomintang, including the CCP participating in the Chinese government. While suspicion of the communists existed, it was felt that the CCP was different from the Russian variety of communism and that Chinese communism would be less dangerous, provided that the Kuomintang possessed the upper hand in their cooperation. General George Marshall devoted much time, between December 1945 and January 1947, to a futile attempt to bring the two sides together. The failure of his mission led Marshall and most officials in the State Department to lose interest in China and to feel that little could be accomplished beyond giving economic assistance to China within certain limits. American policy rested on 'letting the dust settle' and seeing what emerged from the civil war between 1947 and 1949.⁴ The Truman administration was principally interested in Europe, where the constructive aspects of American policy were advanced by Truman, Marshall and Dean Acheson. Great Britain wished to resume her prewar role in the former treaty ports, particularly in Shanghai, and to recapture some of the old pre-eminence in the China trade. There was little faith in the prospects of the Kuomintang but equally little anticipation that Chiang Kai-shek's power would decline at such a catastrophic pace in 1949. British officials were conscious of the diminished British standing in China and that the United States would determine - or not, as the case might be — the western response to the evolution of China. The nature of American policy in China was viewed with accelerating cynicism by the Foreign Office and the diplomats in Nanking.

4. The nature of American policy in China is assessed cogently in N. B. Tucker, Patterns in the Dust: Chinese-American Relations and the Recognition Controversy, 1949—1950 (New York, 1983).

The Soviet Union followed a cautious approach between 1945 and 1949 and one less sympathetic to Chinese communism than might have been expected. The evidence indicates that the Kremlin had considerable doubt about the character of the CCP and the prospects for the CCP taking power throughout China. Russia had signed a treaty of friendship with the Kuomintang government in 1945 and Chiang Kai-shek sometimes supported the Soviet Union over wider questions, such as the conclusion of a Japanese peace treaty in 1947. Stalin had followed a mistaken and ultimately disastrous policy in China in the 1920s and was well aware of the independent spirit within the CCP encouraged by Mao. In August 1945 Stalin advocated firmly that Mao should visit Chungking (the wartime Kuomintang capital) and negotiate with Chiang Kai-shek so as to obviate a renewal of the civil war. Mao reacted with ire.⁵ It would not be in the Soviet Union's interest to have a strong China, albeit a communist one; historical, geographical and cultural reasons would render it difficult or impossible for the Soviets to dictate to Mao. Stalin appears to have anticipated a slow decline of the Kuomintang balanced by a gradual growth of the CCP; this would point towards a division of China, perhaps with the regions north of the Yangtze dominated by the CCP and those south by the Kuomintang. This explains the preservation of diplomatic relations with the Kuomintang until a surprisingly late stage, with the Soviet ambassador retreating with the Kuomintang bureaucracy from Nanking to Canton in April 1949, by which time it was obvious that the CCP would succeed on the mainland within the near future. The Soviet Union had assisted the communists to gain control of Manchuria but this could be explained on the grounds that Russia possessed the ports in the Liaotung peninsula as a result of the Yalta agreement of 1945: subsequent events indicate that the Russians hoped to persuade the local CCP officials to collaborate with them.

5. S. N. Goncharov, J. W. Lewis and Xue Litai, Uncertain Partners: Stalin, Mao and the Korean War (Stanford, Calif., 1994), p. 7.

In 1946-47 the Kuomintang had seemed to be reasonably well placed in the sense that military defeat did not appear to be imminent. The economic problems facing the Nanking government were rapidly worsening as the wartime inflation continued to gather momentum. In 1947-48 the situation changed drastically. Chiang Kai-shek erred in attempting to regain Manchuria for reasons of prestige. The morale of his forces was poor, officers were frequently corrupt, and ordinary soldiers were treated with sickening brutality.⁶ Reports from the American minister-counsellor in Nanking indicated that the position was discouraging, despite Chiang's sanguine statements. Members of the government realised how grave it was and this pessimism was communicating itself to the people - 'The Nanking regime continues to lose popular support. Both ordinary people and civil servants are inclined more and more to attribute the ills of the times to bad government and in the North the Communists, through offers of higher pay and better working conditions, are actually luring Government workers from their jobs.'⁷ Policy statements of the CCP include vehement criticism of the United States. Mao Tse-tung issued a personal statement on 25 December 1947 condemning American imperialism as a 'major enemy' of the Chinese people.⁸ John Leighton Stuart, the American ambassador in Nanking, observed that while attacks on the United States had grown recently, this was the first time that a prominent leader had expressed such views publicly.⁹ O. Edmund Clubb, the experienced consul-general in Peking, held that three possibilities faced the United States - continuing support for the Kuomintang, as constituted, a sympathetic attitude to the reform movements with the aim of changing the character of the Kuomintang and, as a parallel move, consulting the Soviet Union. Reform groups had become vociferous in 1947-48 but Clubb doubted whether liberalism could make progress as long as Chiang Kai-shek remained in power. Clubb remarked on the significance of developments in Korea:

6. For a penetrating discussion of the conflict between the Kuomintang and the CCP, see Suzanne Pepper, Civil War in China, 1945—49 (Berkeley and Los Angeles, 1978).

7. FRUS 1948 (7), p. 12, Clark to Butterworth, 7 Jan. 1948.

8. Ibid., p. 28, Stuart to Marshall, 9 Tan. 1948.

9. Ibid.

Reference to events in Korea would seem to indicate that possibly the Soviet political leaders are prepared to embark upon a more radical line of action in respect to China in the event that a compromise settlement in China, giving substantial authority to the Chinese Communists within clearly established limits, proves infeasible ...¹⁰

10. Ibid., p. 103, Clubb to Marshall, 19 Feb. 1948.

The Truman administration had moved away, however, from its earlier advocacy of a coalition government in China. Appreciable aid was given to Nanking but falling short of what the State Department deemed intervention in the Chinese civil war. General Marshall met the House of Representatives Foreign Affairs Committee in February 1948 to speak in support of continued aid. Alistair Cooke reported in the Manchester Guardian that Marshall had not raised China with any enthusiasm but was responding to pressure from certain prominent Republicans for greater assistance to Chiang Kai-shek. Cooke commented that isolationist Republicans were promoting the campaign 'It is not that they love China more but that they love Europe less.'¹¹ Governor Thomas E. Dewey of New York, campaigning actively for the Republican presidential nomination, had demonstrated vocal interest in China. Senator Arthur H. Vandenberg of Michigan, the architect of the bipartisan foreign policy embracing Europe, was critical of the administration over China.¹² When Marshall met the Flouse committee he radiated gloom on the prospects for the Kuomintang. In response to a question at a press conference on 19 March, Marshall stated that the United States still favoured communist participation in the government of China; the problem was that the communists were in a state of rebellion and the international scene had darkened since the communist coup in Czechoslovakia the previous month.¹³ Truman dissented and made it clear that he did not favour communist involvement in government anywhere.¹⁴ Much of the pressure for increased aid to China came from a small group of Congressmen headed by a former missionary, Walter Judd (Republican, Minnesota). There was no evidence that American public opinion felt strongly over China and the so-called 'China Lobby' did not possess the influence it was to exert after the start of the Korean War.

11 Manchester Guardian, 11 Feb. 1948.

12. See A. H. Vandenberg, Jr. (ed.), The Private Papers of Senator Vandenberg (London, 1953), pp. 335, 351, 450-2. In an election broadcast in October 1948 Vandenberg stated that there were areas in which the bipartisan policy did not obtain and gave as examples China, Palestine and Japan, ibid., pp. 450-2. The private papers of Walter Judd held in the Hoover Institution, Stanford University, reveal the extent of dissatisfaction with Truman's China policy in sections of the Republican Party.

13. Washington to FO, 27 Mar. 1948, F4635/190/10, FO 371/69585.

14. Washington to FO, 12 Mar. 1948, F4025/190/10, FO 371/69584.

In July 1948 Leighton Stuart reported deep alarm among military and political leaders over the future of the Kuomintang. General Li Tsung-jen, a prominent figure in the Kwangsi clique and a longstanding rival of Chiang Kai-shek, thought the government's position was hopeless and that existing civil unrest could soon affect the army.¹⁵ Criticism of the United States was being expressed for sustaining Chiang Kai-shek in office. A desire for peace at almost any price was developing rapidly, according to Stuart.¹⁶ Despite a brief interval of stability in August the Kuomintang encountered further military setbacks, including the fall of Tsinan. Unhappiness and frustration grew in Washington but it was unclear how the situation could be resolved. Marshall sent a statement of his views to Stuart in late October 1948. He emphasised that the chief consideration in policy formulation had been that the United States must not assume responsibility for maintaining the Kuomintang in military or economic terms. Armed intervention in China would be contrary to traditional United States policy. The China Aid programme was intended to provide breathing space to permit the Nanking government to reform itself and establish the basis for recovery. An attempt to eradicate communism in China would connote a vast commitment amounting to taking over the administration of China. In the light of recent events it was most unlikely that any American action could put the government on a solid foundation. The Truman administration would continue to support the Kuomintang as long as it remained a significant force. What would happen in the event of a collapse of the Nanking regime or of a section of the Kuomintang deciding to merge with the communists, as rumoured, would have to be determined at that point in time.¹⁷

15. FRUS 1948 (7), pp. 348-51, Stuart to Marshall, 12 July 1948.

16. Ibid., p. 388, Stuart to Marshall, 30 July 1948.

17. Ibid., pp. 512—17, Lovett to Stuart, 26 Oct. 1948, enclosing Marshall to Stuart.

Speculation grew at the end of 1948 and beginning of 1949 as to whether Chiang Kai-shek might stand down tactically or because the Generalissimo had wearied of the setbacks that had occurred. In an interview with the New York Tribune in October 1948 Chiang spoke of the world menace of communism and of the need to support Chinese resistance to communism. Chiang linked his message with communist activities in Korea and Japan:

Moreover I should like to point out that the Communist bandits with whom the government is engaged in fighting is [sic] linked up with Japanese and Korean communists who in turn receive support of the Communist International.

What is more obvious is that without an integral Northeast, there will be no independent Korea, nor will there be a peaceful East Asia.¹⁸

18. Dispatch, Stevenson to Bevin, 3 Nov. 1948, enclosing text ot press interview, New York Tribune, 31 Oct. 1948, F16032/33/10, FO 371/69542.

A feature of the decline of the Kuomintang was Chiang's interest in forging links with Syngman Rhee and his reference to Korea was one of the first signs of the trend. Chiang and the clique surrounding him had reached the conclusion that the only hope for the salvation of the Kuomintang lay in a third world war; this, too, was a consistent theme to the outbreak of the war in Korea and after. In January 1949 Chiang ostensibly retired and the Vice-President, Li Tsung-jen, became acting President. Chiang had not resigned and exercised effective power from behind the scenes. Li fruitiessly endeavoured to reshape the Kuomintang and entered into peace exchanges with the communists; the latter proved abortive, as the CCP had no intention of compromising, since the prospect of full power was looming. The continued slide downwards for the Kuomintang was alarming principally because of fears that the defeated regime might sanction attacks on foreigners and their property and in all follow a policy of negative destruction. Some attacks did take place, notably in Canton, and the Kuomintang generals ruthlessly extorted whatever they could out of Shanghai before leaving the city. On the whole, however, the retreat of the Kuomintang to Taiwan, while disorderly and humiliating, was not as difficult as had been anticipated.¹⁹

19. See Pepper, Civil War in China, pp. 7-195, for the closing stage of Kuomintang rule on the mainland. See also R. M. Blum, Drawing the Line: The Origin of the American Containment Policy in East Asia (London, 1982).

The CCP and the Soviet Union

Attention in Washington and London focused more intensively in 1948-49 on the character of Chinese communism and whether or how to come to terms with it. Mao Tse-tung produced an article entitled 'Revolutionary forces of the world rally to combat imperialist aggression' to commemorate the 31st anniversary of the October revolution. The theme was the close identification in common struggle of the Russian and Chinese peoples. The Russian Revolution had 'erected a bridge between the socialist West and the enslaved East' in the battle to defeat world imperialism.²⁰ Tribute was paid to the 'brilliant' leadership of Lenin and Stalin, and Mao went out of his way to denounce the possibility of a 'middle way' or 'third path' for those who disliked Marxism and the achievements of the Soviet Union.²¹ This could be taken as a repudiation of the small liberal centre groups in China, although Mao was prepared to cooperate with them on the basis of their being rendered powerless by the CCP, as later events demonstrated. The CCP was based on the model of the Soviet party and was moving along similar lines. Mao castigated the role of the United States in world affairs:

20. 'Revolutionary forces of the world rally to combat imperialist aggression', enclosed with FO minutes in F16917/33/10, FO 371/69544.

21. Ibid.

Instead of Fascist Germany, Italy and Japan, it is now American imperialism and its servants in the various countries, who are feverishly preparing a new world war and who are menacing the whole world. This is a reflection of the extreme decay that has set in throughout the capitalist world, its fear of impending doom. Imperialism, however, the enemy of the working peoples of all countries, is still strong. That is why the revolutionary forces in every country must be united and consolidated, why they must daily strengthen the united anti-imperialist front headed by the Soviet Union, why they must pursue a correct internationalist policy, for otherwise they can never be victorious.

The great people's democratic revolution in China which is being carried out under the leadership of the Chinese Communist Party is an integral part of the international anti-imperialist camp. The working people of China have won great victories in their selfless struggle against the vicious aggression of American imperialism and against the reactionary Kuomintang Government which has betrayed the fatherland and the interests of the people.²²

22. Ibid.

Mao proudly recalled the series of defeats inflicted on the Kuomintang and the huge areas liberated by the CCP's forces. The tasks of the revolution were to complete the liquidation of the Kuomintang and to expel American imperialism totally. The article ended by affirming loyalty to the principles of Sun Yat-sen, identified the CCP once more with communist parties elsewhere in the world, and asserted the courage of the Chinese masses. Mao's sentiments gave additional evidence to those who argued that the CCP was working closely with Moscow. It had to be borne in mind that a statement celebrating the Bolshevik revolution was bound to include sentiments of this character and that Mao was irate at continued American help for Chiang Kai-shek.

Goncharov, Lewis and Xue argue that by the first few months of 1948 Stalin realised that China would become his partner rather than his pawn. The worsening of the Cold War accentuated Stalin's anxiety: in the autumn (fall) of 1948 he was afraid that Governor Dewey, the Republican candidate, would win the election for the presidency of the United States and that Dewey might favour American military action in China to help the beleaguered Kuomintang.²³ Thus China assumed greater significance in Stalin's global policy: from the latter part of 1948, Stalin exercised direct supervision of all issues relating to China.²⁴ He sent Mikoyan to see Mao in January 1949. Stalin held that Mao placed excessive emphasis on peasants at the expense of the industrial proletariat. Mao observed, pointedly, to Mikoyan that China wanted genuine friends rather than those pretending to be friends.²⁵ Stalin encouraged the ambition of Kao Kang, the CCP's boss in Manchuria. Kao disliked Mao and told Stalin's agent, Kovalov, that Mao and his followers were right-Trotskyite and anti-Soviet.²⁶ General Marshall explained his views at a meeting of the United Nations General Assembly held in Paris in November 1948. Marshall said that in its desperation the Nanking government was requesting an increase in military supplies, the appointment of a leading American general as a military adviser, and that members of the existing American military mission should be distributed among Chinese divisions. Marshall stressed that there was no intention of meeting the demands. The quantities of supplies wanted by the Kuomintang were excessive and amounted to a 'major operation'. It would not be feasible to provide a senior military adviser; the military situation was too complicated and intelligence showed that the communists would pursue their advance southwards. Marshall did not mention that Chiang Kai-shek would have welcomed the appointment of General MacArthur and that MacArthur was apparently willing to entertain such a proposal, provided that it was additional to his existing responsibilities in Japan and not a substitute for them.²⁷ Marshall added that American policy would support Chiang 'for as long as he was supportable'.²⁸ It was clear that the Truman administration were 'at their wits' end for any palliative even for the present situation'.²⁹ The incompetence of the Kuomintang army was such that it appeared impossible of solution. Furthermore the administration had given priority to Europe and greater involvement in China would mean a reduction in American efforts to assist WEU or the Atlantic pact. The Soviet Union would desire just such a development and the United States would not be drawn into the trap. Marshall went on to consider the Chinese communists. While they were undoubtedly Marxist-Leninist, they were different from other communists. Marshall therefore believed there was some prospect of preventing the relationship between the Chinese communists and the Soviet Union becoming too close.³⁰ Marshall's remarks were in harmony with a report earlier in 1948 from the NSC and a report in September 1948 from the Policy Planning Staff, headed by George Kennan.³¹

23. Goncharov, Lewis and Xue, Uncertain Partners, p. 25.

24. Ibid., p. 32.

25. Ibid., p. 41.

26. Ibid., p. 68, note.

27. For MacArthur's advocacy of funds and military assistance to the Kuomintang government, see Tucker, Patterns in the Dust, pp. 182, 185, 187, and W. W. Stueck Jr., New Road to Confrontation (Chapel Hill, NC, 1981), pp. 39-40.

28. UN General Assembly, Paris (UK delegation) to FO, 20 Nov. 1948, F16331/190/10, FO 371/69586.

29. Ibid.

30. Ibid.

31. See draft NSC assessment on United States aims in China, 24 Mar. 1948, NSC 6, FRUS 1948 (8), pp. 44-5, and ibid., memorandum by Policy Planning Staff, 7 Sept 1948.

Recognition of the PRC

Britain quickly appreciated the complexities associated with recognition of a Chinese communist government and was anxious to begin consultation with the United States. While it was appreciated that it would prove contentious, it could not have been forecast that the subject would be so peculiarly difficult, that it would be the most dangerous example of Anglo-American divergence to have arisen so far, and that it would take more than twenty years for the United States to take the first significant steps towards recognition. The establishment of the new government was proclaimed formally by Mao in Peking on 1 October 1949.³² The British attitude to recognition was essentially straightforward and devoid of ideological bias. A government should be recognised officially when it was clearly in effective possession of most or all of the territory of the state and when it appeared reasonably certain that the new regime would fulfil treaty commitments. In contrast the approach of the United States was more complex. Recognition was not simply a fulfilment of the criteria employed by Britain but amounted to approval of the character of the new government. This would necessarily incorporate unqualified acceptance of international obligations and fair treatment of United States nationals in China. In the course of the communist advance friction has been occasioned in places by clashes between American officials and communist authorities. The clashes, for which the Americans were partly responsible, overshadowed the arguments over recognition. The most serious obstacle was engendered by the impact of the Cold War. George Kennan had originally intended his concept of containment to be used in specific contexts and not in a universalistic way. An element of carelessness in the drafting of his proposals together with the simplistic approach shown by members of the Truman administration and others led to the phobia over communism that came to dominate American perspectives from the late 1940s to the 1970s, if not beyond.³³ A growing number of Americans began to lament the loss of China, happening before their eyes. In contrast to Europe, where an imaginative and constructive policy was adopted, the administration was floundering in China without a policy or at any rate one that had registered a degree of success. China had already been seized on by the Republican Party as a stick with which to beat the administration. The unexpected defeat of Dewey in the 1948 election exacerbated tensions for a party that had been out of office for a lengthy period and which contained much internal conflict within its own ranks. It would be necesssary to tread warily to ensure a consensus before proceeding.

32. For a lucid account of the British perspective, see Ritchie Ovendale, 'Britain, the United States, and the recognition of Communist China', Historical Journal, 26 (Mar. 1983), pp. 139-58.

33. See G. F. Kennan, Memoirs, 1925-1950 (London, 1968), pp. 250-1, 294, 319-20, 322, 358-9.

In January 1949 Dean Acheson became Secretary of State. On policy matters there was no disagreement between Acheson and his predecessor, Marshall: the United States must play a dynamic role in the world, the priority was Europe, and little could be done about China. The difference was that Marshall was widely respected for his honesty, integrity and forthrightness, cultivated during a lifetime's service to the United States army. Acheson was also a man of integrity and vigour but was a controversial figure. His manner and bearing personified the eastern establishment liberal and grated on various people in Congress. Acheson's response could be arrogant at times and he never suffered fools gladly. Senator Vandenberg, a shrewd judge of congressional reactions, respected Acheson but did not regard Truman's choice as a wise one; Vandenberg commented in his diary that had Truman consulted him on the appointment he would have recommended against it.³⁴ Acheson experienced a tempestuous term of office in the State Department but arguably was the most capable Secretary of State in the twentieth century. President Truman trusted him implicitly and usually supported him unequivocally; their relationship was probably the most congenial between a President and a Secretary of State in recent times.³⁵

34. Vandenberg (ed.), Private Papers, p. 469.

35. For Truman's view, see H. S. Truman, Memoirs: Years of Trial and Hope, 1946-1952, paperback edn (New York, 1965), pp. 485-9. For Acheson's views, see Dean Acheson, Present at the Creation: My Years in the State Department (London, 1970), p. 366.

In January 1949 British representatives raised recognition at a meeting in Washington with Philip Sprouse, head of the China division, Sprouse stated that meticulous consideration had to be given to the topic and stressed that it would be controversial. The hope was expressed that Britain would not extend de jure recognition without consultation. In response it was indicated that the Foreign Office viewed recognition as a bargaining counter to protect British economic interest.³⁶ Sporadic attention was devoted to recognition in the following months but it was not feasible to advance further until the communists had absorbed additional territory. On 18 March the Foreign Office regarded the frontiers of communist territory as fluid and believed that a situation analogous to that in the Spanish Civil War (1936-39) might arise. The range of issues required careful consideration and Britain would not rush into recognition.³⁷

36. Letter from Graves to Scarlett, 5 Jan. 1949, F415/1023/10, FO 371/75810.

37. FO to Washington, 18 Mar. 1949, F3505/1023/10, ibid.

Meanwhile the NSC reviewed American policy and recommended that freedom of action be preserved by following an approach calculated to accentuate tendencies towards a rift in Sino-Soviet relations. Such a policy would allow, with adequate safeguards, restoration of ordinary economic relations between China on the one hand and Japan and the western powers on the other. Trade between Japan and China should be encouraged on a quid pro quo basis. Full controls over trade with China should be implemented by the United States government.³⁸ This paper pointed cautiously to an attempt to work with the Chinese communists. The American consul-general in Peking commented on the communists' desire to increase trade with Japan: they wished to export salt, coal, soya beans, particularly coal. Clubb, the consul-general, proposed that they reply sympathetically but also underlined that trade could not be developed until the communists gave United States consular establishments the usual facilities. On the overt political side Clubb expected the communist campaign against American imperialism to continue for some time but the CCP's line might be reconsidered. He fully supported an attempt to insert a wedge in relations between the Chinese and Moscow.³⁹ The consul-general in Tientsin, Smyth, believed that a softer approach towards foreigners was slowly occurring but this could be explained through a wish to allay apprehension before the communists entered Shanghai; it could also be part of a strategy to secure western recognition of the new government.⁴⁰ MacArthur concurred in the State Department's view on fostering trade with north China; he did not intend to take an initiative himself over trade but would leave commercial transactions to the consul-general to pursue.⁴¹ The State Department did not want matters to proceed too rapidly and were conscious of the importance of not extending formal recognition to communist representatives going to Japan to discuss trade. Accordingly MacArthur was informed that it was doubtful whether he should receive representatives; a reply was sent to Washington on 6 July 1949 that SCAP did not think it appropriate at the present time to allow into Japan a trade mission accompanied by representatives of the communist regime.⁴²

38. FRUS 1949 (9), pp. 826-34, NSC report, NSC 41, 28 Feb. 1949.

39. Ibid., pp. 974—6, Clubb to Acheson, 30 Apr. 1949.

40. Ibid., pp. 982-3, Smyth to Acheson, 11 May 1949.

41. Ibid., pp. 985-6, Webb to Clubb, 27 May 1949.

42. Ibid., pp. 990-1, Webb to Clubb, 21 June 1949, with a footnote on pp. 990-1 summarising a report from the counsellor of mission in Japan (Huston) dated 6 July.

The head of the ECA mission to China, Roger D. Lapham, fully supported efforts to put relations with the communists on a more secure footing. Lapham was a Republican and former mayor of San Francisco; he had been in China since June 1948 for the purpose of supervising economic assistance to China. Lapham believed that the Kuomintang regime was doomed and it would be futile to try and save it. Political objectives could be attained by economic means; commerce could lead to improved relations with the communists. He proposed that no restrictions be placed on American exports to China other than supplies of military goods, including strategic materials. He recalled that the aim of United States policy should be to prevent domination of China by a hostile government: the development of a 'satellite' relationship between the Soviet Union and China must be obviated. Lapham candidly remarked that the United States had supported the losing side with economic aid, arms and ammunition. Any thought of assisting the Kuomintang further in military terms or of giving help to any anti-communist groups that might appear should be resisted; instead American policy should be directed at assisting the peasant masses of China through the work of American advisers motivated solely by the wish to raise the standard of living.⁴³ The overall head of ECA was a prominent businessman and a Republican, Paul G. Hoffman, to whom Lapham's memorandum was addressed; Hoffman had made a statement in January, while visiting Shanghai, implying that American aid should be given to a communist government.⁴⁴ Lapham's term of office in China ended on 24 March 1949. In an interesting final report he discussed his work and the difficulties he had faced. Currency inflation was one of the worst features, which he illustrated by remarking that when the ECA mission first reached China, one US dollar could purchase 1.4 million Chinese dollars; some months later one US dollar could buy almost 12 million Chinese dollars. The Kuomintang's counter-offensive against inflation had proved a fiasco whereby ordinary Chinese were forced to surrender gold, silver or other valuables in return for a worthless new currency. He believed the mission had discharged its task effectively in the circumstances. His report ended with wise words:' One thing this year has taught me - you cannot afford to hold to fixed ideas. You must keep fluid, face things as they are and not as you would like to have them.'⁴⁵

43. Ibid., pp. 262-30, memorandum by Lapham, sent to Hoffman (ECA administrator), 9 Mar. 1949.

44. Ibid., p. 616, memorandum prepared in the Office of Far Eastern Affairs, 25 Jan. 1949.

45. Ibid., pp. 656-67, report from Lapham to Hoffman, 30 June 1949.

The consul-general in Shanghai, Cabot, took a similar view. It would be best to follow a united approach among the powers over recognition if possible but the British were anxious to advance more swiftly. A policy of using trade controls was unlikely to work because it would require unanimity among the powers and Britain would evidently not support utilising trade controls in exchange for recognition. The final phase of Kuomintang rule in Shanghai was appalling; it amounted to 'a gigantic and sickening racket to strip the town clean before they hand it over'.⁴⁶ He added that the Kuomintang were departing the mainland assured 'of unusual and permanent execration'.⁴⁷ Cabot had previously served in Yugoslavia and brought a fresh mind to bear on Chinese matters, reinforced by the knowledge of how Marshal Tito had broken with Moscow. At the end of May 1949 he produced a reflective survey of Chinese communism to provide a new perspective for Washington. Cabot talked of the vacillation in assessments of the CCP from, at an earlier stage, discounting the fact that the CCP was fully communist, at least in the European sense, to a tendency to categorise it as no different from the Kremlin. What was significant was not the respect in which Chinese communism resembled the Soviet variety but the divergences. Among the latter were that the Sino-Soviet treaty of 1945 was a snub to the CCP; the Soviet embassy was the only one to move from Nanking to Canton with the retreating Kuomintang; the fact that Vyshinsky had seen the Kuomintang ambassador in Moscow before the latter's departure to become Foreign Minister; that negotiations in Sinkiang had been with the Kuomintang, not the CCP; the relative failure of the Soviet Union to help the CCP, which could be compared with the Greek experience; the deportation of Anna Louise Strong; the apparent refusal to glorify the Chinese achievements at the 1 May parade in Moscow; and the closure of the Soviet consulates in Peking and Shanghai. From the Chinese side indicators included a growing respect for foreign private property and the infrequency with which Stalin's portrait was displayed. It was still too early to reach a conclusion on Soviet-Chinese relations but all relevant aspects had to be considered.⁴⁸

46. Ibid., p. 309, letter from Cabot to Butterworth, 11 May 1949. The private papers of Roger D. Lapham, held in the Hoover Institution, Stanford University, include some interesting items confirming his realistic approach to the evolving political situation in China.

47. Ibid., p. 310.

48. Ibid., pp. 356-7, Cabot to Acheson, 31 May 1949.

The evidence could be interpreted in either direction in the summer of 1949. The consul-general in Peking, Clubb, reported an indirect approach, allegedly from Chou En-lai, revealing willingness to improve relations with Washington.⁴⁹ The State Department was cautiously favourable but regarded prompt settlement of current disputes to be fundamental.⁵⁰ On the other hand, Mao's speech of 15 June laid stress on the complete defeat of imperialism and its 'running dogs'.⁵¹ Leighton Stuart considered the full text of Mao's On People's Democratic Dictatorship to be a frank statement of where the CCP stood and revealed the potent effect of Stalinism emphasising identification with Moscow more strongly.⁵² Cabot's concluding thoughts, before he departed to a new post, were that the Kremlin did not exert significant power over the CCP. It was manifest that a communist government would soon rule China and this had to be realised. The most urgent challenges: facing the new regime would be economic and these might compel basic changes in policy.⁵³ Stuart, who tended to oscillate, believed that the CCP was unquestionably Marxist-Leninist and would prove tenacious. The United States should follow the traditional policy of supporting the legitimate aspirations of the Chinese people and an improvement in relations could be secured by flexible economic and political initiatives. It was a somewhat muddled appeal for a middle path, explicable psychologically from a distinguished educational administrator, who had spent the greater part of his life in China and who was attempting to reconcile American procedures and principles with the realities of CCP policy.⁵⁴

49. Ibid., pp. 357-60, Cabot to Acheson, 1 June 1949.

50. Ibid., pp. 384—5, Webb to Clubb, 14 June 1949.

51. Ibid., pp. 392-4, Clubb to Acheson, 20 June 1949.

52. Ibid., pp. 405-7, Stuart to Acheson, 6 July 1949.

53. Ibid., pp. 436-40, Cabot to Acheson, 16 July 1949.

54. Ibid., pp. 430-5, memorandum by Stuart, 14 July 1949.

Between July and December 1949 lengthy exchanges took place between London and Washington over recognition. The British government was vitally concerned about economic interests in China and at preserving agreement within the British Commonwealth. The latter was particularly important in the case of India, for Jawaharlal Nehru considered himself the spokesman of the 'new Commonwealth' and was determined to recognise the new government of China sooner rather than later; Nehru was encouraged by the effervescent Indian ambassador in Peking, K. M. Panikkar, who was to play a controversial role in the speculation over the Chinese attitude to the Korean War in the autumn of 1950. Ernest Bevin met Dean Acheson in Paris in June 1949 and Bevin characteristically hoped that Anglo-American consultations over far eastern problems could be forwarded through 'matey' discussion.⁵⁵ Acheson responded positively in July, rather to Bevin's surprise, and sent a memorandum on far eastern matters. The issues examined included attitudes towards the Kuomintang and communist regimes, trade, the position of foreign nationals in China, and how far problems should be coordinated with other interested governments. It might be best for the first steps to be taken by Asiatic states under Indian leadership.⁵⁶ Bevin welcomed Acheson's initiative and proposed to discuss it with him when he accompanied the Chancellor of the Exchequer to Washington in the autumn; he was currently preoccupied with the. Middle East and Kashmir.⁵⁷ The Foreign Office prepared a memorandum for submission to the Far Eastern (Official) Committee, which was involved in the formulation of policy. The Kuomintang regime was described as moribund and there was little point in considering it further except in the context of timing of recognition. The leaders of the CCP were regarded as orthodox Marxist-Leninists and the new communist state would pose a definite threat to western interests in China and South-East Asia. The most sensible western strategy would be to impress on the new government the value of western economic aid and the incompatibility of Soviet and Chinese interests, for example in Manchuria. Britain wished to avoid confrontation with the CCP but would not adopt appeasement in order to avert it. Private western companies engaged in business could make a distinct contribution to developing a new relationship. There would be awkward problems to surmount but British firms had 'weathered many storms in the past'.⁵⁸ It would not be wise to facilitate increases in the military might of China but ordinary trade of a civilian nature should be pursued. The evacuation of British residents was not favoured; merchants and missionaries could assist positively in the era of transition.

55. Letter from Lewis Douglas (US ambassador) to Bevin, 22 July 1949, F10976/1023/10G, FO 371/75813.

56. Memorandum enclosed in letter from Douglas to Bevin, ibid.

57. Letter from Bevin to Douglas, 22 July 1949, ibid.

58. FO memorandum, 8 Aug. 1949, F11653/1023/20, ibid.

On recognition itself, it was necessary to remember that the charter of the UN was so devised that unless there was a Chinese representative to the Security Council, the latter could take decisions solely on procedural issues. It followed that de jure recognition should not be withdrawn from the existing government until it could be transferred to the new government. The question was not an immediate one in that die communists had to bring their southern campaigns to a successful conclusion. However, this would probably be accomplished rapidly and the new regime proclaimed formally. Looking ahead to the likely nature of relations between the West and the communist government, these could develop either in the Soviet satellite pattern or on the Yugoslav model. While it would be foolish to hasten into recognition, it must be accepted that 'to withhold recognition from a government in effective control of a large part of China is legally objectionable and leads to grave practical difficulties regarding the protection of Western interests in China'.⁵⁹ Excessive delay in granting recognition would be counter-productive.

59. Ibid.

Conflicting reports continued to be produced in Washington but the trend was in the direction of a tougher attitude to the CCP. President Truman had little interest in the Far East and was normally content to leave his colleagues to handle them. He detested communism and thought of it in simplistic terms as a monolithic force. Truman was annoyed at the clashes that had occurred over the rights of American consuls and other cases involving the detention of United States nationals. In late August Truman set in train a reappraisal, since he believed that the views contained in NSC 41, adopted in February, which had included emphasis on economic incentives and gaining the trust of the communists, were no longer feasible. Truman also gave instructions that the scope for assisting Li Tsung-jen and Pai Chung-hsi, who were still opposing the communists, should be examined.⁶⁰ Congressional criticism of the failure of American policy in China was growing; Dewey visited Acheson and said that while he had no wish to rake over the past, 'he thought our policy had been full of mistakes and that we have practically lost Asia'.⁶¹ Hardliners opposed to an understanding with the communists contemplated the prospects for aiding the disparate elements fighting the communists in China. A memorandum prepared for Truman in November was couched in classic Cold War 'domino' terms. Russia's possession of the atomic bomb and the progress of communism in China necessitated a drastic reinterpretation of policy. Complete success of communism in China would mean, 'it is only a question of time when all Asia is beyond the possibility of cooperation with the West and is in the anti-American orbit'.⁶²

60. FRUS 1949 (9), pp. 870-1, memorandum by Merchant to Sprouse, based on conversation with Rusk, 24 Aug. 1949.

61. Memorandum by Battle on conversation between Acheson and Dewey, 21 Sept. 1949, folder September 1949, box 64, Acheson Papers, Truman Library.

62. FRUS 1949 (9), p. 582, memorandum, undated, unsigned, enclosed in Webb to Butterworth, 14 Nov. 1949 (pp. 582-8).

The Kuomintang's retreat had supposedly been quickened through inability to send material assistance in time. The various Kuomintang forces resisting the communists were estimated at just over one million embracing Taiwan, Hainan, and parts of Kweichow, Hunan, Szechuan, Sikang and Yunnan. Given leadership, organisation and support, guerrilla forces could oppose the communists for a prolonged period. The Kuomintang required new dynamic leadership and this could be provided by General Sun Li-jen, who was capable, Americantrained and efficient. Sun had just become commander-in-chief of Chinese Army Training Headquarters, Taiwan. Maintenance of troops would connote appreciable payments and a sum of 45 million US dollars should be allocated over a two-year period. Time was pressing and the consequences of the Chinese communists sitting in the UN Security Council had to be grasped.⁶³ Walt Butterworth submitted a commentary on the arguments to Webb, the acting Secretary of State, but this was apparently not passed to Truman. The defect with the arguments in his opinion was that they exaggerated the potential for further resistance; the Kuomintang forces were fast declining, if not disintegrating, and CIA intelligence did not correspond with the estimates in the memorandum. He was not convinced by the arguments and felt they should not be pursued further. It is difficult to penetrate the obscurity over the American relationship with the anti-communist forces in mainland China but it is probable that some assistance was extended to guerrilla groups on the mainland over the next few years.

63. Ibid., pp. 586-8.

Britain advanced gradually but inexorably to recognition. After full exchanges with the ambassador in Peking, Sir Ralph Stevenson, it was decided to withdraw the ambassador for consultations once it was clear that the proclamation of the communist government in Peking was imminent. This was intended to circumvent recognition immediately upon the formation of the government and to give freedom to announce recognition at the most suitable time.⁶⁴ Bevin had explained his intentions to the American ambassador when they met on 26 August:

64. Commonwealth Relations Office to various Commonwealth members, 1 Sept. 1949, F13271/1023/10, FO 371/75814.

We believed ... that the Chinese Communists were first and foremost Chinese and that they were not capable of becoming Russians overnight. I then said that it seemed to me that the American White Paper had effectively dismissed Chiang Kai-shek as being unworthy of any further American support but the United States Government did not seem to have any alternative to put in his place. The Ambassador admitted that there was some force in this.⁶⁵

65. Conversation between Bevin and Douglas, 26 Aug. 1949, F12843/1028/10, ibid.

On 1 October 1949 Mao Tse-tung declared the formal establishment of the Chinese People's Republic at a ceremony in Peking; it was an astonishing achievement for a party which had encountered such serious reverses in the later 1920s and 1930s. Stevenson, who was about to depart from China, recommended to London that steps be taken to establish an informal relationship; the formula that he suggested referred twice to the formation of the 'Central People's Government'.⁶⁶ Stevenson maintained that this did not constitute de facto recognition, which he deemed inappropriate as yet. Stevenson's proposal was accepted and the statement duly conveyed to Peking.⁶⁷ Shortly afterwards the French government pointed out that the statement could be construed as extending de facto recognition because of the use of the term 'Government'. Legal opinion subsequendy concurred in this observation.⁶⁸ The Foreign Office comforted itself with the thought that the Chinese communists had previously made it clear that they were interested only in de jure recognition.⁶⁹ The United States showed no inclination to follow in Britain's footsteps; Butterworth sardonically remarked to the British ambassador in Washington that he hoped Britain's 'bolt into the blue' would end with a landing on solid ground.⁷⁰ Two of the leading American newspapers differed in their attitudes; the New York Times, which frequently represented the State Department opinions, was cautious but the Washington Post advocated recognition.⁷¹

66. Nanking to FO, 1 Oct. 1948, F14782/1023/10, FO 371/75816.

67. FO to Paris (and other capitals), 5 Oct. 1949, ibid.

68. FO to Paris (and other capitals), 10 Oct. 1949, F14878/1023/10, ibid.

69. Ibid.

70. Washington to FO, 1 Nov. 1949, F16417/1023/10, FO 371/75818.

71. New York Times, 17 Oct. 1949, and Washington Post, 18 Oct. 1949 and 16 Nov. 1949. On the latter occasion the Post stated a government should be recognised when clearly in control of a country, as laid down many years before by Secretary Buchanan. However, the case of China was complicated by the detention of Angus Ward, the consul-general in Tientsin; it was possible that the Soviet Union had been involved in Ward's incarceration, according to the Post.

The lengthy process ended for Britain in December 1949 with the approval by the Cabinet of recognition. Acheson was informed that Britain had delayed for some months but the important issues could be postponed no longer. The presence of large Chinese communities in Hong Kong, Malaya and Singapore rendered recognition essential. To delay recognition would be to assist the aims of the Soviet Union; it would be dangerous for China to be isolated and subject to intensified Soviet pressure. The British government did not approve of Communist China but recognition was irrelevant, since Britain recognised Russia and the satellite states. It was expected that recognition would be accorded on 2 January 1950.⁷² Stevenson having now returned to London, the charge d'affaires, John Hutchison, dealt with the procedural aspects. He was based in Nanking but expected to transfer to Peking after recognition. The British communication to the communist authorities stated that this was a response to Chairman Mao's statement of 1 October; the action was being taken because the government was in ' effective control of by far the greater part of the territory in China' and that de jure recognition was now declared.⁷³ The Kuomintang regime, based in Taiwan, was notified of withdrawal of recognition but Britain retained representation at the consular level in Taiwan.⁷⁴ Anglo-American relations were strained considerably and this strain was exacerbated at various times during the Korean War. Britain did not gain as much out of recognition as had been hoped, for China was determined to end the final relics of western imperialism except for Hong Kong. Dean Acheson hoped that a gradual reduction in American relations with the Kuomintang could be effected and in private he believed there was much to be said for the British decision.⁷⁵ The political realities of Washington precluded any idea of American recognition for some time to come.

72. FO to Washington, 16 Dec. 1949, F19057/1023/10, FO 371/75828.

73. FO to Nanking, 23 Dec. 1949, F18896/1023/10, FO 371/75827.

74. FO to Tamsui (Taiwan), 3 Jan. 1950, ibid.

75. Tucker, Patterns in the Dust, p. 191.

The significance of Taiwan

Lastly let us consider Taiwan (Formosa). This was extremely significant in political and strategic terms. Taiwan was the scene of Chiang Kai-shek's final stand; if Taiwan fell the last shreds of Chiang's credibility would vanish. There was talk of Chiang's definitive retirement, perhaps to Switzerland, but the Generalissimo had no intention of departing. He believed he had a historic task to fulfil as the successor to Sun Yat-sen and felt that the Kuomintang could be saved at the eleventh hour provided that he could operate with other trenchant anti-communists such as Syngman Rhee and President Quirino of the Philippines and induce the United States to accept the obligation to defend Taiwan and South Korea. A third world war could be the salvation of the Kuomintang. Chiang appeared in effective control of Taiwan, although there was speculation on a possible coup, perhaps to advance General Sun Li-jen. The influx of numerous refugees was resented by the native Taiwanese, who had suffered enough already from the Kuomintang, notably in the harsh suppression of the 1947 rising. There had been some American interest in the Taiwanese autonomy movement, especially in 1948-49 when the complete disintegration of the Kuomintang was feared. The tact that large numbers of troops were evacuated from the mainland with the air force and loyal sections of the navy postponed the collapse and eliminated the likelihood of advancing the Taiwanese cause. The strategic position of Taiwan was the vital question for American policy-makers; they had long ago given up hope of Chiang's revival, as the China White Paper demonstrated. Chinese communist possession of Taiwan could pose a threat to the concept of the American frontier in the western Pacific, formulated in the later 1940s. The key aspect was precisely how important was Taiwan? Was it so valuable as to justify American intervention to prevent the communists capturing it? This was the focus of intense debate in Washington in the autumn of 1949 and in the course of 1950 until the question was decisively answered by the events of June and November 1950.

The relationship between Taiwan and Japan is a significant area to examine. Economic relations were close and the political connections between General MacArthur and the Kuomintang are a fascinating if obscure subject. Trade between Taiwan and Japan had revived by 1948 to the point where the formation of a trade association to promote commerce was envisaged in Taiwan.⁷⁶ In addition, trading contacts with South Korea were being developed. The descent of large numbers of refugees in 1948-49 worsened the economic problems in Taiwan with the onset of serious inflation. Production of manufactured sugar, Taiwan's most valuable export, rose from 260,000 tons in 1948 to 620,000 tons in 1949. The biggest single contract for sugar exports was with SCAP, although the bulk of the sugar was exported to countries within the sterling area and purchases were made by the British Ministry of Food. It was estimated in July 1949 that there were over 400,000 soldiers in Taiwan, all of whom had escaped from the mainland, plus approximately half a million civilian refugees.⁷⁷ Taiwanese autonomy movements operated in part from Japan. American press reports from Tokyo in September 1948 discussed the activities of the Taiwan independence movement, stimulated by the arrival in Tokyo from Taiwan of Peter K. Huang, one of the most vigorous exponents of the cause. The headquarters of the Formosan League for Re-emancipation was located in Hong Kong and the movement was said to have a significant number of agents in Japan and the Philippines. The group's policy was that the UN should assume responsibility for Taiwan pending the holding of a plebiscite. It had advocated autonomy rather than independence for Taiwan but had moved more towards the latter; coordination with the other movements opposing the Kuomintang regime, the Anti-Government Democratic League and the Communist Party, had not so far been established. The most prominent leaders of the Formosan League were W. K. and W. I. Liao, large property owners resident in Hong Kong. In general terms Taiwanese autonomy was viewed sympathetically within Japan and the Kuomintang alleged that Japanese were financing it together with 'other foreign interests'.⁷⁸ The British consul in Taiwan, E. T. Biggs, reported Kuomintang apprehension that the frequent tales of incompetent, oppressive rule in Taiwan might lead the United States to support the autonomy movement. There was considerable interest in the concept of Taiwanese autonomy in Washington and it is likely that MacArthur facilitated the activities of the autonomists in Japan at a. time when the fate of the Kuomintang was uncertain.

76. Biggs (British consul, Tamsui) to Lamb (British embassy, Nanking), 24 July 1948, FI5592/565/10, FO 371/69621.

77. Report in The Times, 20 July 1949.

78. Biggs to Lamb, 12 Oct. 1948, F15622/565/10, FO 371/69621.

MacArthur believed firmly that Taiwan must be denied to the communists. He urged the provision of more assistance to the Kuomintang and SGAP gave discreet help where feasible. One form comprised unofficially permitting former Japanese military personnel to visit Taiwan to advise the Kuomintang. Alvary Gascoigne, head of the British mission in Tokyo, informed London in September 1949 that MacArthur had for some months laid stress on Taiwan as an essential constituent of the 'Island line', including Japan, Okinawa and the Philippines. General Willoughby, MacArthur's intelligence chief, told Malcolm MacDonald, Britain's high commissioner in South-East Asia then visiting Tokyo, that he (Willoughby) included Taiwan in the line of vital American defence. As Gascoigne remarked, this must have been the view of MacArthur.⁷⁹ Willoughby had recently been asked by journalists for information on Japanese smuggled to Taiwan to assist the Kuomintang. Willoughby replied that probably a few had departed in this way and it could not be prevented, given the limited numbers of police in Japan. A British representative questioned one of Willoughby's subordinates on 17 September and he admitted that General Nemoto and a small number of former senior and junior officers had gone to Taiwan since June 1947.⁸⁰ A CIA memorandum by Admiral Hillenkoetter, drafted on 21 November 1949 and to be found in a sanitised form in the Truman Papers, summarised a private luncheon meeting between General Claire L. Chennault and MacArthur in Tokyo at which 'General MacArthur expressed regret that the present United States policy prevents him from helping the Chinese; he asked Chennault to convey word-of-mouth message to the Generalissimo and Pai Chung-hsi, urging them "to fight to the end'".⁸¹ MacArthur had urged Chennault - who surely needed little encouragement - to urge the opponents of communism to fight as vigorously as they could. MacArthur's chief of staff'let slip' that Japanese volunteers, chiefly aviators, were being allowed to leave Japan for Taiwan.⁸² Undoubtedly MacArthur was well informed of developments in Taiwan and did what he could to inspire continued resistance by the Kuomintang. It was one of the indications, before the Korean War began, of the divergences between MacArthur and the Truman administration in the sense that MacArthur felt a political commitment to support the Kuomintang, which was certainly not the policy of the administration.

79. Tokyo to FO, 17 Sept. 1949, F14000/1015/10, FO 371/75770.

80. Ibid.

81. CIA memorandum by Hillenkoetter, 21 Nov. 1949, sanitised copy, folder CIA memoranda, 1949, Harry S. Truman Papers, PSF, Truman Library.

82. Ibid.

The joint chiefs of staff and the NSC spent much time evaluating the strategic significance of Taiwan in 1948-50. The basic principles of their assessments remained consistent, although points of emphasis varied at different times. In November 1948 the joint chiefs submitted a report describing Taiwan as most important strategically, for the island could be used as a staging post for troops or for strategic air and naval operations. The joint chiefs believed that Taiwan should be denied to the Chinese communists by diplomatic and economic pressures.⁸³ The NSC produced a comprehensive report in January 1949. The Taiwanese autonomy movement was termed weak, having been effectively crushed by the Kuomintang regional administration in 1947; the communists in Taiwan were similarly weak. The island had been badly governed since 1945, the Kuomintang having revealed its familiar genius for inept administration. It would be possible for the United States to occupy Taiwan under the terms of the Japanese surrender in 1945 with the consent of the Kuomintang or after the disintegration of the latter. As an alternative, an arrangement for American extraterritorial or base rights in Taiwan could be negotiated. Politically the United States could support a rump Kuomintang regime or promote a T aiwan autonomy administration. The aim of the United States should be to prevent the communists taking Taiwan or the Pescadores. Given the prevailing uncertainties, flexibility should be maintained with policy options left open. It was imperative that a new regime in Taiwan, whatever its political commitment, should function fairly and effectively.⁸⁴ The joint chiefs reported to Forrestal, the Secretary of Defense, in February summarising the principal aspects and emphasising that while Taiwan should be denied to the enemy if possible, they believed that there could be no United States commitment to defend Taiwan owing to onerous global responsibilities.⁸⁵ In March 1949 the joint chiefs were contemplating the possibility of having to act in Taiwan through a show of military force if the situation deteriorated to the stage where this was necessary. Acheson told the NSC that it was important to act in conjunction with other interested powers:

83. FRUS 1949 (9), pp. 261-2, NSC 37, note by Souers, 1 Dec. 1948, enclosing memorandum from joint chiefs of staff to Forrestal, 24 Nov. 1948.

84. Ibid., pp. 971-5, NSC 37/1, draft report by NSC, 19 Jan. 1949.

85. Ibid., pp. 284—6, NSC 37/3, memorandum by joint chiefs of staff to Forrestal, 10 Feb. 1949.

If we are to intervene militarily on the island, we shall in all probability, do so in concert with like-minded powers, preferably using UN mechanisms and with the proclaimed intentions of satisfying the legitimate demands of the indigenous Formosans for self-determination either under a UN trusteeship or through independence.⁸⁶

86. Ibid., pp. 294—6, memorandum by Souers, 3 Mar. 1949, enclosing statement by Acheson at NSC.

The State Department moved in the summer of 1949 to preferring the installation of a temporary administration, under UN or American auspices, which would prepare a settlement on the basis of self-determination for the people of Taiwan; the Kuomintang was effectively finished.⁸⁷ Shortly afterwards the joint chiefs submitted a revised statement reiterating that while Taiwan was strategically important, Taiwan and the Pescadores were not of such compelling military value as to commit United States forces to occupation short of a major war; in the circumstances military occupation was not recommended.⁸⁸ By October the joint chiefs favoured economic aid to Taiwan and the re-establishment of a military advisory group. Economically Taiwan should be made self-sufficient but the Chinese administration must reform and eliminate the grave defects of their rule on the mainland.⁸⁹ Towards the end of 1949 MacArthur and the joint chiefs placed more emphasis on the importance of Taiwan.

87. Ibid., pp. 356-64, memorandum by Kennan, 6 July 1949, and pp. 369-71, memorandum from State Department to Souers, 4 Aug. 1949.

88. Ibid., pp. 376-8, memorandum byJCS, 22 Aug. 1949.

89. Ibid., pp. 392-7, NSC 37/8, note by Souers, 6 Oct. 1949, enclosing draft memorandum.

MacArthur explained his views in December. Taiwan was essential to 'our littoral island defense' and could be retained 'with very little effort'.⁹⁰ Taiwan was legally part of Japan until a peace treaty had been signed. The Kuomintang government had acted as a custodian on behalf of the allies on occupying Taiwan. Should Taiwan be threatened with invasion, all the allies should combine to defend it:

90. Memorandum by Voorhees to Johnson, 14 Dec. 1949, Formosa file, RG6, box 8, Mac Arthur Memorial.

Such a defense could be made without the necessity of committing US troops, merely by a declaration under the Potsdam Agreement that the US would treat any attempt to invade Formosa as an act of war, and similarly that it would be treated as an act of war for the Nationalist Government itself to use Formosa as a base to launch an attack against China.⁹¹

91. Ibid.

It could be decided subsequently that Taiwan should become an independent nation. An appreciable part of the sum of 75 million US dollars allocated for Chinese matters could be used to defend Taiwan. MacArthur's concluding thoughts were thus summarised by Tracy S. Voorhees, Under-Secretary of the Army:

It would be fatal to split the US line of littoral bases by letting the Communists put an air force on Formosa thereby threatening both Clark Field in the Philippines and our fields on Okinawa. However, placing US Forces on Formosa is not favoured.⁹²

92. Ibid.

Louis Johnson sent a memorandum to President Truman explaining that the State and Defense departments were conferring on policy and that

Generally speaking, the staffs agree that efforts should be continued and perhaps increased to deny Formosa to the Communists. The nature and extent of such efforts are now being considered in some detail . . . They include political and economic aid, and also military advice and assistance short of overt military action.⁹³

93. Memorandum from Johnson to Truman, 15 Dec. 1949, ibid.

The joint chiefs recommended a modest, well-organised and supervised programme of military aid to Taiwan in the security interest of the United States: this should be combined with an increased political, economic and psychological programme as an intensified version of the existing programme. Their recommendations had to be seen as 'part of the overall problem of resisting the spread of Communist domination of East Asia'.⁹⁴

94. FRUS 1949 (9), pp. 460-1, note by Souers, 7 Dec. 1949, enclosing joint chiefs of staff memorandum, 23 Dec. 1949.

Dean Acheson's thinking was running along different lines. He was attracted by the prospect of separating Peking from Moscow in the wider interest of American global policies. Acheson worked to bring the finer points of the situation to Truman's attention. Truman devoted little thought to the Far East and when he did tended to see it in terms of communism as a monolithic force. He was capable of appreciating alternative arguments, however, when these were carefully brought to his attention. On 17 November Acheson had arranged a meeting with Truman and the 'consultants' accompanying Acheson. According to Acheson's record of the conversation, Truman 'had gotten a new insight into the reasons for the Communist success in China, a better understanding of the whole situation and found himself thinking about it in a quite new way'.⁹⁵ The President intended to review far eastern policy in total when Philip Jessup returned from the Far East. Acheson told Truman that as he saw it, the choice facing the administration was between two courses of action:

95. Memorandum by Acheson, 17 Nov. 1949, folder, memorandum of conversations, November 1949, box 64, Acheson Papers, Truman Library.

One might be to oppose the Communists [sic] regime, harass it, needle it, and if an opportunity appeared to attempt to overthrow it. Another objective of policy would be to attempt to detach it from subservience to Moscow and over a period of time encourage those vigorous influences which might modify it. I pointed out that this second alternative did not mean a policy of appeasement any more than it had in the case of Tito. If the Communists took action detrimental to the United States it should be opposed with vigor ...⁹⁶

96. FRUS 1949 (9), p. 464, memorandum by Acheson, 29 Dec. 1949.

With the joint chiefs urging a tougher approach in December the Secretary of State arranged a meeting for 29 December, attended by Generals Bradley and Collins, Lieutenant-General Norstad, Admiral Sherman with Rusk, Butterworth and Merchant from the State Department. Bradley said the basic attitude of the joint chiefs had not changed: Taiwan had always been considered important. The Kuomintang air force had now moved to Taiwan with their families and this reduced the danger of defections. Collins spoke of the need to prevent communist dominance of Indo-China, Burma and Thailand. He agreed that the danger was one of infiltration and subversion rather than Chinese communist invasion.⁹⁷ There was no thought of sending combat troops to Taiwan and the joint chiefs preferred former officers being employed as advisers. Acheson believed facts had to be faced; there was no real base from which Chinese opposition to communism could be conducted. The communist threat in South-East Asia would be advanced through subversion, not attack. Sino-Soviet relations had already encountered strain because of the Soviet attempt to detach certain northern provinces; furthermore Mao Tse-tung was not an uncritical adherent of the Kremlin, since he had come to power through his own efforts:

97. Ibid., p. 466.

This situation, I pointed out, is our one important asset in China and it would have to be for a very important strategic purpose that we would take an action which would substitute ourselves for the Soviets as the imperialist menace to China. For this reason we oppose waging economic warfare against China.⁹⁸

98. Acheson, Present at the Creation, p. 350.

The problem with the Kuomintang in Taiwan was that they might succumb to the same features of internal decline that had affected them on the mainland. If absolutely necessary a policy of postponing a communist take-over of Taiwan for one year could be adopted but it should only be done for vital defence purposes.

Growing pressure from leading Republicans to increase aid for Taiwan was applied in November-December. Senator H. Alexander Smith (New Jersey) put forward the proposal that Taiwan was still Japanese territory and that the United States could develop a protectorate there. Senators William F. Knowland (California) and Robert A. Taft (Ohio) with the support of ex-President Herbert Hoover publicly urged that the United States navy be deployed to defend Taiwan.⁹⁹ Truman and Acheson concluded that the time had come for definitive statements to curb the incessant speculation. Truman issued a press statement on 5 January 1950 to the effect that Taiwan was clearly Chinese territory and the United States harboured no ulterior motives concerning Taiwan. There would be no involvement in the Chinese Civil War, neither would military assistance or advice be furnished to Taiwan. So far as the administration was concerned, Taiwan had sufficient resources to defend the island. Assistance from the ECA would be continued. Acheson quickly followed with a major speech delivered on 12 January 1950 at the National Press Club. The speech was given on the basis of 'a page or two of notes';¹⁰⁰ however, Bruce Cumings has shown that it was carefully prepared over a lengthy period and after drafts were circulated within the State Department for comment or emendation.¹⁰¹ It was a crisp, forthright address covering much ground but too explicit on a few aspects that would have been better cloaked with at least some opaqueness. Acheson emphasised that Chiang Kai-shek and his party had failed because of their own ineptitude and for no other reason. The Chinese communists had captured revolutionary nationalism 'and ridden to victory and power' on it.¹⁰² The Soviet Union represented communist imperialism and was the enemy of China. Acheson next turned to military security: the essential line of defence for the United States lay in the chain of islands ranging from the Aleutians in the north through Japan to the Ryukyus and the Philippines. This line would be strongly defended. He did not refer to South Korea or Taiwan but the implication was unmistakably clear that these were not deemed vital in Washington. Acheson covered himself with a vague reference to the UN:

99. Ibid., p. 351.

100. Ibid., p. 354.

101. Bruce Cumings, The Origins of the Korean War, vol. 2, The Roaring of the Cataract, 1947-1950 (Princeton, NJ, 1990), pp. 410, 420.

102. Acheson, Present at the Creation, p. 356.

So far as the military security of other areas in the Pacific is concerned, it must be clear that no person can guarantee these areas against military attack . . .

Should such an attack occur . . . the initial reliance must be on the people attacked to resist it and then upon the commitments of the entire civilized world under the Charter of the United Nations which so far has not proved a weak reed to lean on by any people who are determined to protect their independence against outside aggression.¹⁰³

103. Ibid., p. 357.

The statements of Truman and Acheson were too blunt, given the fact that it was arguably not in America's interest that Taiwan should fall within the near future and not desirable that South Korea should be liquidated. Hostages to fortune were given and the United States acted to assist South Korea and Taiwan within less than six months. The speeches could only have conveyed the impression that the United States was unlikely to act.

Mao's visit to Moscow and Sino-Soviet agreements

It was not tactically wise for Acheson to refer to Sino-Soviet relations in the way he did when the leaders of the two countries were engaged in lengthy, complex and probably acrid discussions from which emerged the Sino-Soviet treaty of February 1950. Mao Tse-tung had travelled to Moscow in December 1949 for his first excursion outside China.¹⁰⁴ Relations between Soviet and Chinese officials were fraught. When Mao's train advanced into Soviet far eastern territory, Soviet officials were invited to accept Chinese hospitality but they declined.¹⁰⁵ When he arrived at the railway station in Moscow on 16 December he made a short speech paying tribute to Stalin's leadership of world communism but also indicating indirectly that China must be treated as a great nation and not in a position analogous to the satellite states of eastern Europe.¹⁰⁶ Difficult issues were bound to arise, the fundamental aspect being the incompatibility of two revolutionary movements that had come to power in very different ways with different cultures and attitudes. In more concrete terms problems surrounded the Russian presence in Manchuria and the arrangements that would obtain for the economic aid China required. It could be argued that the statements made by Truman and Acheson in January would allay Chinese suspicions and push Mao into a more obstinate response. Equally their remarks might be viewed as a crude attempt to drive China and the Soviet Union further apart. Again it might be: said there was no impact on the Sino-Soviet talks. The duration of Mao's stay in Moscow provided evidence for the deduction that a harmonious identification of interests had not been arrived at. Mao's lengthy stay amidst the Moscow winter was not congenial to him. Stalin castigated the Chinese communists for being excessively nationalistic and described Mao's theoretical articles unfavourably.¹⁰⁷ Stalin ignored Mao at different times during his visit, thereby emphasising that he was the senior communist leader in the world and would act as he pleased. When Stalin met Liu Shao-ch'i, Mao's deputy, in 1949 Stalin apologised for his mistakes in dealing with China in the past but no such apology was made to Mao himself. Once again, this conveyed a message of Stalin's superiority and independence.¹⁰⁸ The British ambassador in Moscow, Sir David Kelly, reported on 31 January that it was most unusual for a visiting communist leader to remain for a period approaching seven weeks. Kelly's assessment was that both Stalin and Mao had been unyielding and that serious divergence had occurred.¹⁰⁹ Esler Dening of the British Foreign Office believed economic aspects, border problems affecting Sinkiang, Inner Mongolia and Manchuria, and Mao's inexperience of top-level diplomacy were the key features.¹¹⁰ Chou En-lai arrived in Moscow a fortnight earlier, which showed that Chou's formidable diplomatic skills were required.¹¹¹ The British charge d'affaires in China, Hutchison, was told that economic questions were the most contentious and that the talks were going badly.¹¹²

104. See Zhang Shu Guang, Mao's Military Romanticism: China and the Korean War, 1950-1953 (Lawrence, Kan., 1995), pp. 39-40. Zhang is critical of Mao for not adopting a more straightforward approach in his initial exchanges with Stalin.

105. Goncharov, Lewis and Xue, Uncertain Partners, p. 85.

106. FRUS 1949 (8), p. 642, Kirk to Acheson, 21 Dec. 1949.

107. Goncharov, Lewis and Xue, Uncertain Partners, p. 104.

108. Chen Jian, China's Road to the Korean War: The Making of the Sino-American Confrontation (New York, 1994), pp. 72-3.

109. Moscow to FO, 31 Jan. 1950, FC10338/29A, FO 371/83313.

110. Minute by Dening, 2 Feb. 1950, ibid.

111. A lively portrait of Chou En-lai is to be found in Dick Wilson, Chou: The Story of Zhou Enlai, 1898-1976 (London, 1984).

112. Nanking to FO, 6 Feb. 1950, FC10338/33, FO 371/83314.

The Sino-Soviet Agreements were signed in Moscow on 14 February. They comprised a treaty of friendship, alliance and mutual assistance, an agreement on the Chinese Changchun railway, Port Arthur and Dairen, an agreement extending credits from the Soviet Union to China, and two exchanges of notes, one of which abrogated the Sino-Soviet treaty of 1945. The texts were published in English in the Soviet Monitor. The treaty of alliance pledged joint cooperation against 'the rebirth of Japanese imperialism and a repetition of aggression on the part of Japan or any other State which should unite in any form with Japan in acts of aggression'.¹¹³ Article I provided for full cooperation to meet any future threat posed by Japan: if Japan 'or States allied with it' attacked either Russia or China, the other would render military assistance. Article II called for the swift conclusion of a peace treaty with Japan, jointly with the other powers who had fought against Japan in the Second World War. Article III was a mutual pledge not to participate in a coalition against the other signatory. Article IV stipulated that consultation should take place on all major international matters. Article V was a statement of mutual respect with a promise to consolidate economic and cultural links and to render economic assistance to one another. Article VI indicated that it came into effect upon ratification. The concluding paragraph stated that the treaty would last for thirty years. In the agreement on Manchuria the Soviet Union transferred all its rights in the Chinese Changchun railway either upon conclusion of a peace treaty with Japan or not later than the end of 1952. The naval base at Port Arthur would be handed over to China by the end of 1952 at the latest. The future of Port Dalny would be determined on the conclusion of a peace treaty, but the administration of the port belonged to China. The economic agreement consisted of a Soviet undertaking to grant 300 million US dollars; credits would be on favourable terms of 1 per cent annual interest. China would redeem the credits, as well as paying interest with deliveries of raw materials, tea, gold, American dollars. Redemption of credits would be effected in ten years in equal annual parts.

113. 'Treaty of friendship, alliance and mutual assistance between the USSR and the People's Republic of China', 14 Feb. 1950, reproduced in FC 10338/88, FO 371/83315.

The British Foreign Office's analysis of the cluster of agreements concluded that on the surface there was no indication of friction between the signatories and China would feel encouraged. If the treaty and agreements were examined more closely, however, the Soviet Union emerged as less generous. The treaty itself was in essence a propaganda instrument condemning the danger of a Japanese military revival. In a war the Soviet Union would gain more than China because in a Russo-American conflict the United States would probably use Japanese bases; in such circumstances China would most likely be committed to entering the war. Neither the United States nor Japan would, in all likelihood, become involved in hostilities with China alone and the Soviet guarantee was therefore less valuable. The Manchurian provisions did not have to be implemented before the end of 1952 and, it was prophetically observed, might not materialise even then. The financial credits, while possibly generous given Russia's own problems, were paltry when seen against the enormous problems facing China.¹¹⁴

114. Analysis of treaty and agreements, Far Eastern Department, 13 Mar. 1950, ibid.

Goncharov, Lewis and Xue have produced interesting evidence from Chinese sources concerning the outcome of Mao's visit. Stalin was not willing to provide a comprehensive guarantee of support to China so as to include nuclear weapons, despite the fact that the Soviet Union had tested an atomic bomb successfully a few months before.¹¹⁵ Various secret agreements were signed and it is likely that certain of these have not yet been made available in the Russian and Chinese archives. From what is known, it is clear that the additional agreement and other secret protocols, signed in February 1950, favoured predominantly the Soviet Union and included significant concessions by China regarding Manchuria and Sinkiang (the Soviet Union agreed to pursue a similar approach in Soviet far eastern territory and in the Central Asian republics). Mao detested this concession and protested to Molotov, in April 1956, that only imperialists would act in this manner.¹¹⁶ In an interview conducted in 1992, a Soviet official, M. P. Kapitsa, stated that Stalin wished to exclude an American presence entirely from Manchuria and Sinkiang.¹¹⁷

115. Goncharov, Lewis and Xue, Uncertain Partners, p. 118.

116. Ibid., p. 122.

117. Ibid., p. 123.

The relevance of China to the outbreak of the Korean War is in the context of the sharp decline of Sino-American relations in the period after 1945. Many Americans were disillusioned with the incompetence of the Kuomintang; some believed the Truman administration had contributed, deliberately or through negligence, to the eclipse of Chiang Kai-shek. Chinese communism was viewed with suspicion or hostility by most Americans. It represented an alien ideology and might be no more than a branch of the Kremlin. Heightened domestic tensions in the utilisation of China by certain prominent members of the Republican Party accentuated the dimensions of the problem. Taiwan complicated matters greatly, since it was inextricably linked with the fate of Chiang Kai-shek, American strategy in the west Pacific, the role of General MacArthur, and American domestic politics. The Chinese communists felt much bitterness at the American aid to the Kuomintang, the rebuilding of Japan as a conceivable future threat under SCAP, and at American refusal to contemplate recognition of Peking or the latter's securing membership of the UN Security Council. Sino-Soviet relations were not close and contained great tensions but it was unlikely that a rift would occur for a number of years. A clash between the United States and China could easily arise at any time and might be precipitated by one of a range of issues.