Foreign Relations of the United States, 1964–1968, Volume XXX, China

133. Information Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to Secretary of State Rusk¹

Washington, March 14, 1966.

SUBJECT

• From Lee Kuan Yew to Chiang Kai-shek: Far East—March 1966

Around our Chiefs of Mission Conference, I paid visits to Japan (briefly), Viet-Nam, Thailand, Singapore, Malaysia, the Philippines, and the Republic of China. This memorandum gives the highlights of my observations, drawing briefly on some of the broader policy points already covered in the “highlights” summary of our Baguio meeting, but primarily on my own observations.

[Here follows discussion of the area in general and of specific countries.]

7. Republic of China.

a. Fear of Basic Change in US Policy. Although the travel regulation on scholars² was calmly received while I was there, the current US discussion is doubtless stirring some fears.

b. Chinese Representation. This is the real touchstone. I delivered our message of “deep concern” and laid out the negative factors fully. They got the message, and it was certainly wise not to take it further at this stage. I suspect we will be hearing from them, and that the argument must be raging in high quarters as to whether they should pull out if the worse comes to the worst and some formula is presented that offers the possibility of membership to Peiping. If they are to come to the right answer, they must deeply believe that we are doing everything possible to help them (e.g., in Vanguard below) and that, at least for the present, we are doing our utmost to prevent unwise initiatives (e.g., as has already been done with Canada).

c. The Gimo. The Gimo is currently in a state of mild jitters, reflected in excessive dwelling on the ChiCom threat to Taiwan but more conspicuously in the most unwise proposals for drastic emergency powers that we know (from highly sensitive sources) that he has been putting forward. I believe we can cushion his fear of ChiCom action—if indeed it is real—and his reaction to our continued negative attitude on the Mainland planning seemed resigned. The internal reorganization could be more serious, although the final proposal—apparently much modified by C.K. Yen and others—will not be too hard to present to the world, especially in view of its pairing of reorganization with possible elections within Taiwan. The underlying problem apparently is the Gimo’s fear that his death could produce a chaotic succession situation. Although the succession has now become much more uncertain than we had supposed—with Chiang Ching-kuo’s stock down and health uncertain, and C.K. Yen’s elevation—it is hard to see why it should be so chaotic as the Gimo appears to believe. Ching-kuo and Yen are personally close and both strike me as being at heart “realists” who do not really accept the Mainland mystique. As to the reorganization, all will depend on what is actually done under it, and we need to do some talking in the right places when the plan is surfaced.

d. MAP and Military Facilities. I encountered moderate pressure on MAP, but I think this can be met if we maintain roughly the planned levels. They fully expect to spend more money of their own, including $5–10 million of military sales from us. They know we want them to reduce their forces, but unless the economic pinch gets much worse it seems wholly out of the cards that they will do so. There must be a latent argument within the GRC on military spending, and this could indeed break into the open if the Gimo departed. For now, his voice is decisive on the military side of the argument, and my judgment is that—having made our basic view quite clear—we would be wasting credit to no good purpose to hammer any harder. The whole MAP argument now has additional coloration from the fact that the GRC is giving us significant air and naval facilities, to the point where our air transport squadrons will shortly be taking over the Chinese areas of their major air base. So far, my visit gave no indication that they would use this leverage overtly, but the time may come.

e. Economic Planning and Vanguard. This is our most important action decision. I was tremendously impressed both by their internal agricultural policy and by their expanded plans for Africa. They have now appealed specifically for our support of the latter through the use of PL-480 wheat to generate local currency. We ourselves would get a proportion of the currency, and, since our local currency supply runs out in the fall, this would substitute for gold flow. But, more basically, the “exchange of resources” (K.T. Li’s phrase) involved in our assisting a significant technical assistance program for food in Africa seems to me a good buy in its own right, with the major additional factor of its relation to the UN problem. While it can be argued that the Chinese have the money themselves, their external accounts are now slightly adverse. In short, I would recommend favorable consideration of the PL-480 proposal.

f. New Ambassador. Hummel’s excellent performance and their satisfaction with our nominee have somewhat muted the official concern over the delay, although one must assume that recent newspaper attacks have been to some extent inspired. The situation is deeply unsatisfactory on balance, and particularly so with the kind of talking that we may soon have to do on the UN and other issues.

1. Source: Department of State, Central Files, ORG 3–2. Secret; Exdis. Drafted by Bundy. A handwritten notation on the source text indicates that it was seen by Rusk.
2. On March 10 the Department of State announced that it would consider on an individual basis applications from scholars for travel to restricted areas. For text of the announcement, see Department of State Bulletin, March 28, 1966, pp. 491–492.