Foreign Relations of the United States: Diplomatic Papers, 1943, China

711.93/533

Memorandum by the Second Secretary of Embassy in China (Davies), Temporarily in the United States

The American Stake in Chinese Unity: Proposals for Preliminary American Action

Summary

The following memorandum discusses the basis of the present hostility between the Central Government of China and the Chinese Communists. It goes on to examine the probable culmination of this mutual antipathy in civil war. The conclusion is reached that, if civil war occurs, the Soviet Union will probably go to the support of the Communists and the United States will find itself backing the Central Government and so set against Russia.

In view of the risks to the United States implicit in the present trend toward civil war in China and in view of our complete lack of official information, both political and military, from the Chinese Communist area, it is recommended that a consulate general be established in Chinese Communist territory and that a military observer’s mission also be sent to that area. These two recommendations are preliminary actions. Any decision regarding a more positive policy toward the Central Government and the Chinese Communists should probably await and be based upon intelligence from the political and military observers.

The Chinese Communists

The Chinese Communist Party was formed during the early 1920’s as a workers’ party. With Russian support the Party grew in strength. Chiang Kai-shek’s 1926 northward campaign from Canton to the Yangtze valley—the campaign by which he came into power—was Communist in character. The Party political leaders, with their Russian advisers, set up a government at Hankow. Shortly after, in 1927, Chiang turned against the Party, having formed an alliance of power with Shanghai big business and banking interests. From that time onward until the establishment of the united front he attempted to crush the Communists.

Under pressure from Chiang’s troops the Hankow regime collapsed and the Communists were dispersed. The Russian advisers returned to the Soviet Union. The Communists then operated as a primarily agrarian movement in a number of small rural areas in central and eastern China. Their principal center embraced several counties in southern Kiangsi Province.

The Generalissimo visited Sian in December 1936 in connection with his plans for further campaigns against the Communists. At Sian he was kidnapped by Manchurian elements under the command of Marshal Chang Hsueh-liang. The Communists interposed in the negotiations between the Manchurians and Chiang and as a result there was established, following the release of the Generalissimo, a united front. By the terms of the agreement the Communists recognized the Generalissimo as the leader of all China, including Communist China, in united resistance to further Japanese encroachments. They abolished the Red flag and administrative and military terminology which would suggest that they were a separate government. They retained, however, a wide degree of administrative autonomy in that portion of Shensi Province which they occupied.

In the first year and a half of the Japanese invasion of China, Chiang, generally speaking, lost in north China the urban centers and lines of communications to the Japanese and the rural areas to the Communists. Most of the Central Government officials in areas through which the Japanese passed fled or went into the services of the enemy as puppets. By this process the Chinese Communists have come to control more territory than they ever have.

Present Communist area is estimated by American military sources to total about 120,000 square miles. It is further estimated that approximately 25,000,000 people are now living in Communist-controlled territory. The strength of the Communist Eighth Route Army is placed by American military authorities at 60,000–100,000. The Communists themselves claim that they have well over 1,000,000 men under arms. This figure, which is probably an exaggeration, includes guerrillas and armed peasants.

Chinese Communist policy appears to have followed the Comintern line. In its initial expression the policy adhered to the program of world revolution. With the Comintern’s abandonment of this program, the Chinese Communists embraced in 1935, in compliance with Moscow directives, the policy of the united front.

The new line, so far as it applied to Asia, was in all probability prompted by the Kremlin’s realistic appraisal of the Soviet Union’s position in the Far East. Russia was threatened by Japan. The Japanese Army had with its Manchurian adventure apparently decided upon a policy of continental expansion. Confronted by a strong Russian Army in eastern Siberia, the Japanese seemed to be intent upon outflanking the Russians through China. China could not be expected to offer strong resistance to Japanese expansion so long as it was torn by internal dissension. It was therefore evident that China should become unified and actively resist Japanese pressure westward.

As the Chinese Communists moved away from world revolution to nationalism they also moved in the direction of more moderate internal political and economic policy. Whether these other moves were in compliance with Comintern dictates is less material than that they were historically and evolutionarily sound.

The Communists have for some time admitted that China cannot make an immediate transition from its present political and economic forms to communism. They maintain that China is a semi-feudal agricultural country and that before it can attain to communism it must pass through a period of bourgeois democratic nationalism. Their immediate aims are therefore the realization of democratic processes in China. In economic life they advocate the retention of private ownership and individual enterprise.

Foreign observers (including Americans) who have recently visited the Communist area agree that the Communist regime in present policy is far removed from orthodox Communism; that it is administratively remarkably honest; that popular elections are held; that individual economic freedom is relatively uncurbed; that the regime appears to have strong popular support and that it is described less accurately as communist than as agrarian democratic.

The trend toward nationalism is believed to be strongest among the troops and guerrillas who have been fighting the national enemy. Although we have no accurate information on the subject, it is suspected that the political leaders of the Party retain their pro-Russian orientation and that they are, notwithstanding the dissolution of the Comintern, likely to be susceptible to Moscow direction. This probable schism within the Party may prove at some later date to be of major importance.

The Central Government

The Central Government of China is based upon the political theory of Sun Yat-sen that, as China is not prepared for democracy, it must pass through a period of political tutelage. Political tutelage is entrusted to the Kuomintang, the Chinese Nationalist party. Through corruption of the original intent of Dr. Sun, the party has become a mechanism whereby its members are placed and retained in office rather than as a mechanism preparing for popular participation in government.

Official position is appointive rather than elective. Nepotism and favoritism are rife. Graft and bribery are commonplace. Among officials of the lower-income brackets this is so because their salaries are inadequate to maintain a decent standard of living. Corruption among the higher officials springs largely from the Chinese tradition that graft is a perquisite of office and not necessarily dishonorable.

There is on the part of the average Kuomintang Government official a striking lack of social consciousness, of public trust and duty. This was revealed most recently by the Government’s callous attitude toward the people of Honan during the famine which occurred this spring in that province. The Kuomintang’s Central Government has, in short, done little to change the traditional attitude of the Chinese people that the Government is something to be endured rather than positively supported.

For the reasons outlined in the preceding three paragraphs it may be said that the Central Government does not have a popular base. This is in contrast to the relations reported to exist between the Communist administration and the people.

Chiang Kai-shek, as distinguished from the Kuomintang and the Central Government which he dominates, is viewed with respect and admiration as the sole national leader. He has this hold because he personifies the national will to resist Japanese invasion and because he successfully maintains the fiction that he is above politics.

The truth is, however, that he is deeply involved in politics. He maintains his paramount position in the Government in the same manner that he attained it—by political manipulation of the various factions in the Kuomintang, in the Army and among various semiautonomous provincial leaders. To this extent he rules by a system of balance of power.

By the same token he is, in a sense, a political hostage to the corrupt system which he manipulates—he cannot institute sweeping reforms without destroying the balance.

His present paramount position in the Central Government is perhaps more secure than it ever has been. But it is not so strong that at some later date he may not be challenged by a faction which may obtain control over a powerful military force.

The domestic picture thus far drawn is fairly clear-cut. It is one of contrast between and rivalry between Chiang’s Central Government and the Chinese Communists. Other factors, however, are also to be considered. One is economic deterioration, which some observers believe may culminate in collapse of the Chiang regime. Such a collapse is not beyond the realm of possibility. But what pattern it would follow is difficult to predict. The most likely pattern would seem to be disintegration into sectionalism with areas along the periphery of Japanese control going over to the enemy and other sections remote from Chungking developing a regional autonomy. Such a situation might so weaken Chiang’s position as to render him vulnerable to an attempted coup d’état.

Chiang is aware of this risk. He is combatting it by attempting to ensure the economic well-being of the Central Government and Kuomintang bureaucracy. The bureaucracy is given special rice allowances. And as economic conditions become worse, greater emphasis is laid on party discipline. If Chiang is able to maintain the present economic level of the bureaucracy and the army and if he and the Kuomintang are able to maintain party discipline, he will probably be able to preserve his position despite continued economic deterioration. The citizenry may suffer, as the Honan peasants did this spring, but that will not necessarily mean the collapse of the regime.

Another threat to the Generalissimo is the liberal and anti-Kuomintang element in Kuomintang China. This element is understood to be fairly articulate in southwest China. Chiang is also aware of this risk. He is combatting it by secret police methods; through intimidation and regimentation of the intellectuals. It is safe to say, however, that in general the liberals are now so weakened through suppression and economic distress that they constitute only a contingent threat—that is, a threat contingent upon their being able to join forces with some more powerful dissident element, military or civilian, that may arise to challenge Kuomintang control.

Basis for Conflict

Grave as the threat of economic deterioration and collapse may be, they do not involve in the overall picture as great a risk to us as does the continuing rift between the Central Government and the Chinese Communists. The basis for this rift and potential conflict is discussed in the following three paragraphs.

The Kuomintang and Chiang Kai-shek recognize that the Communists, with the popular support which they enjoy and their reputation for administrative reform and honesty, represent a challenge to the Central Government and its spoils system. The Generalissimo cannot admit the seemingly innocent demands of the Communists that their party be legalized and democratic processes be put into practice. To do so would probably mean the abdication of the Kuomintang and the provincial satraps.

The Communists, on the other hand, dare not accept the Central Government’s invitation that they disband their armies and be absorbed in the national body politic. To do so would be to invite extinction.

This impasse will probably be resolved, American and other foreign observers in Chungking agree, by an attempt by the Central Government to liquidate the Communists. This action may be expected to precipitate a civil war from which one of the two contending factions will emerge dominant.

Foreign Involvement

If Chiang and the Communists were to fight a civil war without external aid to either side there is little question that, unless it had by then been rendered impotent by the exhaustion of the prolonged war against Japan and by the centrifugal tendencies referred to above, the Central Government by sheer weight of arms would be able to crush the Communists. Such an eventuality is, however, unlikely for the reasons mentioned below.

It would only be natural that, should Chiang attack the Communists, the latter would turn for aid to their immediate neighbor, the Soviet Union. And as such an attack would probably not be launched until after the defeat of Japan, the Communists might expect with good reason to receive Russian aid.

This would be so because following the defeat of Japan Russia would no longer be threatened on its eastern borders, because the Kremlin’s present need of Chiang Kai-shek’s cooperation would have passed, because Stalin would then presumably prefer to have a friendly if not satellite Chinese Government on his flank, and because the Soviet Union would then have surplus arms in abundance for export.

A Central Government attack would therefore in all probability force the Communists into the willing arms of the Russians. The position of the political doctrinaires who have been subservient to Moscow would be strengthened by such an attack. The present trend of the Chinese Communists toward more or less democratic nationalism—confirmed in six years of fighting for the Chinese motherland—would thereby be reversed and they could be expected to retrogress to the position of a Russian satellite.

In these circumstances they would not be a weak satellite. With Russian arms, with Russian technical assistance and with the popular appeal which they have, the Chinese Communists might be expected to defeat the Central Government and eventually to take over the control of most if not all of China. It may be assumed that a Russo-Chinese bloc, with China as a subservient member of the partnership, would not be welcomed by us. The effect of such a bloc upon the rest of Asia and upon world stability would be undesirable.

Chiang Kai-shek and his Kuomintang lieutenants fully realize the risks of an attack on the Communists. This may explain the reported statements of high officials in Chungking that they must prepare not only for the coming civil war but also for the coming war with Russia. Chiang and his Central Government recognize that they cannot defeat the Communists and the Soviet Union without foreign aid. Such aid would naturally be sought from the United States and possibly Great Britain.

We are of course already supplying Lend-Lease war materials to China. All of this equipment is being channelized to the Central Government. None of it goes to the Communists. Ironically enough Russian military supplies to China, also delivered only to the Central Government, have reportedly been given to the 400,000 Central Government troops now understood to be blockading the Communist territory—and thus immobilized in the war against Japan. American Lend-Lease supplies may be expected ultimately to be used for a similar purpose.

American Lend-Lease equipment already delivered and to be delivered during the future course of the war will probably, however, not be sufficient to guarantee a Central Government victory in a civil war in which the Russians would be aligned against Chiang. In these circumstances we may anticipate that Chiang Kai-shek will exert every effort and resort to every stratagem to involve us in active support of the Central Government. We will probably be told that if fresh Amercian aid is not forthcoming all of China and eventually all of Asia will be swept by communism. It will be difficult for us to resist such appeals, especially in view of our moral commitments to continued assistance to China during the post-war period.

It is therefore not inconceivable that, should Chiang attempt to liquidate the Communists, we would find ourselves entangled not only in a civil war in China but also drawn into conflict with the Soviet Union.

Thus far we have scrupulously refrained from giving advice to the Chinese Government on this dangerous internal situation in China. The most we have done was cautiously to express concern over the Central Government’s attempts during the winter of 1940–194i to crush the “Communist” New Fourth Army. Mr. Welles reiterated this view in general terms during October 1942.⁹¹ Meanwhile Madame Chiang Kai-shek is appealing to the American people over the head of the President and the Chinese Foreign Minister is residing in Washington and frankly attempting to influence the formulation of American foreign and military policy.

Suggested American Action

We cannot afford to incur the risk of our present hands-off policy toward China. It is a policy of drifting with the course of events. We need a more positive policy, one in which we shall have a larger degree of control over the shaping of our own destiny in Asia. But before we can with assurance formulate such a policy—indeed, even before we can with any precision assess the risks confronting us in the Kuomintang-Communist rift—we must have our own official sources of information in the Communist area. The final decision on policy waits on this information.

No American civil official has visited the Chinese Communist area and no American military observer has traveled in it since 1938. We have been dependent upon unofficial travelers for our information about the Chinese Communists. While it has served to construct a consistent and probably accurate picture, it is not information which carries as much assurance as official intelligence. Certainly, if there is to be a turning on the part of the Chinese Communists toward the Soviet Union, we shall want the information of the first symptoms to come promptly and accurately. And that can be only from a skilled American political observer in Communist territory.

The Communist representative at Chungking, General Chou En-lai, has indicated on several occasions that an American political observer would be welcomed in Communist territory. The Generalissimo would probably not be sympathetic to a request for the despatch of a political observer to or the opening of a consulate general at Yenan, the Communist “capital”. He would, however, probably agree if we placed the request on the grounds of obtaining information and doing everything possible in regard to the welfare of Americans in Japanese-occupied North China and if we were insistent in our request.

Parenthetically it may here be observed that we have a stronger bargaining position with Chiang Kai-shek than we seem to be willing to acknowledge. He cannot desert us without disastrous result to himself and most of his principal supporters. We can, on the other hand, accomplish our immediate objective in Asia—the defeat of Japan—without his aid. We may have to in any case.

We need not only political information from the Communist area. We need also military information—an accurate estimate of Eighth Route Army and guerrilla strength, their present potential effectiveness against the Japanese, their future potential against the Central Government and an accurate estimate of what we ourselves may be able to do against the enemy in North China. It would therefore seem desirable to request the Central Government for permission to despatch a military observer’s mission to Communist territory.

The request could be based upon the necessity in planning operations against the enemy for a military survey of North China. It might be pointed out that North China is an area of major strategic importance in the war against Japan; that it is that part of China closest to Japan; that we now have no airfields in North China; that we wish to survey in that area possible airfield sites; that the main strength of the Japanese Army is in Manchuria and North China; that we shall therefore probably have to fight the major action against the Japanese Army in North China; that it is therefore necessary for our Army to have first-hand information regarding conditions in North China; and that we wish to plan sabotage activities in North China.

The most effective approach to the Generalissimo with regard to the despatch of political and military observers to the Communist area would be from the highest American level in Washington through the Chinese Foreign Minister. It is felt that negotiations on this subject conducted by our representatives in Chungking would not carry so much weight as if they were initiated in Washington. It is assumed, of course, that, before making any move with regard to a military observer’s mission, General Stilwell’s approval would be sought. It is likely that he would support such a proposal.

John Davies, Jr.

[Washington,] June 24, 1943.

91. See memorandum prepared in the Department of State, October 12, 1942, Foreign Relations, 1942, China, p. 248.