693.0023/2–747: Telegram

The Ambassador in China (Stuart) to the Secretary of State

222. In handing note regarding Dairen to Minister-Counselor (Embtel 196, Feb. 4, 10 a.m.), Vice Minister referred to “de facto obstacles” delaying opening Port and observed that even in period immediately following signing of Sino-Soviet treaty it was impossible for Chinese Govt to arrange transportation of its forces to Manchuria via Dairen. Vice Minister did not appear hopeful with regard to implementation of agreement concerning Dairen and pointed out that local negotiations between Chinese and Soviet Military Commanders in Manchuria (Embtel 2050, Dec. 623) had achieved no result.

It will be recalled that during period of Soviet occupation of Manchuria, Chinese Communist forces there enjoyed the benevolence of Soviet forces with an effective degree of freedom of movement and activity within the sphere of Soviet control whereas Central Govt [Page 491] troops prior to Russian withdrawal were prevented from actively reestablishing Chinese sovereignty, and that Soviet withdrawal schedules were so timed as to bring about the solid establishment of Chinese Communist forces in north-eastern provinces plentifully supplied with Japanese arms and equipment “abandoned” by Soviet forces as their withdrawal progressed.

Foregoing, taken in conjunction with systematized Soviet looting of equipment from the only important industrial base in China and Soviet denial of the use of the Port of Dairen which made it necessary for Central Govt to operate at the end of a long, tenuous, and inadequate rail line of communication, had effect of stalling Central Govt political control, making impossible any economic rehabilitation, and compounding existing chaos.

It is misleading to give undue consideration to so-called “correct” Soviet attitude toward events in Manchuria when there has existed over a period of months at least covert Soviet exploitation of a variety of circumstances which tend to enhance Soviet domination of overall scene without the necessity for overt action on their part. These circumstances include (1) existence of a numerically important and militant Chinese Communist movement which, significantly, was not important in Manchuria prior to defeat of Japan (Embdesp 1166, Feb. 28, 194624); (2) a strong autochthonous regionalism among the Manchurian Chinese; (3) deeply rooted distrust of Central Govt among Mongols of western Manchuria; and (4) Russia’s normal geographic position vis-à-vis Manchuria, now strengthened by Soviet occupation of northern Korea, the existence of Mongolian Peoples Republic and Soviet control of Port of Dairen.

In face of such circumstances, even a strong Chinese Govt, administratively capable and honest, and representing a unified nation, would have found difficult the task of re-establishing itself in an area from which it had been absent for 14 years and which had enjoyed at least 10 years of economic prosperity under Japanese domination. Aside from the heavy burden of its own administrative corruption and ineptitude and the impoverishment of supply and transportation facilities, the Central Govt also had to contend with a Soviet attitude which, regardless of Soviet intent, resulted in serious obstruction to the assertion of Central Govt authority.

Because of their negative nature, it is difficult, if not impossible, to call into question the attitude and actions of the Soviet Union vis-à-vis Manchuria. Having played, however, an outstanding, though covert, role in creating conditions which would make difficult the task of the Central Govt, the Soviet Union is assuring the continuation of conditions which will bring into disrepute the Central Govt by making impossible any degree of economic rehabilitation.

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Unless and until the Central Govt has access to Port of Dairen, discussion of economic recovery and political stability for Manchuria will be commercial [chimerical].

It seems probable (Embtel 60, Jan. 11) that Soviet policy toward Manchuria is aimed in part at tieing Manchurian economy in so far as possible to that of Siberia east of Lake Baikal. Normally Port of Dairen handled well in excess of 70 percent of total trade of Manchuria. While it is unlikely that this predominant position can be completely eliminated, it is possible that new channels of trade funneling through Soviet territory will develop if the paralysis of Dairen is allowed to continue indefinitely. Meanwhile the consolidation of Soviet influence at Dairen continues pace (Dairen despatch No. 48 to Dept, Jan. 11, 1947),25 probably in preparation for time when it may be necessary nominally to surrender control to a Chinese administration.

If previous Soviet course with regard to Manchuria can be described as either covert or negative, the long continued occupation and closure of the Port of Dairen, on flimsy pretext that a technical state of war still exists with Japan, can only be interpreted as the deliberately arbitrary maintenance for political reasons of an unnecessary obstacle to any economic recovery for Manchuria as a whole or, more immediately, for limited enclave now held by Central Govt.

Central Govt will probably be unable to influence the Soviet Union to modify any position it chooses to adopt with regard to Manchuria. Consequently, it would seem incumbent upon us in our own interests to prevent the Soviet Union from exploiting a position in Manchuria, stemming from the Yalta Agreement,26 to the disadvantage not only of China, but of the US as a trading nation as well. Embassy believes that continued occupation and control of Dairen by Russians constitutes a stranglehold upon economy of Manchuria which can be expected to become more rather than less stringent in the immediate future and recommends that the Dept give consideration to steps which may be taken to effect a change in this undesirable situation.