893.00B/6–248
The Ambassador in China (Stuart) to the Secretary of State
[Received June 14.]
Sir: From a source which has just returned from Hong Kong and which I have every reason to believe to be reliable, I have obtained the following information:
Communist Headquarters in Hong Kong apparently controls Communist activities in Southeast Asia, including South China. The chief of the headquarters was P’an Tzu-kang, but he has been replaced by Hua Kang. This change is said to have been made because of P’an’s extremist policy in alienating other potentially friendly groups such as the Democratic League, Li Chi-shen.83 With the assumption of office by Hua Kang, there has been a more tolerant attitude evident toward these potentially friendly groups. The most significant instance of this is perhaps the readiness of the Communists, after the recent elections, to denounce both the Generalissimo84 and Li Tsung-jen,85 the latter more especially because he carried a certain measure of popular support. However, Hua Kang reversed P’an’s plan and made an attempt to approach the Vice President through Li Chi-shen. Although the two Li’s are both Kwangsi men, Li Tsung-jen is said to have made no response to this advance and that, therefore, a resumption of peace talks is now out of the question although they may be revived before long for three reasons:
- (1)
- The Communist Party could easily convene the P. C. C.86 in their “liberated areas” either in Yenan or Manchuria but they have not done so;
- (2)
- They could assemble their own National Assembly and declare the autonomy of Manchuria or other regions, but again they have refrained;
- (3)
- The Russians in Manchuria have offered their assistance to the Chinese Communists in matters like ammunition in order to help them occupy Chinchow, but the Communists have not gone further than to accept 35 military advisers and some pieces of artillery.
The Communist Party regards international developments as the guide to events in China as follows:
- (1)
- If Soviet-American relations should improve, this would at once be followed by better relations between the Communists and the Kuomintang in China;
- (2)
- Should the present tension lead to war between the United States and the Soviet Union, there would be a consequent intensification of the civil conflict in China;
- (3)
- If again the tension between the United States and the Soviet Union continues unrelieved, this will be reflected in a similar inconclusive drifting in China.
The Soviet advice to China is said to be to set up three satellite states in the Northeast, Northwest and North, respectively, but not to do so at this time for fear of arousing Chinese nationalistic sentiment and increased American aid.
Respectfully yours,
Minister-Counselor of Embassy