Foreign Relations of the United States, 1948, The Far East: China, Volume VII

893.00/10–2248: Telegram

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

Nanking, October 22, 1948—3 p. m.
[Received October 22—7:42 a. m.]

1971. China situation, as portrayed Embtel 1920, October 15,⁸² and Embtel 1922, October 16, requires, in our opinion, reappraisal of our China policy. We assume that our purposes in Far East continue best to be served by existence of political stability in China under friendly government. Trend is now in opposite direction and we must seek means to alter it. Inaction would not be in our interests.

Present regime has lost confidence of people. This is reflected in refusal of soldiers to fight and in refusal of people to cooperate in economic reforms. Government leaders are befuddled and need guidance if situation is to be saved. Accordingly, we recommend that:

We continue to support present regime to the utmost feasible in light of our commitments elsewhere and of our total resources. This would require the concentration of our military and economic aid in all-out effort to assist the Government in containing Communist armed forces within their present military boundaries. Present measures and those now planned are insufficient for the task. More bold and more imaginative measures are needed. If suggested course of action is followed, possibly a restatement of our China policy by the President or Secretary of State is needed. It might be well publicly to make known our position on coalition governments in general which include Communist participation, and particularly the effect of the emergence of such governments on our ECA program, We would certainly have to go to the Generalissimo, point out the desperate situation and endeavor to impress upon him the need for drastic action, including removal of incompetents.

In addition, we should:

(a) Make strenuous efforts to find some way to reinstill into the Chinese Nationalist soldier the will to fight. This might be done by materially increasing staff of CO, JUSMAG⁸³ and giving him complete authority to extend advice of his group as far down the Chinese military command as possible after prior agreement of Generalissimo that acceptance and implementation JUSMAG advice on all military questions, including personnel, will be price of stepped-up American aid in military and other fields;

(b) Rush shipment of arms and ammunition already requisitioned and any other than can be located and made available in US bottoms, including Navy vessels or by any other expeditious means, to China ports with as little delay as possible;

(c) Telescope entire commodity portion of China Aid Program into shipments within next few months even at expense of ECA shipments to other parts of world in less critical position (Embtel 1748, September 22, and Deptel 1433, October 12⁸⁴);

(d) Endeavor in meantime to deter those seeking coalition by announcing, as suggested above, that US Government would most certainly have to review in its entirety the Aid to China Program in the event of coalition in China including Communist participation. At the same time, we should be authorized informally and confidentially to state in conversations with political leaders, including Marshal Li Chi-sen, and with Government officials that they should be under no illusions that the US Government and the US tax payers would be willing to continue economic assistance to a Communist-dominated coalition government in China or elsewhere. At the same time, we could point out the historical dangers of coalition government with Communist participation. All important coastal cities, and to lesser extent their tributary territories, are heavily dependent for their economic life on ECA imports for total or marginal quantities of petroleum products, cotton, rice, flour and fertilizers. By our ability to continue or stop this Aid Program, we possess a politico-economic lever of key importance. Not only could this import program be denied an unfriendly government, but the threat of its discontinuance might conceivably defer, if not prevent, the formation of a Communist-dominated coalition government in Nanking.

Such action might also conceivably restore some measure of will to resist among those who desperately do not want to become Communists, but who see no alternative. It would, of course, involve refusal to recognize any puppet or so-called coalition government which might be set up in North China or Manchuria by the Communists, and would require that we continue to support the Nationalist Government even though in following a policy of “giving space for time” it were driven from its seat in Nanking with all the loss of prestige which such a move would entail.

Such a course of action, even with only reasonable prospects of success, would appear to be that which is in the best interests of the US. Nevertheless, given our commitments elsewhere, and given the limits of our national resources, Department may well feel that our recommended course of action is impossible. Also, our military advisers feel that the Nationalist military establishment has very likely already suffered too great losses in manpower, matériel and morale to make any such effort successful. There is just no will to fight left in Nationalist forces and we can find no effective way to change the situation. A moral resurgence of Chinese will to resist Communist aggression is required and the requisite leadership just is not available. Unhappily, informed Chinese in all walks of life are bending their every effort to save their families, not their country.

Nevertheless, we feel the effort should be made as the only alternative we see is a Communist-dominated coalition. Such a coalition would confront us with the necessity of recognizing that government and making the best of it or getting out of China. The dead hand of Kmt leadership has hitherto stultified our efforts and we see no prospect of removing that leadership by peaceful means other than coalition. Such coalition could come to power possibly through retirement of Generalissimo after censure by Control or Legislative Yuan or on advice of elder statesmen and his replacement by Vice President Li Tsung-jen who could negotiate the settlement with Communists. The coalition government we envisage will likely have a pseudo-democratic façade. When we speak of coalition, we do not mean coalition in the sense of coalition as it might have been developed under the PPC [PCC?] agreements in 1946.⁸⁵ It is too late for that type of coalition. The disappearance of the Generalissimo from the scene is a necessary prerequisite to the coalition envisaged and which will likely consist of Chinese Communists, KmtRC, certain residual fragments of Kmt, and prominent individuals of no significant political following whose influence is largely personal. The aim of the Communists would be the communization of China. The aim of those associating with them would be to prevent just that.

Should such a coalition develop, we should announce our decision to review in its entirety the Aid to China Program if we had not already done so, suspend all shipments, and then sit back and watch events until the situation clarified. It might later develop that by the wise use of the power given us by China’s economic needs, we could exert some influence on the pattern of events. We might make the granting of economic aid contingent upon performance of political acts and adherence to policies specified by us. If the new government were so organized that considerable degree of autonomy accrued to provincial administrations, we should endeavor to favor those autonomous areas remaining relatively free from Communistic influence, and there might, in fact, be small ways in which we could influence events.

The difficulties inherent in this situation are apparent. Non-Communist leaders have hitherto shown little marked capacity for that type of political activity which is necessary to create successful movement countering Communists. However, freed from dead hand of present government leadership and preoccupation with military matters, they might conceivably form some kind of effective resistance.

Staying in Nanking would not necessarily involve condonation of the Communist-dominated coalition government. It would involve recognition of it as a matter of practical politics, but we maintain diplomatic relations with other governments we dislike. It would mean unpalatable situation imposed on us by events in the absence of our capacity to execute the policy we recommend.

If there are other alternatives which suggests themselves to the Department, we would appreciate instructions for our guidance.

Stuart

82. See vol. viii , “Financial Relations”.
83. Commanding officer, Joint U. S. Military Advisory Group in China.
84. Both telegrams are printed in vol. viii , “Financial Relations”.
85. See Department of State, United States Relations With China (Washington, Government Printing Office, 1949), pp. 610–621.