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

893.00/2–548

The Consul at Canton (Burke) to the Ambassador in China (Stuart)³²

No. 5

Canton, February 5, 1948.

Sir: I have the honor to report that on January 31, 1948, Attaché (Research Analyst) Joseph A. Yager of this office called on Marshal Li Chi-shen and General Tsai T’ing-kai and obtained certain expressions of opinion that may be of interest to the Embassy and to the Department.

Both interviews were arranged by Mr. Sa K’ung-liao (see biographical notes³³) of the left-wing Hua Shiang Pao. Mr. Sa also acted as interpreter at both interviews, a possibly unfortunate circumstance in view of his rumored membership in the Chinese Communist Party. It is interesting to note that Mr. Tseng Yu-hao (see biographical notes), an anti-Communist member of the Democratic League, felt compelled to warn Mr. Yager that Mr. Sa cannot be trusted as an interpreter on matters affecting the CCP.

The call on Marshal Li was made at the Marshal’s home on the Peak in Hong Kong. The Marshal and a number of his relatives occupy one of three flats in a somewhat run-down building that he reportedly owns. His own quarters are comfortably, but rather drably, furnished. The general impression obtained by a visitor is neither one of extreme poverty nor extreme affluence. The Marshal himself presented a distinctly unmilitary appearance in a Chinese robe and skullcap. His manner was quiet, and cordial, but slightly reserved. While apparently willing to discuss political problems, he weighed his answers carefully and did not volunteer information on his own plans or on his opinion of other leading Chinese personalities.

Since Mr. Yager had been introduced as an economist interested in South China, Marshal Li was first asked for his views on the economic program of Governor T. V. Soong of Kwangtung. The Marshal replied that whether or not Soong is a good man is immaterial. Since Soong operates within the context of national policies that are doomed to fail, anything projected by Soong on the provincial level is also doomed to fail.

This statement lead naturally into a discussion of the future of the present National Government of China. In the course of this discussion, Marshal Li made six major points:

1. If the National Government continues its present military and economic policies, it will be defeated.

2. Although Nanking authorities have passed up many opportunities to end the civil war, the possibility of achieving a negotiated peace still exists.

3. The end of the civil war, whether by a negotiated peace or by the defeat of the National Government, will see a coalition government over all of China. The war definitely will not end in the division of China into separate regional regimes.

4. The nature of the coalition government that will eventually control all of China depends upon the course and duration of the war. If Chiang Kai-shek fights until his forces are totally defeated, the Communists will naturally be more powerful in the coalition government than would be the case if a negotiated peace were made in the near future. But under no circumstances will the Communists be able to govern China alone.

5. Some of the military leaders of the Nationalist forces will support a negotiated peace before military collapse occurs. (By implication, therefore, the Communists need not be the dominant group in the anticipated coalition government).

6. Although he does not know the inner workings of the Chinese Communist Party, he does not believe that that party is dominated by the USSR.

As the interview was drawing to a close, Marshal Li stated that he had something further to say. In his opinion, American aid to “the reactionary Nanking regime” has been most unfortunate. Postwar events in China might have proceeded much more satisfactorily if the United States had not violated “the non-intervention agreement” concluded at Moscow in 1945 by the United States, the USSR, and the United Kingdom.³⁴ Under present world conditions, the key to a settlement in China is a general settlement between the United States and the USSR.

General Tsai occupies a house near that of Marshal Li. Tsai’s house is the larger of the two, and, on the basis of its external appearance, Tsai appears to enjoy a somewhat higher standard of living than does Li. The interview with Tsai, however, was not held in his home, but in the offices of his son who is said to be in the import-export business. General Tsai was in Western-style civilian dress, but has am unmistakably military bearing. His manner during the interview was cordial, but blunt. After east [each?] statement, he adopted a stiff-backed, straight-faced position, as if to say, “I am laying it on the line. You can either take it or leave it.”

In contrast with the largely passive attitude of Marshal Li, General Tsai maintained the initiative throughout the interview. Without prompting, he proceeded directly to what he conceives to be the basic defect in American policy toward China: fear of the Chinese Communist Party and lack of confidence in the strength of China’s “democratic elements.” This defect in American policy arises, in his opinion, from an incorrect analysis of the present situation in China. Tsai’s own analysis runs as follows:

1. After the Nationalist armies are defeated in the North, Nationalist military strength will be concentrated south of the Yangtze. Nationalist military leaders who have been kept apart by the Generalissimo will then inevitably be close enough together to consult one another and to act in concert. Some of those leaders, moreover, will once more be in their home territory.

2. Once the civil war moves to South China, certain important Nationalist generals can be expected to oppose continuance of hostilities and to join with the Chinese Communist Party in the formation of a coalition government. General Tsai states that he knows these generals very well and understands their point of view. If necessary, he is prepared to go to them at the appropriate time and initiate steps to form a coalition government.

3. The coalition government to be formed at the end of the civil war will not necessarily be anti-American and will in any case be a temporary caretaker government to be followed by another government elected by the people.

4. American aid to Chiang Kai-shek is therefore ill-advised. Chiang and the CC Clique must go before a coalition government can be formed and the war ended. If the United States government understood the potential strength of the “democratic elements” in China (i. e., through the eventual defection of Nationalist military leaders), it would not support Chiang.

In subsequent conversation, General Tsai concurred in Marshal Li’s judgment that the civil war will not end in the division of China into separate regional regimes. Tsai also expressed the opinion that T. V. Soong has little chance of succeeding in the pacification and development of Kwangtung. He volunteered the statement that Soong had recently come to Hong Kong and asked him to join the provincial government at Canton. Tsai claims that, although he and Soong are friends, he refused to come to Canton, unless Soong first renounced his allegiance to Nanking and the policies of Nanking. Soong said that Tsai’s conditions were impossible and, according to Tsai, there the matter rests.^*

As in the interview with Marshal Li, General Tsai was asked if he believed the Chinese Communist Party to be free from domination by the USSR and therefore qualified to enter in good faith into a Chinese coalition government. In contrast with the apparently frank reply of Marshal Li, General Tsai answered evasively and said that the possible Soviet connections of the Chinese Communist Party were irrelevant, since the Chinese people will (at some unspecified future time) be able to elect the kind of government that they want. This rather unsatisfactory reply may have reflected a lack of confidence in Mr. Sa, the interpreter. On the other hand, it is just possible that Tsai was indicating somewhat obliquely his confidence that the Communists could eventually be reduced in strength, once they had been drawn into a coalition government.

Respectfully yours,

Gordon L. Burke

32. Copy transmitted to the Department by the Consul without covering despatch; received June 7.
33. Enclosures not printed.
34. For a report of the meeting of the Ministers for Foreign Affairs of the Soviet Union, the United States, and the United Kingdom, December 27, 1945, see Foreign Relations, 1945, vol. ii, p. 815. For documentation on the meeting, see ibid., pp. 560 ff.
35. Tsai’s version of his relations with Soong should be compared with Soong’s statement to Consul Elmer Newton of this office on October 24, 1947. At that time, Soong claimed that he could induce Tsai to come to Canton and join his government whenever he (Soong) wanted to. Soong’s call on Tsai is believed to have occurred in early December, 1947. [Footnote in the original; memorandum by Consul Newton, October 31, enclosed in unnumbered despatch of November 8, 1947 from the Consul General at Canton (Boucher) to the Ambassador in China, not printed.]