Executive Secretariat Files: NSC 22

Note by Rear Admiral Sidney W. Souers, Executive Secretary to the National Security Council

NSC 22

Possible Courses of Action for the U. S. With Respect to the Critical Situation in China

At the request of the Secretary of the Army the enclosed paper assessing the current critical situation in China and outlining alternative courses of action is circulated herewith to the National Security Council for discussion at its next meeting.

Sidney W. Souers
[Page 119]

Possible Courses of Action for the U. S. With Respect to the Critical Situation in China


1. To assess the critical situation in China in light of current events; and state the critical questions facing the U. S. Government with possible alternative courses of action.


2. a. The broad objectives of current U. S. policy toward China are understood to be:

Recognition of the National Government as the legal government of a sovereign China.
China should eliminate, by political agreement, conflict of armed forces within her territories as a Chinese responsibility to the United Nations in ameliorating the threat to world stability and peace.
China should undertake steps to broaden the base of the National Government to make it truly representative of the Chinese people in achieving the goal of a united and democratic China.
The U. S. Government desires to assist China as she moves toward peace, unity and genuinely democratic government.
The U. S. Government desires to assist China in the development of an effective Army and Navy, so limited in size as not to become an undue burden on the Chinese economy, and to this end maintains advisory missions. This assistance, however, will not extend to direct participation in the Chinese civil war.

b. On 9 June 1947 the Joint Chiefs of Staff expressed the following views:

“It is the opinion of the Joint Chiefs of Staff that, from the military point of view, carefully planned, selective and well-supervised assistance to the National Government, under conditions which will assure that this assistance will not be misused, will definitely contribute to United States security interests. Such assistance should facilitate the military development which appears essential for the unification and stabilization of China. It should enable China more effectively to resist Soviet expansionist efforts in the Far East and will thus contribute to the military security of the United States. In addition, it should be a stabilizing factor throughout the Far East. A firm United States position in this regard, as in the Middle East and elsewhere in the world, would serve the cause of peace as well as the other aims of the United Nations.”

c. On 31 March 1948 the Joint Chiefs of Staff reaffirmed these views in the following language:

“…78 the situation in Greece emphasizes that economic aid has little value unless and until internal conditions of law and order are [Page 120] established to the degree that the economic aid will serve the purpose for which intended … it would be unwise to extend economic aid to China without the military assistance which will provide the National Government some means with which to improve the present situation of internal armed conflict … the Joint Chiefs of Staff perceive no objection to the view that the United States assistance program in China should be regarded as subordinate to the efforts to stabilize conditions in areas of more strategic importance.”

d. Authorized U. S. aid to China from V–J day to the present, exclusive of the surplus property sales, aggregates somewhat over one billion dollars, at least half of which was in the form of military assistance. This aid in part, however, was not administered in a coordinated manner and under an integrated program designed to effect the optimum benefit for value received.

e. The … estimate of the situation places the Chinese Communists in possession of the strategic initiative. The relative tactical troop strength of the opposing forces is estimated at 1,350,000 Communists and 2,200,000 Nationalists. However, the apparent Nationalist numerical superiority is offset by the fact that more than half of the Nationalist total are currently isolated in 10 garrison areas in Manchuria, North China and Central China, and the remainder are engaged in attempting to maintain the few remaining lines of communication. The Nationalist forces, isolated in a series of garrison areas or confined in shrinking areas, have no strategic offensive capability and their defensive capabilities are decreasing. The lack of overland lines of communication has placed an increasing burden on an already limited air supply service upon which the isolated Government concentrations are totally dependent, and the local supply situation would remain critical even if adequate supplies were available in rear areas. Isolation and confinement of Nationalist concentrations has forced the Government to disperse supplies and troop strength over widely scattered areas to such an extent that the Nationalists are incapable of concentrating their efforts in a single area, and isolation of the concentrations precludes mutual support and coordinated effort. Meanwhile, the Communists are directing their energies against strategic areas, the loss of which would adversely affect the Nationalists’ limited capabilities. In a number of instances the Nationalists have shown a lack of will to resist, but defection on an alarming scale has not been noted.

f. In the political field the Generalissimo continues to be the balance of power among the various political cliques and elements striving for power in the Government. The appointment of Wong Wen-hao as Premier indicates that the real administrative power will remain with the Presidency and that the Cabinet will function ineffectually. Dr. Wong Wen-hao is the symbol of reform but he is completely powerless [Page 121] at this time when the power structure of the Government is being more closely identified with military factions, personality relationships, and loyalty factors than with progressive administrative processes. There is increasing speculation of late that certain separatist movements opposing the Generalissimo will take form in the very near future. In this regard considerable emphasis has been, attached to the activities of Marshal Li Chi-shen in Hong Kong, who was reported to have stated that he will form a provisional government in China proper imminently. It is difficult to credit Marshal Li Chi-shen with sufficient influence or capability of forming an effective provisional Government at this time. Although it is evident that, the personal position of the Generalissimo is being severely contested at this time, and that factors of potential dissidence are present in the government, it is at the same time recognized that the elements of military and financial power, which represent political power, still-remain at this time in the hands of the Generalissimo.

g. Under the provisions of the China Aid Act of 1948, China will receive aid in the amount of $400,000,000 from the United States, $275,000,000 in economic assistance and $125,000,000, presumably, for military supplies. However, there is doubt that this program will bring about any real or permanent improvement in the situation. It, may, however, serve to postpone total disintegration of the Government by improving the economic situation in the large city areas, and: provide a training and equipping program for much needed troop replacements.

h. The growing military and political power of the Chinese Communists is making a substantial contribution to the attainment of Soviet objectives in the Far East. These appear to be:

Formation of a Soviet-dominated puppet State in Manchuria;
A more circumspect, but equally positive program in China, based upon the anticipated collapse of the National Government.

i. The situation in China will continue to be serious, but in the absence of the wholesale Nationalist desertions to the Communists, and uncontrollable strikes and food riots in the cities, it is believed that the Nationalists retain sufficient capability to forestall collapse in the immediate future. This capability, however, appears to be limited to a short period of time (say 3 to 6 months) unless certain military or economic improvements can be effected:

j. In light of the existing situation, the following critical questions face the U. S. Government:

What will be the effect on the security of the United States should the present Chinese National Government collapse?
What should be the attitude of the U. S. toward forestalling; collapse of the present Chinese National Government?
What should be the attitude of the U. S. with respect to recognizing and/or aiding regional governments in China, should this transpire?

3. The following courses of action would appear to be open to the U.S.

U. S. aid might be increased to the maximum extent feasible. This course of action would undoubtedly commit the resources of the United States to an extent which could be ill afforded at present, particularly in the light of the ERP. It is also questionable, owing to the rapid deterioration of the military and economic situation, as to whether commensurate benefits would ensue.
U. S. aid might be withdrawn. Such a course of action would undoubtedly precipitate the fall of the National Government and accelerate the financial and economic deterioration now in process. This step would appear to nullify the will of the Congress which has legislated aid to China to the amount of $400,000,000 for the current year.
Continuation of U. S. aid on basis of programs now authorized. This course of action would recognize the interest of Congress in continuing the ECA aid program as well as maintain, before the world, the semblance of adhering to announced U. S. policy toward China. Such a course could not produce the favorable decision required in the short time available to the Chinese National Government; nevertheless, it would be in the nature of “buying time” until the overall world situation is clarified.
United States recognition and aid might be shifted from the National Government of China to appropriate regional regimes that may arise as a result of the collapse of the present national government. Under this course decision would have to be made as to whether to affiliate with certain separatist movements or remain aloof until such time as they might of their own accord arise out of the collapse of the present government. The process of encouraging separatist movements would be contrary to the expressed policy of the U. S.

  1. Omissions in this paragraph indicated in the original.