U. S. Policy Toward China in the Light
of the Current Situation
The recommendations you asked for are set forth below. They are based on
three major conclusions:
[Enclosure 1]
Draft Statement Prepared in the Division of
Chinese Affairs for the Secretary of State79
The basic considerations governing our policy toward China were
clearly set forth by the President in his message to the Congress on
February 18, 194880
transmitting the proposed China aid bill. The President pointed out
the double and inter-related burden of civil war and a rapidly
deteriorating economy under which the Chinese Government and people
were laboring and the continued damage being wrought by the
Communist forces and stated:81
“… We can assist in retarding the current economic deterioration
and thus give the Chinese Government a further opportunity to
initiate the measures necessary to the establishment of more
stable economic [Page 216]
conditions. But it is, and has been, clear that only the Chinese
Government itself can undertake the vital measures necessary to
provide the framework within which efforts toward peace and true
economic recovery may be effective.
“In determining the character and dimensions of the program which
might be suited to this purpose, we have had to take into
account a number of diverse and conflicting factors, including
the other demands on our national resources at this time, the
availability of specific commodities, the dimensions and
complexities of the problems facing the Chinese Government, and
the extent to which these problems could be promptly and
effectively alleviated by foreign aid. United States assistance
to China, like that provided to any other nation, must be
adapted to its particular requirements and capacities.
“… Nothing which this country provides by way of assistance can,
even in a small measure, be a substitute for the necessary
action that can be taken only by the Chinese Government. Yet
this program can accomplish the important purpose of giving the
Chinese Government a respite from rapid economic deterioration,
during which it can move to establish more stable economic
conditions. Without this respite the ability of the Chinese
Government to establish such conditions at all would be
doubtful.”
In my statement to the House Committee on Foreign Affairs on February
20, 1948,82 I pointed
to the Communist efforts to wreck the Chinese economy and stated:
“… It should be recognized that for the main part the
solution of China’s problems is largely one for the Chinese
themselves … it is desirable that the United States
Government render assistance to China in her present
critical situation in order to help retard the present rapid
rate of economic deterioration and thus provide a breathing
space in which the Chinese Government could initiate
important steps toward more stable economic conditions.… The
United States should not by its actions be put in the
position of being charged with a direct responsibility for
the conduct of the Chinese Government and its political,
economic and military affairs.”
In connection with the general question of United States policy
toward China, the President at his press conference on March 11,
1948 made it clear that the United States did not want Communists in
the Chinese Government.83 He said that the United
States had always maintained friendly relations with the recognized
Government of China and that we had been trying to assist that
Government to maintain peace in the Far East. He further stated that
his statement of December 194584 advocating the broadening of the base of the Chinese
Government was just as good now as when it was made but that [Page 217] he did not mean the
inclusion of Chinese Communists in that Government.
The Department of State’s China aid program, presented to the
Congress on February 18, 1948, called for the financing of essential
civilian-type imports into China in the amount of $510 million and
an additional $60 million for certain reconstruction projects, a
total of $570 million. In its consideration of the China aid bill,
the House inserted in both the enabling legislation and the
appropriation act a proviso placing China in the same category as
Greece and Turkey with respect to military aid. The Senate rejected
such a proviso, and instead both the enabling and appropriation
acts, as they came from conference and were finally passed by the
Congress, called for grants of $125 million to the Chinese
Government to be used as it saw fit. The Congress thus clearly
indicated its desire to avoid commitments and responsibilities in
China which it considered it undesirable for the United States to
assume.
The Congress first reduced the period of foreign aid from 15 to 12
months, thus reducing the total aid for China from $570 million to
$463 million, and in the appropriation act the total amount was
further reduced from $463 million to $400 million. This total
provided $275 million for economic and reconstruction type aid and
$125 million for military type aid.
Under terms decided upon by the President, the Treasury Department
has disbursed, as of November 24, a total of $113,079,988.84 of the
$125 million grants to the Chinese Embassy or to U. S. Government
agencies as directed by the Chinese authorities. Shipments to China
under these grants, as of November 19, for a period from June to
November, include ammunition, aircraft and spare parts and petroleum
products and total approximately $30 million. Of the total disbursed
to date, all but about $17 million has been paid to U. S. Government
departments for procurement on behalf of the Chinese Government and
these departments, particularly the Department of the Army to which
has been turned over $68 million of these funds, are making every
effort to expedite procurement and shipment of material.
Of the $275 million appropriated for the ECA China program, $213
million has been programmed for commodities (food, fuel, cotton and
fertilizer) and the balance, $60 million, for reconstruction, for
which engineering studies are now in process. Under the commodity
program, $165 million has been committed of which approximately $100
million has arrived in China. This leaves $48 million yet to be
committed by April 3, 1949 for commodities and $113 million to be
delivered.
[Page 218]
In spite of substantial United States aid to China since V–J Day, the
military and economic position of the Chinese Government has
deteriorated seriously. Prompted by the critical situation,
President Chiang Kai-shek addressed a message to the President on
November 9, 1948,86 containing an urgent
appeal for “speedy and increased military assistance”, the
appointment of a high ranking U. S. military officer as military
adviser and the participation of U. S. military advisers in the
direction of operations. The President replied on November 12,87 stating that
everything possible was being done to expedite the procurement and
shipment to China of munitions under the China Aid Act. With respect
to the appointment of a high ranking U. S. military officer, the
difficulties of the position of a newly appointed officer were
pointed out and President Chiang’s attention was drawn to the
presence of General Barr, Director of the Joint United States
Military Advisory Group in China, who was conversant with the
current situation and whose advice had always been available. The
President expressed his full sympathy with the difficulties
confronting the Chinese Government and people and assured President
Chiang that every effort would be made to expedite the
implementation of the China aid program authorized by the Congress
with his approval.
Pertinent to consideration of the course this Government may follow
with respect to China are recent reports received from Ambassador
Stuart and United States military representatives in China. The
Ambassador has stated that the present regime has lost the
confidence of the people, reflected in the refusal of the soldiers
to fight and the refusal of the people to cooperate in economic
reforms, and that General Barr’s advice to the Generalissimo on
specific problems arising from the conduct of current military
operations has in general been ignored. In mid-October the
Ambassador stated that it was difficult to see how any efforts on
our part short of armed intervention on a very large scale could
avert further military disaster. U. S. military advisers in China
stated in October that there was just no will to fight left in the
Nationalist forces and no effective way could be found to change the
situation, the requisite leadership not being available. Recent
Nationalist military reverses have resulted largely from the lack of
will to fight and defections of Nationalist troops to the
Communists. General Barr has reported that in no case since his
arrival in China has the National Government lost a battle because
of lack of arms and ammunition. Chinese Government losses, beginning
with the fall of Tsinan in September and through the Manchurian
debacle, total 33 divisions or 323,000 men with all their equipment,
[Page 219] including large
quantities of material in depots. The Nationalist forces are
reported to have carried out virtually no destruction of equipment
prior to their surrender. Against this background of military
disaster, the Ambassador reported on November 10 that the bulk of
the Chinese people and virtually all officials are resigned to an
early Communist victory and believe that the immediate cessation of
fighting would be in the best interest of all concerned.
[Enclosure 2]
Draft Statement for President Truman88
[Washington,] November 26,
1948.
This Government is well aware that the situation in China is
extremely critical. The great problem is what could properly be done
by the United States that would be of positive assistance in the
present crisis. In my message to the Congress dated February 18,
1948, recommending consideration of a program of aid to China, I
stated:
“But it is, and has been, clear that only the Chinese
Government itself can undertake the vital measures necessary
to provide the framework within which efforts toward peace
and true economic recovery may be effective.
“In determining the character and dimensions of the program
…89 we have
had to take into account a number of diverse and conflicting
factors, including the other demands on our national
resources at this time, the availability of specific
commodities, the dimensions and complexities of the problems
facing the Chinese Government, and the extent to which these
problems could be promptly and effectively alleviated by
foreign aid. United States assistance to China, like that
provided to any other nation, must be adapted to its
particular requirements and capacities.”
Secretary Marshall, in his statement to the Committee on Foreign
Affairs of the House of Representatives on February 20, 1948,
stated:
“… The United States should not by its actions be put in the
position of being charged with a direct responsibility for
the conduct of the Chinese Government and its political,
economic and military affairs.”
China, which long resisted Japanese aggression, is now faced with the
threat of a more insidious form of imperialism exerted through
international communism. It remains the earnest wish of this
Government and of the American people to see a strong, independent
and united China with which there can be maintained relations of
mutual [Page 220] benefit and respect
traditionally existing between the two countries. The Congress has
provided funds for substantial economic and military aid to China
until April 3, 1949. We are expediting the delivery of that aid.
But it is the Chinese Government itself which must take the
responsibility for decisions to be made during this critical time,
and which must arouse the Chinese people to a determined effort in
their own behalf. Information reaching this Government does not
indicate that the present course of events in China could have been
averted or could now be substantially affected by any measure of aid
which the United States could feasibly make available.90
We shall continue to watch for opportunities to use our influence and
resources usefully and wisely to support Chinese independence. But
we must examine carefully, at every turn, how far we may go without
prejudice to our own security and to our own economic stability,
which is of vast importance to the entire world.
