Policy Planning Staff Files, Lot 54D195

The Director of the Policy Planning Staff (Kennan) to the Secretary of State72

PPS 45

U. S. Policy Toward China in the Light of the Current Situation

Mr. Secretary: In response to your request for a digest of Chinese developments, there is attached a memorandum prepared by the Division of Chinese Affairs (Tab A).73

The recommendations you asked for are set forth below. They are based on three major conclusions:

1.
The disappearance of the Chinese National Government, as now constituted, is only a matter of time and nothing that we can realistically hope to do will save it (see the Policy Planning Staff’s basic paper on China, NSC 34,74 and its supplementary comments, PPS–39/175).
2.
The situation in China from now on will be in a state of extreme flux, precluding realistic detailed forward planning.
3.
Of major importance at present in the problem of our China policy [our relations with China]76 are the confusion and bewilderment in the public mind regarding our China policy. It is now less important to cover up the inadequacies of the Chinese Government than it is to regain the understanding confidence of the American public, without which we cannot effectively implement China policy.

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recommendations

1.
We should continue to recognize the National Government as now constituted.
2.
With the disappearance of the National Government as we now know it, we should make our decision regarding recognition and tactical policy in the light of circumstances at the time.
3.
We should be prepared, if advisable at the time, to request from the next Congress an appropriation for aid to China, the amount and nature to be determined in the light of the situation existing at that time, with maximum degree of flexibility for the Executive in the implementation of such an aid program.
4.
Given the desirability of urgently correcting the misapprehensions in the mind of the American public regarding our relations with China,
a.
The President should be requested to issue a public statement along the lines of Tab B.77
b.
All of the facilities of the Executive Branch of the Government should be used to get before the public, and keep before the public, a uniform and consistent presentation of the background of U. S.-Chinese relations. The Department of State should take the lead in preparing the necessary materials.78
George F. Kennan
[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.

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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

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.

  1. Penciled notation by the Secretary of State: “Read to Cabinet Nov. 26–48. GCM”.
  2. Enclosure 1 to this document.
  3. PPS 39 of September 7, p. 146.
  4. November 23, p. 208.
  5. Revision indicated in the original.
  6. Enclosure 2 to this document. Penciled notation by the Secretary of State: “Not decided” at Cabinet meeting, November 26.
  7. Penciled notation by the Secretary of State: “Decision of Pres. was that we must not be responsible for announcement that would, in effect, virtually destroy the influence of Chiang Kai Shek. Therefore, we must delay this action. GCM”.
  8. Penciled notation by the Secretary of State: “Read to Cabinet Nov. 26–48. GCM”.
  9. United States Relations With China, p. 981.
  10. Omissions throughout the document are indicated in the original.
  11. United States Relations With China, p. 983.
  12. See vol. vii, p. 141.
  13. United States Relations With China, p. 607.
  14. See telegram No. Telmar 155, November 12, 8 p.m., p. 201.
  15. See telegram No. 1608, November 12, 7 p.m., p. 202.
  16. Penciled notation by the Secretary of State: “Not read to Pres. or to Cabinet. Held for further study and consideration. GCM”.
  17. Omissions throughout the document are indicated in the original.
  18. Penciled parentheses have been placed about this sentence in the original.