893.50 Recovery/11–1248

The Chinese Permanent Representative to the United Nations ( Tsiang ) to the Secretary of State 54

Dear Mr. Secretary: Under instructions from Dr. Wang Shih-chieh, the Minister of Foreign Affairs, I am transmitting to you an [Page 678] aide-mémoire, setting forth certain considerations relating to the American aid program in China and our common relations with Japan.

Dr. Wang further instructed me to say that he drafted the aide-mémoire after his talks with you55 and Mr. Hoffman in Paris.

With warm regards,

Tingfu F. Tsiang
[Enclosure]

Aide-Mémoire From the Chinese Minister for Foreign Affairs (Wang)

Considerations on the China Situation: a New Aid Program and an Agreement re Japan

The situation in China is now critical. The factors which produced this crisis are mainly three.

  • First, eight years of war against Japan followed by three years of destruction wrought by the Chinese Communist Rebellion have caused incalculable material losses and unprecedented political and social dislocation.
  • Secondly, on the surface, China seems to have been fighting a domestic rebellion, but, as the Chinese Communists are backed by an international organization and an external Power, her fight is essentially international in nature. China has a common frontier of over six thousand kilometers with a Communist Power and has among her neighbors Burma, Indo-China, Korea and Malaya where Communist strength has all been gathering momentum.
  • Thirdly, though it is now three years since Japan surrendered, there has been neither a peace settlement nor any definite agreement between the United States and China with regard to Japan. This situation has given rise to apprehensions in China, has furnished fertile ground for agitations and has rendered impossible the initiation of a positive policy of collaboration between the two countries vis-à-vis Japan.

In spite of these difficulties, the Government of China and more notably President Chiang Kai-shek have preserved, as they did during the war against Japanese aggression, their unshakable faith in their ability to put down the Chinese Communist Rebellion. The character of the Chinese people and their traditions will make it very difficult for them to accept Communism. The treatment they have received in the Communist-controlled areas is causing them actively to oppose it. After over ten years of deprivation and hardship, [Page 679] harsh criticisms on the part of the Chinese public of their Government are not unexpected; but the large majority of the masses and intellectuals desire nothing more strongly than the strengthening of their Government in the face of the national crisis. Given an adequate program of economic rehabilitation and military reenforcement, China can be made the bulwark of freedom and peace in the Far East.

In view of the above, the Government of China wishes to place the following two suggestions for the consideration of the Government of the United States of America.

1. a new china aid program

In 1948, American aid to China was given for one year only, while for Europe a four-year Recovery Plan was in principle adopted. The China Aid Program totalled four hundred million dollars, a small portion of which was allotted to possible military assistance. It is manifest that, in view of the more than a million Communist combatants and very extensive fronts involved, the sum for military aid was much too small to be effective. It is equally clear that an economic aid program of such limited size and time can not be expected to achieve the much needed rehabilitation.

Because of the critical nature of the situation and in view of the long tradition of Sino-American friendship, the Chinese Government urges that, in the formulation of a future aid program, the United States Government would place China on an equal footing with Europe.

And, to enable China to meet successfully the increasing military menace of the Chinese Communists in Manchuria and North China, it is further urged that the United States Government would provide military assistance on a much larger scale than before. While military assistance and economic aid are of equal importance and urgency, military operations will necessarily call for the greater outlay of the funds both from the Chinese Government and from American aid. The Chinese Government, being fully aware of the gigantic nature of the task involved in a complete suppression of the Communist Rebellion, has been giving consideration to a three-year campaign plan.

It is, therefore, suggested that, in continuation of the 1948 Aid Act, a new China Aid Program including the following two parts be given full consideration:

(a)
a three-year program of Economic Aid amounting annually to four hundred fifty million dollars. In the early stages of this program, the greater part of the aid will be furnished in the form of commodities, in order to help in maintaining China’s balance of international payments and the stability of prices, while in the later stages, [Page 680] emphasis will be placed on the increase of production through specific projects of development.56
(b)
a three-year program of Military Assistance amounting annually to five hundred fifty million dollars. This sum will be devoted mainly to the procurement of munitions and equipment. Assistance in technical services will be also needed.

With reference to the machinery for ensuring the efficient use of the economic aid furnished, the arrangement between the Economic Cooperation Administration and the Chinese Government should be permitted to continue in force. As regards military assistance, it is hoped that a ranking officer may be sent to China to coordinate the work similar to what the representative in China of the Economic Cooperation Administration is doing in the field of economic aid. The Chinese Government assumes that, in order to guard against possible misunderstanding on the part of the Chinese public and malicious Communist propaganda, care will be taken to avoid such stipulations as may be regarded as an infringement on China’s sovereignty or administrative integrity.57

[The remainder of the aide-mémoire dealt with “An Agreement on Common Policy re Japan”.]

  1. Handed to the Secretary of State by Dr. Tsiang on November 13; the Secretary of State was in Paris on official mission.
  2. For correspondence concerning these conversations, see pp. 192 ff., passim.
  3. Subsequently, Pei Tsu-yee, Chairman of the Chinese Technical Mission in Washington, made known to ECA the Chinese Government’s further views on economic aid. He requested adjustment of the existing program by allocating an additional $40,000,000 for cotton, cutting back procurement of other commodities and postponing reconstruction and replacement activities until next year’s program; estimated at $80,000,000 interim aid assistance for necessary commodities during the period April to June 1949; and fixed at $470,000,000 Chinese economic assistance requirements for the first year of the projected 3-year program. These views were transmitted to Mr. Lapham in telegram No. Ecato 765, December 17, 10 p.m. In telegram No. Toeca 646, December 20, Mr. Lapham stated his opposition to any major adjustment in the existing program. He did not comment on the remaining two points raised by Mr. Pei. (Telegrams filed under Shanghai Embassy Files, Lot F 84—848 ECA.)
  4. In his memorandum of December 23 to the Acting Secretary of State, John M. Allison, Deputy Director of the Office of Far Eastern Affairs, indicated that no action was taken on the Chinese aide-mémoire “since the President’s message of November 12 to Generalissimo Chiang Kai-shek represents, in effect, an answer to the Chinese request for increased aid and since the President forwarded to the Department for its archives the memorandum on Aid for China (Tab B) presented to him by Ambassador Koo on November 24”. (893.50 Recovery/11–1248) The message of November 12 is contained in telegram No. 1608, November 12, 7 p.m., to the Ambassador in China, p. 202. Tab B, not attached; it may be the memorandum of November 25 from the Chinese Ambassador, p. 212.