Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

793.02/1–550: Telegram

The Consul General at Shanghai ( McConaughy ) to the Secretary of State

secret

Shanghai , January 5, 1950—5 p. m.

99. Department Pass Tokyo 5, Repeated Taipei 30, Peiping 24.

National Security Council statement broadcast over VOA January 2 re aid to Nationalist Government in Formosa case¹ was great relief to Shanghai Americans who had become mystified and jittery over past week’s deluge of distorted “news” from Washington (e.g. Contels 14, January 3 and 46, January 4)² and statements by prominent individual Americans seeming to constitute evidence of official government policy decision for all-out military aid to maintain Nationalist control of Taiwan.

Connally’s December 29 statement³ as first reported (re US recognition to depend on Chinese Communists observance International Law and accordance protection foreign nationals) was of nature to have produced excellent American and Chinese (other than extreme pro-Moscow) reaction. Such potential effects were immediately nullified however, by Connally’s subsequently reported observations re possible military mission to Taiwan and preference Japanese to Communist rule; and, with various ensuing reports, local reaction has grown worse and worse.

Local press, ignoring National Security Council’s statement, still continues play up recent sensational “news re American aid KMT Taiwan”, including references to 250 tanks, 16 warships and large new credits being “given to KMT”. Aside from press clangor, matter is creating furor alarm disappointment in liberal and moderate Chinese circles friendly to US. Officer of Consulate General who dined last night with 3 close Chinese friends, local Democratic League leaders Han Ming, Peng Wen-ying and Chu Kao-yung, was subjected to barrage of anxious questioning by all 3, who declared that question of Taiwan and US China policy has now become the major worry of great body of Chinese who support new regime and seek friendly relations with America. Han, who has press connections, stated that all yesterday he was besieged with telephone inquiries as to significance of press stories from his Tsinghua College club friends and others who have such trust in America that they would normally discount any newspaper allegations. Peng remarked earnestly that: “If America keeps Taiwan from new regime, it will lose all China itself in terms of goodwill of Chinese people”. Exaggeration, but not without some basis.

Our size-up of Chinese Communist aspect of Formosan question as seen by many observers here is about as follows:

Dramatic crescendo of publicity and preparations demonstrating new regime’s irrevocable determination to “liberate” Taiwan has been a major feature of this political scene recent months. With each easy mainland conquest by PLA narrowing down remaining field toward Taiwan, Gimo’s⁴ last lair, build-up of confident expectations, publicized commitments, economic pressures and stage-setting operations for its “certain conquest” has increased in scale and tempo.

By late summer press was already alive with talk re need winning island. Painful punishment inflicted on new regime by blockade and airraiding staged from Taiwan and Chusan Isles, together with injured pride frustration over delays setbacks in taking them by army which could in all other respects convince nation of its invincibility, gave violent stimulus to already firm decision that Gimo’s Formosan base must be liquidated. Propaganda potentialities of each rumor of American aid to that base, adroitly interwoven with “proofs” of America’s will to favor and rearm Japan (an equally explosive subject for quick-rousing popular ire), were fully exploited—hereby greatly assisting Chinese Communist propaganda drive to put across “lean to Russia” policy and at the same time helping further to make, of Chinese Communists Taiwan liberation commitment, even more of tiger from which could be no dismounting or retreat.

By end September build-up had reached point where official Chieh Fang Jih Pao on one day (29 December) carried 3 separate news items on urgency taking Taiwan (circular to troops exhorting them prepare for task, and speeding up of Taiwan liberation specialized training for “certain” PLA units, including Taiwanese Youth Corps). Conquest of Fukien and South China further increased heat of Taiwan-ward pressure and propaganda; and collapse of Nationalists final Szechuan and Yunan holds (together, possibly, with international considerations such as Russian, UN and recognition factors) have brought project to fever pitch.

Up to November signs suggested that Chinese Communists, fearing effect it might have on their recognition and UN prospects and perhaps hoping for possible early peaceful turnover, disfavored getting material Soviet help for difficult amphibious operations required for forcibly taking Taiwan and intervening Tinghai. Passing of time, however, and successive costly failures of expeditions recently launched on Tinghai have brought their loss “face”, their grim determination and their anxiety over magnitude task to point where use Russian aid seems more likely. Rumors of such actual and possibly impending Soviet help (intensified by Mao’s Moscow visit)⁵ have grown rapidly and appears fairly certain that at least some Soviet military or naval technicians have been for several weeks assisting in Ningpo Staging Area. Recognition by British and other West European nations might make Chinese Communists less apprehensive re using Russian help. In any case it seems clear that the longer Chinese Communists are stumped by obstacles preventing their taking Taiwan by storm and/or internal subversion, the more they are likely accept Soviet military help—and, with such help, a strong spearhead of Soviet influence in Taiwan which might not otherwise readily develop (especially if expedition leadership designation continues to rest on Chen Yi,⁶ whose believed antipathy to Moscow control has been reported in Contel 26, January 3).⁷ It is, indeed, possible that, if substantial Russian aid has to be accepted because of firm maintenance KMT resistive power, reported Russian suspicions of Chen may force his replacement by more amenable general or at any rate his closer surveillance by pro-Soviet commissars.

While Department doubtless has fuller information, Consulate General’s information at least sufficient to indicate clearly that effort and expenditure have gone and will go into Chinese Communists “Operation Taiwan” (including preliminary Tinghai phase) on scale which for Communists must be relatively as great as invasion North Africa was for Western Allies. Fleets are being built and assembled, oil stocked, armies trained, soldiers taught to swim, etc. Large proportions of nation’s budget and army specifically allocated to project. Chen Yi has been explicitly designated leader to fulfill mission, importance of which was revealed by fact that Chen’s first act on returning here from Peiping was inspection of Ningpo Staging Area. There is good reason believe that equal thought and effort have gone into Chinese Communists underground program aiming to win Taiwan through popular uprising and buying off of KMT armed forces (a task which, if adequately financed, might well prove much easier and cheaper than military expedition). Within recent weeks virtually every important Chinese Communist pronouncement has declared, with increasing stress and irrevocable commitment tone, the necessity and certainty of taking island. Liberation Taiwan has, in fact, been publicly announced as nation’s paramount immediate mission on which PLA’s and new regime’s reputation and entire resources, are staked. Completeness of commitment to undertaking well illustrated by fact that few days ago officer of Consulate General, while walking through small village near Shanghai, came upon rural wine-assisted celebration by mixed farmers soldiers which centered around display of paper battleship labelled “Liberator of Taiwan”.

In short, there would seem no avenue left for Communist retreat. Either they gain Taiwan; or, goaded by bitter humiliation and by Kremlin propaganda, they must keep it ever before Chinese people as China’s great Irredentist issue and perpetual cause for anti-American vehemence. Well to remember that Taiwan Irredentism is not Communist monopoly but popular Chinese national issue; and that during KMT period as now slightest rumors of designs to admit American or returning Japanese influence in Taiwan brought chauvinistic outbursts in press and student circles (which were most convenient to Soviet intriguing in Manchuria and Sinkiang). Any talk that KMT is holding Taiwan for a new Chinese regime which it will re-impose over mainland would find no popular response here, as great bulk of Chinese population, however they may dislike Communists, have not slightest expectation or desire of “old gang” being able to return and rule.

Against this background, it appears to most observers here, including ourselves, that every seeming indication (however false) of American intention to underwrite Nationalist Government’s hold of Taiwan or to return island to Japan plays directly into hands of Moscow dictated propaganda. Great majority of Chinese (including at least important minority of Chinese Communists) have strong sentiment against being tied exclusively to Russia in peace and even stronger opposition to being tied to her as ally in war against US. Potentialities of our exploiting these feelings very great. (Contels 4782, November 14, 5250, December 16, and 5308, December 19).⁸ Most local observers feel that they could be best exploited by appropriately timed recognition, which would establish trade and other contacts whereby prestige of American technical excellence and some slight influence on Chinese thought might be maintained, and that in any case they can certainly not be exploited in the face of statements from Washington suggesting that US intends maintain Nationalist Government on Taiwan or give island to Japan. Such statements, in lieu of helping along tide of anti-Russian feeling, are clearly of character to slow such tide and to increase extent to which Russia would be able to dominate and use Chinese (including collaboration on Taiwan) in peace or war.⁹

With skillful handling, Peiping’s alliance with USSR might be reduced to dubious asset if not actual liability for Soviets; but such objective can hardly be achieved against talk of American aid to Gimo. Difficult for Americans here to understand how strategic value of Taiwan could be so great as to outweigh long term gains to be derived from exploitation of Chinese good will toward US and rising anti-Soviet sentiment, which at very least could greatly lessen China’s peace or war value to Russia, and which at best might convert China to Titoism frankly open to American advances.

Even official statements such as that of National Security Council, revealing extent of modest economic or technical aid which American Government considers continuing to give Nationalist Government are hard enough to explain to local communities which admittedly see things in narrow localized perspective. Reaction of Chinese circles and American community to recent stream of false reports as to American Government policy (twisted versions of official releases, statements by prominent individuals, rumors, fabrications, attributions of official status to Chennault¹⁰ actions, etc.) can accordingly well be imagined. Unfortunately, Americans as well Chinese and Europeans are quick to seize on such “evidence”.

(Illustrative of prevailing mood of jittery apprehensiveness and ease with which credence given to most unlikely tales is recent rumor that FBI investigating missionaries who chose remain in China, which was based on statement made in jest at American Association meeting by person recently returned from US who jokingly queried whether missionaries were afraid to send in petitions to State Department recommending recognition because of possibilities FBI investigation).

We, of course, do not venture contention that dangers of helping Nationalist Government in Formosa should necessarily prevail in Government’s determination of American policy against opposing considerations of which Consulate General lacks background for adequate appreciation, though we feel it duty to report, as we have attempted above, our estimate of such dangers for due consideration. We do, however, voice hope that Department will keep in mind the desirability of issuance official policy statements such as that of National Security Council whenever their need is indicated by spate of sensational distorted news such as that under reference.

Bequest Polad pass Jessup¹¹ (Chase/Van Oss).¹²

McConaughy

1. See footnote 3 to the memorandum of conversation by Mr. Rusk. January 2, p. 257.
2. Neither printed.
3. See the New York Times, December 30, 1949. Senator Tom Connally was Chairman of the Senate Foreign Relations Committee.
4. Generalissimo Chiang Kai-shek, former President of the Republic of China, who had retired on January 21, 1949.
5. Mao Tse-tung, Chairman of the Central People’s Government Council of the People’s Republic of China and Chairman of the Central Committee of the Communist Party of China, had gone to Moscow in December 1949 for discussions which led to the signing of the Sino-Soviet Treaty of February 14, 1950. For related documentation, see Foreign Relations, 1949, vol. ix, pp. 229 ff., and post, pp. 294 ff.
6. General Chen Yi was Mayor of Shanghai and Commander of the Third Field Army of the People’s Liberation Army, People’s Republic of China.
7. Not printed; for a summary, see telegram 6, January 5, to Peiping, infra.
8. Telegram 5308, December 19, not printed; texts of the other two messages are scheduled for publication in Foreign Relations, 1949, volume viii .

9. In telegram 98, January 6, from Shanghai, not printed, the Consulate General expressed the view that the great majority of the American business and missionary communities in Shanghai were “thinking along lines that recognition [of the People’s Republic of China] should and must come.” (793.02/1–650)

   In his telegram 6, January 1, from Moscow, not printed, Ambassador Kirk had offered the following comments regarding telegram 2350, December 24, from Peiping (text ibid., vol. ix, p. 243) wherein the Consul General (Clubb) recommended recognition of the Government of the People’s Republic of China:

   “In summation, I consider:

   (A) Our long range interests best served by recognizing fait accompli in China which means recognition Communist Government there;

   (B) Concerted action between UK and US highly advisable;

   (C) Time element of importance because postponement favors Kremlin;

   (D) Formosa situation unreal and distracting attention from major objectives.” (793.02/1–150)

10. Maj. Gen. Claire Lee Chennault (ret.), former commander of the Flying Tigers and director of Civil Air Transport, Inc., was a strong advocate of aid to the Republic of China.
11. See footnote 1 to the memorandum of conversation by Ambassador Jessup, January 16, p. 278.

12. Augustus Sabin Chase, Consul at Shanghai, and Hendrik van Oss, Vice Consul at Shanghai.

    On February 9, the Department sent the following reply in telegram 218 to Shanghai:

    “Dept wishes commend Chase and Van Oss for thoughtful analysis contained urtel 99 Jan 5, which has been read with considerable interest.

    “Dept has also followed with gratification efforts of ConGen McConaughy to acquaint Shanghai Amer community with background and some probable consequences of recent decisions US Govt close offices China.” (793.02/1–550)