Foreign Relations of the United States, 1955–1957, Vietnam, Volume I

378. Memorandum of a Conversation, Blair House, Washington, May 9, 1957¹

Washington, May 9, 1957

SUBJECT

• Chinese Minority Problem²

PARTICIPANTS

• His Excellency Ngo Dinh Diem, President of the Republic of Viet-Nam
• His Excellency Tran Van Chuong, Ambassador of Viet-Nam
• His Excellency Nguyen Huu Chau, Secretary of State at the Presidency
• The Secretary of State
• The Honorable Elbridge Durbrow, American Ambassador to Viet-Nam
• The Honorable Walter S. Robertson, Assistant Secretary of State for Far Eastern Affairs
• Mr. Kenneth T. Young, Jr., Director, Office of Southeast Asian Affairs
• Mr. Thomas J. Corcoran, Officer in Charge, Viet-Nam Affairs
• Mr. Charles Sedgwick, Interpreter

Summary

• The Secretary said he would like to discuss the Vietnamese Government’s Chinese policy which we thought rather hard. Mr. Robertson said we were raising this question at the request of our Embassy in Taipei, that we were friends of both Viet-Nam and the Republic of China and that we were anxious that nothing be done to harm relations among nations of the Free World.
• President Ngo Dinh Diem insisted that his Chinese policy was no cause for concern and that recent reports of disturbances in Saigon had been greatly exaggerated. In any event the prestige of Taipei was low among overseas Chinese and if the Chinese in Viet-Nam were non-Communist it was in response to the policy of the Government of Viet-Nam and not due to anything Taipei had done.

The Secretary said he would like to discuss the Vietnamese Government’s Chinese policy which we thought rather hard. President Ngo replied that he thought his Chinese policy should not cause anxiety. Most of the Chinese in Viet-Nam wanted to comply with the legislation. However, there were certain elements in the Chinese Legation in Saigon and in Formosa who were arousing the Chinese population. They called Chinese who wished to comply with Vietnamese regulations traitors and put them in a difficult position.

President Ngo said he had just received a despatch from his government in Saigon explaining that the recent incidents were not as described in the Chinese press. The Chinese papers had confused the nationality question and the census question. First he would discuss the census question. He had started a census of foreigners because he had not known who among the population was French and who was not. That census ended two months ago. Then he started on the Chinese to find out how many of them there were. The Chinese population found this census normal and raised no objection. They went to their Legation to ask for certain certificates concerning their status. Certain ill-willed officials of the Chinese Legation delayed issuance of these certificates. The Chinese protested their loss of time. They were protesting against their own Legation. One stone was thrown breaking one window. That was all.

President Ngo said that before the French had occupied Viet-Nam all Chinese there became Vietnamese citizens as a matter of course. There was no Chinese community. However, the French levied special head taxes on the Chinese and preferred to keep them separate for this purpose. The result was the creation of a state within a state in the Vietnamese capital with the Chinese enjoying a sort of economic dominance. The Bank of Indochina, for example, had dealt largely with Chinese middlemen who practiced usury in distributing credits. A good portion of the population of Viet-Nam is of Chinese origin, including two Cabinet members. The great great grandfather of Ambassador Tran Van Chuong was Chinese, for example. This case could be multiplied by millions.

The question of assimilation is not a difficult one, since the Chinese and the Vietnamese have a common culture as well as a racial affinity. Assimilation is the basis of the Vietnamese nationality law. Vietnamese literature is Chinese with a different pronunciation.

The Secretary asked if the Chinese were required to change their names. President Ngo said no, they kept the same name with a different pronunciation. Mr. Robertson said he understood the Chinese had to take Vietnamese names. President Ngo said they kept their own names but pronounced them in Vietnamese. The name Li, for example, became Le, pronounced Lay. Nationalizing the Chinese merely followed the old rule of assimilation. Chinese born in Viet-Nam became Vietnamese citizens. The nationality decree affected only 1/6 or 1/7 of the total Chinese population since probably less than 100,000 of the approximately 600,000 Chinese in the country could be proved to have been born there. So, they will have 500,000 Chinese left.

Mr. Robertson asked how the bulk of the Chinese, the 500,000 not born in the country, would be able to make a living if they were banned from the 11 key occupations by the decree of that subject. President Ngo replied that among these Chinese there were some very rich men, millionaires, who had profited from the war and from the post-war period by accumulating French surplus goods. He was asking these rich Chinese to invest their profits in new industries. He felt that those Chinese who had no money could find employment in these new industries. As far as the eleven restricted occupations were concerned, the Vietnamese were only doing what the Filipinos and Cambodians had already done and were in fact less strict about this matter than other countries. Furthermore, this restriction applied to all foreigners and not just to Chinese. It pertained to occupations which would permit usury and speculation and to small business in the interior. But the Chinese were concentrated chiefly in Saigon and they were the principal importers who profited by U.S. aid.

Mr. Robertson asked if most of the Chinese in Viet-Nam sympathized with the Republic of China or with the Communists. President Ngo replied that they were opportunists who would follow which ever side was stronger. The Chinese in Viet-Nam were anti-Communist or non-Communist only because the GVN was anti-Communist. Viet-Nam was the only place in Southeast Asia where the Chinese population was not pro-Communist. This was not the case in Cambodia, Thailand, or Malaya. Chinese friends like Bishop Yu Pin who wanted to carry on anti-Communist movements found in Saigon the only favorable political climate for such operations. “Free Pacific”, the principal anti-Communist magazine now being distributed in other countries, was published in Saigon. President Diem suggested that Bangkok being at the “hinge” between the countries under Indian influence and the countries under Chinese influence might be a more appropriate site but its sponsors felt Bangkok was not suitable.

Mr. Robertson said we had raised the question at the request of our Embassy in Taipei, that we were friends of both Viet-Nam and the Republic of China and that we were anxious that nothing be done to harm relations among nations of the free world. We knew that the Chinese minority was a problem in every Southeast Asian country and we hoped nothing would be done to cause them to jump over on to the Communist side.

President Diem said that Taipei’s view was not very realistic and that the GRC had in fact very little influence on overseas Chinese. If the Chinese in Saigon were anti-Communist or non-Communist it was because of the policy of the GVN to which the Chinese subscribed and not to anything Taipei had done. He felt that the Foreign Minister in Taipei understood the situation better than did his Legation in Saigon. However, there was an Overseas Chinese Office in Taipei which wanted to keep these wealthy Chinese as “gravy”. Before the arrival of the present Chinese Minister in Saigon there was a Chargé d’Affaires who was motivated by ill-will. This fellow was now in Formosa and still stirring up trouble. If Viet-Nam were to go neutralist the Chinese there as in Cambodia would hang out flags for Mao Tse Tung. The GVN had learned in confidence from certain wealthy Chinese that they would like to become Vietnamese citizens but they feared the propaganda of the Chinese Legation which called them traitors. In order to comply with the regulations many of them told their wives to register as Vietnamese citizens. President Ngo had signed a great many naturalization decrees for Chinese not affected by the nationality decree. A few weeks ago 2,000 Chinese born outside Viet-Nam and not affected by the nationality decree requested naturalization. Little by little this matter will work itself out. Refugees from the north who are very resourceful will replace the Chinese in the eleven occupations gradually.

Mr. Robertson said we would advise Minister Yeh who was very uneasy about the Chinese minority problem to consult President Ngo. President Ngo said that more than 2,000 Chinese refugees had fled from the north to Free Viet-Nam after the Geneva armistice because they could not do business in the Communist Zone. He had welcomed them for humanitarian reasons although he might well have told them to go to Taipei. Indian and French businessmen had also fled south for the same reason.

The Secretary left the meeting after arranging to meet President Ngo the next day at 3:30 p.m. to continue the conversation.³

1. Source: Department of State, Central Files, 651G.93/5–957. Drafted by Corcoran.
2. The Chinese minority problem stemmed from the Diem government’s desire to reduce the control of the Chinese minority in Vietnam over the national economy and to force assimilation of overseas Chinese into the Vietnamese national culture. The Vietnamese Government promulgated decrees in August 1956 stating that henceforth and retroactively any child born in Vietnam of Chinese parents was Vietnamese and ordering all such Vietnamese citizens to take Vietnamese names and get Vietnamese identification cards. In September 1956, the Vietnamese Government outlawed participation by non-Vietnamese citizens in those middlemen trades in which the Chinese community predominated. Among the Chinese minority in South Vietnam there was little accommodation with Diem’s policies and even some civil disturbances. The Republic of China repeatedly called upon the United States to use its good offices to prevail upon the Vietnamese Government to allow the overseas Chinese to retain their national character and pursue their livelihoods. (Position Paper, NDD D–1/1a, May 7, “Chinese Minority Problem”; ibid., FE Files: Lot 60 D 514, Ngo Dinh Diem) The most concentrated body of documentation on this question is ibid., Central Files, 751G.08.

3. See Document 381.

   There was a second memorandum of conversation, also by Corcoran, May 9, on the Chinese minority question which covered similar although not identical ground. Other than Dulles, who did not participate in this second conversation, the list of participants is identical to that above. (Department of State, Central Files, 751G.08/5–957)