88. National Intelligence Estimate1

NIE 43–55


The Problem

To estimate probable short-term developments with respect to the strength, stability, effectiveness, and policies of the Chinese Nationalist Government.


US policy towards Taiwan remains substantially unchanged.
The Communists do not undertake overt military aggression in the Far East.


A return to the mainland and the preservation of its identity as the legal government of China will continue to be the central objectives of the National Government of the Republic of China and the foci of its foreign policy. The present Nationalist leadership almost certainly will not agree to the creation of “two Chinas” and will resist moves to stabilize the Taiwan Strait situation as a trend in this direction. (Paras. 12–15)
Despite slow deterioration in the international position of the National Government due largely to wider international acceptance of Communist China, the internal political situation remains stable, [Page 154] relatively high living standards have been maintained and there has been some improvement in military capabilities. Morale has declined only slightly, and the prospects for maintaining domestic stability over the next two or three years appear good. (Paras. 16, 19–53)
Over the longer run, Nationalist China’s international position and prospects will probably continue to deteriorate. With the passage of time and in a period of reduced tensions, the “return” theme would be increasingly recognized as unrealistic. Nevertheless, the National Government would find it extremely difficult to accept the idea that the Chinese on Taiwan must resign themselves to an insular existence. However, unless they can make this psychological adjustment and give higher priorities to domestic problems, Chiang or his eventual successor may not be able to sustain unity and morale or to maintain the economy. In any event, the survival and future fortunes of the National Government will continue to be determined in large measure by US policy, and will depend increasingly upon the scale and character of US aid and support. (Para. 18)
Despite the gradual increases that have taken place in the combat capabilities of Nationalist ground, naval, and air forces over the past several years, these capabilities are still far outweighed by those of Communist China. Even if Nationalist military capabilities are substantially improved, outside logistic, air, and naval support will continue to be required to defend Taiwan or the Penghus against Communist invasion. Nationalist strength will continue inadequate to defend the offshore islands against determined Communist attacks. (Paras. 48, 53)

[Here follow paragraphs 5–53, consisting of more detailed discussion of the subject matter summarized here, and a map of Taiwan and adjacent areas.]

  1. Source: Department of State, INRNIE Files. Secret. A note on the cover sheet states that NIE 43–55 supersedes NIE 43–54. For text of NIE 43–54, “Probable Developments in Taiwan Through Mid–1956”, September 14, 1954, see Foreign Relations, 1952–1954, vol. xiv, Part 1, p. 627.
  2. A note on the cover sheet reads as follows:

    “Submitted by the Director of Central Intelligence. The following intelligence organizations participated in the preparation of this estimate: The Central Intelligence Agency, and the intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and the Joint Staff.

    “Concurred in by the Intelligence Advisory Committee on 1 November 1955. Concurring were the Special Assistant, Intelligence, Department of State; the Assistant Chief of Staff, G–2, Department of the Army; the Director of Naval Intelligence; the Director of Intelligence, USAF; and the Deputy Director for Intelligence, The Joint Staff. The Atomic Energy Commission Representative to the IAC and the Assistant Director, Federal Bureau of Investigation, abstained, the subject being outside of their jurisdiction.”

    The title on the cover sheet reads as printed here. The title on page 1 of the text is “The Prospects of the Chinese Nationalist Government”.