Office of the Historian

317. National Intelligence Estimate0

NIE 43–59
Washington, November 17, 1959.

PROSPECTS FOR THE GOVERNMENT OF THE REPUBLIC OF CHINA

The Problem

To estimate the strengths, weakness, and prospects of the Government of the Republic of China, with particular reference to both its international position and its position on Taiwan.

Conclusions

1.
The past two years have been good ones for the Government of the Republic of China (GRC). Its international standing has benefited by its military showing during the 1958 Taiwan Strait crisis and by the truculence and brutality of its Chinese Communist rival. The GRC is supported, at least passively, by most of the inhabitants of Taiwan, who continue to enjoy one of the highest standards of living in Asia, [less than 1 line of 2-column source text not declassified]
2.
Nevertheless, the GRC is faced with a basic problem in that the demands of preserving the GRC as the government for all of China and effecting its return to the mainland compete with the requirements of building a viable economic and political structure on Taiwan, [less than 1 line of 2-column source text not declassified]
3.
If present trends continue, the prospect is for modest economic improvement for at least the next two years, although the rate may slow somewhat. As long as the military establishment requires a major portion of Taiwan’s resources, the economy will remain heavily dependent on outside assistance. Over the longer run, however, any regime on Taiwan will almost certainly be faced with serious economic problems stemming largely from the rapid population growth. A decrease in the standard of living would create political difficulties for the GRC. [less than 1 line of 2-column source text not declassified]
4.
Although, given continuing US naval and air support, Taiwan could be defended with smaller ground forces than now maintained, the [Page 633] GRC considers that any serious reduction in its armed forces would cast doubt on the concept of return to the mainland. GRC leaders recognize that existing forces are not capable of a successful invasion under present conditions, [2-1/2 lines of 2-column source text not declassified]. There have been, however, recent indications that Chiang has been considering the training of a special force of approximately 30,000 paratroopers for possible use in exploiting any widespread anti-Communist uprising that might occur or be fomented on the mainland, [less than 1 line of 2-column source text not declassified]
5.
[5-1/2 lines of 2-column source text not declassified]
6.
We believe that with strong US support the GRC will be able to hold its present position in the UN for the next two or three years. However, it is possible that this position might collapse before then, especially if Communist China refrains from further aggressive actions, [less than 1 line of 2-column source text not declassified]
7.
[18 lines of 2-column source text not declassified]

[Here follow 6-1/2 pages of source text scheduled for inclusion in the Supplement but not declassified.]

  1. Source: Department of State, INR–NIE Files. Secret. A note on the cover sheet reads in part 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 United States Intelligence Board on 17 November 1959.”

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