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157. Paper Prepared in the Policy Planning Council0

According to a November 28 memorandum from Rostow to Planning Group members, the longer papers were based in part on discussions over several months by an interagency group. (Ibid., Harvey, M., Chron)According to Rostow’s November 28 memorandum one of the papers on which this one was derived had been discussed by senior officers of the Department and, while there was disagreement on some points, there was general agreement that the policy approach recommended in the paper was sound. No other record of that discussion or the December 4 discussion has been found.



Purpose: This paper proposes specific policy decisions and actions designed to secure maximum benefit to the US from the changing situation in Communist China.

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Background: Strong elements of instability exist in Communist China in consequence of economic difficulties and worsening relations with the USSR. To these must be added the inevitable problem of succession as the aging veterans of the long-march, who still absolutely dominate the leadership, pass from the scene. While we cannot be sure of the long-run effects of these disruptive forces, there is a good probability they will result in either a lasting erosion of the capability of the regime to effect its communist goals at home and abroad or in a basic change in orientation. This probability is sufficiently great to justify tailoring US policy to give it full play. There is also a possibility that the Chinese Communist leadership, frustrated in many directions, will launch massive aggression across their borders. Although they have thus far moved with considerable caution, this contingency deserves steady policy attention.


Basic Policy Requirements: Our broad aims should be: (a) to avoid actions, and to seek to induce others to avoid actions, that would reduce pressures operating on the regime as it is presently constituted and oriented, or would force the regime and the Soviets back into a close association; and (b) within the limits of these requirements, to maintain flexibility adequate to enable us to encourage and capitalize on any movement toward significant favorable change within China.

To effect these aims we have need for: (a) maximum cooperation from allied and friendly governments; (b) appreciation of our objectives and the rationale therefor by the Congress and the American public; and (c) minimal restraints on our freedom of action in consequence of our alliance with the Nationalist regime on Taiwan.

The specific tasks we face are: (a) to refine and make more effective our present policy of keeping the regime under pressure; (b) to isolate touchstones of change in Communist China that would justify changes, small or large, in US policy; (c) to maintain lines of communication that will enable us to send signals as to our policy and intentions regarding developments in China and to receive signals that may be forthcoming from within China; (d) to respond to any concrete indications of change in ways that would encourage movement toward a favorable reorientation but would not contribute prematurely to a relief from pressures operating on the regime; and (e) given convincing evidence of a basic shift in Chinese policies and purposes, to be prepared to adjust our own policies to the extent necessary to nail down the shift and to use it as a basis for seeking a lasting resolution of the China problem.

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Recommended Policy Decisions and Actions: At the present stage1 decisions and actions should encompass the following:

A. Essential Foundations

1. We should formally adopt as the governing principles of our China policy:

Continued firm US opposition to any relaxation of pressures on or compromises with the Peiping regime unless and until concrete evidence is given of an intention on the part of Peiping to alter its aggressive policy and actions and to modify its stance of active hostility toward the US and the non-communist world.
A willingness on the part of the US to meet any specific move by Peiping toward relaxation with an appropriate corresponding move of its own, although not necessarily in kind.
Readiness of the US to settle on an across-the-board basis its differences with China if and when any regime in power convincingly demonstrates by its policies and conduct, at home and abroad, an intention to devote its energies and resources to meeting the legitimate needs of the Chinese people and to establish on a lasting basis good relations with the US, its Asian neighbors, and the western world generally.

2. Following adoption of these principles, we should:

Take the initiative in explaining to key allied governments the US position and the underlying rationale. We should seek to develop a sober appreciation of the great advantage the Free World derives from even a temporary preoccupation of Communist China with its internal problems, and of the possibility that prolonged failures of the regime to solve those problems can lead to a break of truly historical importance for the Free World cause.
Inform the American public more fully of the problems and opportunities incident to our China policy. Our aim should be an understanding that our stance of reciprocal hostility, which will be maintained as long as necessary, is not an end in itself but a means to effect changes in China that will enable us to live at peace with whatever regime is in power.
Systematically seek to reconcile the Chinese Nationalists to the fact that our China policy must necessarily serve the broad interests of [Page 328]the US and the Free World generally rather than the interests of the Taipei regime alone. We should clarify our policy toward Nationalist military action against the mainland along lines set forth in paragraph B8 below. We should reaffirm our lasting resolve to protect the security of Taiwan proper, but should at the same time prepare the way for general policy adjustments which we may come to consider desirable and necessary and which would not affect Taiwanese security. (Should Chiang pass from the scene at an early date, we should press on the successor regime this educational campaign with special vigor.)
Take advantage of appropriate opportunities that might be offered in the Warsaw talks to elaborate our basic thinking re problems affecting US relations with China and the circumstances that could contribute to their resolution.

B. Maintenance of Pressures on an Unregenerate Regime

3. In the interest of keeping the Peiping regime under pressure unless and until it demonstrates a change of heart, our primary need will be to continue present policies encompassing territorial containment, support for peoples threatened by either direct or indirect Chinese aggressions, direct military confrontation at various crisis points, preservation of and support for the Nationalist regime on Taiwan, differential trade treatment by the US and such friendly powers as the US can influence, and attempts at maximum political isolation. It is important, however, that we maintain an added alertness to frustrate maneuvers by Peiping, or even by our friends, to break the line, and that we introduce certain refinements and tactical variations in our policies to make them more effective.

4. A continuing need is to stay on top of Chinese trade relations with western countries. Since 1960, Chinese trade with bloc countries has precipitously declined. Trade with the west has at the same time increased, now equalling more than 50 percent of the total. This proportional change has so far not involved a substantial shift from bloc to western suppliers; the phenomenon reflects simple abstinence with regard to bloc goods, particularly machinery, while large supplies of grain have been procured in the west. The Chinese have, however, shown interest in developing western alternatives to bloc sources. While some shifts to the West may be desirable, we should attempt to prevent any net improvement in the Chinese situation as a result.

We should make representations to all allied and friendly governments to discourage liberalization of present trade practices, particularly opposing grants of long term credits. In addition to utilizing the rationale of our own China policy in these representations, we should place special emphasis on the lessons to be drawn by the Free World from Chinese attacks on India.
We should raise with the Canadians, Australians and French question about grain sales to China in the context of the Chinese attack on India. In addition to discouraging any improvement in credit terms, we should lay foundations for a possible end to shipments in case China renews the border conflict with India.2
We should take added steps to influence the Japanese to move slowly in developing its trade with China. Although neither the current level of Sino-Japanese trade, nor the currently indicated level for the near future, is apt to affect significantly conditions in China, the potential is quite important, particularly if Japan should allow long-term credits or enter into intricate developmental barter arrangements. The “lesson of India” as well as other considerations should be kept constantly before the Japanese.
We should explore possibilities, and the advantages and disadvantages, of denying to China petroleum from western sources should Peiping, either on its own initiative or as a result of Soviet action, attempt to shift from the Soviet market.
Should large-scale Chinese attacks against India be resumed, we should explore possibilities of a total western embargo against China.

5. We should subject the regime to a more forthcoming psychological drive. In particular:

We should encourage a full and continued public airing in the US and abroad of Communist China’s troubled situation and dimmed prospects, but in a way that would not suggest a special campaign, which might be counter-productive.
We should supply US missions, particularly in the under-developed countries, with documentary and intelligence data on developments in Communist China, and should instruct missions to arrange to keep appropriate government officials and influential private citizens informed of these developments on a continuing basis.
We should push diligently and begin early implementation of the project already underway to minimize the impact of a possible Chinese explosion of a nuclear device.
In continuing to oppose Communist China’s admission to the UN, UN subsidiary organizations, and other international organizations, we should tailor our arguments to reflect the basic principles of our China policy as outlined under IV 1. above.
US officials should increasingly stress publicly US concern for the welfare and progress of the Chinese people. We should emphasize [Page 330]our willingness to help, with the rest of the civilized world, the Chinese people if and as the attitudes, policies and—by implication—make-up of the ruling regime make this feasible.

6. It is especially important that we continue to do whatever may be necessary to deny to Peiping, or to Communist elements generally, cheap successes in Asia.

7. We should maintain, and if circumstances warrant step up, the pressures resulting from our military presence in the Taiwan Strait, Korea, and South East Asia.

8. We should avoid ourselves, and insist that the Nationalists avoid, military operations against the mainland on a scale and of a nature that would risk costly losses, furnish an effective rallying point for the regime, invite a dangerous counter-move by the regime (e.g., an all-out attack on the Offshores), or place us in the position of having to back a losing ally or lose prestige. We should, however, support continued or even substantially increased small-scale probes and clandestine operations by the Nationalists which could be useful for intelligence purposes, particularly as a means of testing the temper of communist-armed forces and of the public, and possibly for keeping the regime off balance. We should not, however, give such countenance to these operations as would suggest, or escalate into, US commitments to sanction increasingly pretentious Nationalist efforts. We should instead gradually make clear to the Nationalist regime that the only circumstance in which we envisage the possibility of their return to the mainland would be one wherein they had in effect been invited to do so by strong forces within China, which had already declared themselves against the communist regime.

C. Touchstones for US Policy Changes

9. While pursuing a policy of pressures on an unregenerate regime, we should maintain a constant alert for direct or indirect indications of changes in the attitudes and policies of the rulers and should react in ways designed to further movement toward a genuine reorientation.

The weight we attach to apparent signals should be heavily influenced by the composition of the dominant element in the leadership at the time. As a general rule:
  • —We should be wary of any gestures or maneuvers emanating from a leadership still subject to Maoist control; we should not ignore Maoist moves, but should limit our responses to atmospherics designed to test how far Mao is prepared to go; we should especially avoid responses involving exchange of relief from pressures or important prestige gains for atmospherics or commitments revocable at will.
  • —In case movement occurs in a “regular” succession situation (i.e., Mao had apparently died or been incapacitated), we should match step with step, going as far and as fast as the new leadership is willing to, but still exercising care not to get ahead of the game.
  • —Should it be apparent that a coup had been effected against Mao or Maoist elements in the leadership, we should assume optimum chances of progression to a basic reorientation and shape our policies accordingly.
Our evaluation of Chinese moves should accord with their implications for a basic change in orientation of the ruling regime rather than for a simple “relaxation of tensions”.
  • —The prime test should be whether moves involve changes in attitude and policies toward the US. This derives from the fact that hostility toward the US, as the leader of the “imperialist” camp, is the keystone of the Chinese revolutionary ideological system.
  • —We should be little impressed by overtures to “second” capitalist powers, e.g., Japan, India, or even the UK, unless accompanied by gestures the US, as these could well be undertaken as a means of relieving pressures or as a maneuver in the revolutionary game.
  • —We should also be little impressed by a revival of the “Bandung spirit” or other steps involving renewed play upon “peaceful coexistence.”
With regard to specifics, we should look for and react favorably to: moves involving a marked change in propaganda treatment of the US, a change of stance regarding Taiwan, de-emphasis of the “national liberation” theme for SE Asia, overtures to the US for renewed trade relations, relaxation of restrictions on contacts with the non-communist world, and proposals looking toward negotiations with the US without the “pre-conditions” of the past.
Our evaluation of moves in the international sphere should be importantly influenced by whether there are indications of an accompanying relaxation of militancy on the domestic front.

10. Our responses to Chinese moves should aim at moving the process of change forward rather than wrapping up immediate advantages. Until the game gave promise of decisive results, US reaction should be guarded, designed to keep the dialogue going, but stopping short of anything that would give the regime important advantage or restrict our own freedom of action to match in kind any sudden reversal.

11. We should not initially expect or even seek formal agreements or negotiated quid pro quos. For some time at least, reliance should be on parallel tracks of reading and sending signals. The principal area of maneuver on our part should be in the trade field. Beginning with only token steps to meet token gestures on Peiping’s part, we should be prepared to move progressively to a point where our trade policies toward mainland China would correspond to those toward members of the Soviet Bloc. Another area of maneuver that should be opened up once substantial progress had been demonstrated would be military confrontation. If, for example, Chinese propaganda attacks on the US should be significantly reduced we might pull our naval forces back from the [Page 332]Taiwan Strait and operate behind rather than forward from Taiwan. Given a more decisive move on the Chinese side, say significant efforts to stabilize the situation in Southeast Asia, we might respond by inducing the Nationalists to evacuate the Offshores.

D. Contingency Planning for Disaster Situation

12. Although current indications do not suggest the likelihood of an early turn in China that would lead to chaotic conditions, the magnitude of the problems that would arise in this event, specifically in connection with emergency relief, made desirable a comprehensive study of the scale and urgency of requirements that would result and of the possibilities with regard to meeting them.

  1. Source: National Archives and Records Administration, RG 59, Records of the Department of State, S/P Files: Lot 69 D 121, S/P Record Copies. Top Secret; Sensitive Handling. A handwritten note on the source text indicates that it was discussed by the Planning Group on December 4. No drafter is indicated on the source text, but the paper is derived from two longer papers of November 15 and 19, both entitled “A U.S. Policy Toward Communist China,” drafted by Mose Harvey of the Policy Planning Council. (Ibid., China)
  2. The recommendations made here do not cover all of the measures necessary to meet the policy requirements set forth under III above. They are limited to those necessary to get the policy under way. As the situation develops and various contingencies arise, appropriate additional steps can be taken within the framework of this policy plan. The recommendations also do not cover present policies which require no changes under the plan. [Footnote in the source text.]
  3. According to a CIA study of November 27, grain shipments from western sources contributes appreciably to the strength of the regime. Grain shipments, in fact, appear the only economic lever the western world has against the regime. [Footnote in the source text.]