246. Telegram From the Embassy in Laos to the Department of State1

5546. 1. During wide-ranging critique of U.S. policy which it was my function to present at recent Baguio meeting, I made certain suggestions on medium and long range policies for Taiwan and the Pescadores. These suggestions were tabled “for further staffing.”

2. In order provide framework for those who wish examine these suggestions further, I will spell out in this message the rather sketchy oral statement which I made at Baguio. As I said in that presentation, it is a proposal which I believe ought to be examined in further detail.

3. Moreover, it is based on two premises. The first is the assumption that Communist China’s internal problems will keep it occupied for a long time and that our function is to prepare the framework into which we would like to see China fitted when and if it decides to rejoin polite society. The second assumption is that we will achieve a successful and satisfactory stabilization of the military problem in Southeast Asia which will permit us to withdraw a large portion of our armed forces from Vietnam, but which will leave us the necessity of remaining alert for possible ready reintroduction. Flowing from these two premises, would be the probability that we could thin out our U.S. troop commitments in both Korea and Vietnam to more or less “trip-wire” proportions.

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4. From this base, I predicated the idea that our interests and those of Japan lay in seeing Taiwan and the Pescadores permanently divorced from Mainland China, even a Mainland China which converted to a considerable benevolence. In short, both we and the Japanese have a vested interest in a “Two China” situation.

5. My proposal, therefore, was that we move, with appropriate associates, to define the sovereignty of the GRC as limited to Taiwan and the Pescadores, in accordance with the administrative sphere assigned the GRC by the Supreme Commander for the Allied Powers, under whose authority the GRC ultimately occupies and administers these islands. There is a sound legal case for this, well preserved in our diplomatic acts and in treaties affecting this territory.

6. This, in turn, would lead to a definition of territorial representatives in the United Nations and establish a “Two China” situation there, providing the framework into which an ultimate, reformed, Mainland China might one day be fitted.

7. It would also require the GRC abandonment of the Offshore Islands and a clear stipulation by the U.S. Government (as distinct from our current deliberate vagueness) that the so-called “Formosa Resolution” applies to Taiwan and the Pescadores only.

8. In order to give some enforcement to these measures, I further recommended the deployment of a forward ready reserve of U.S. ground forces to Taiwan. This would doubtless have to be accomplished before we went to the mat with the GRC on such matters as the Offshore Islands and the Formosa resolution. The troops would be some of those withdrawn from Korea and Vietnam.

9. In part, this deployment would have a military and psychological purpose, to give positive evidence, in the area, of our readiness to renew our presence in either Vietnam or Korea should conditions warrant. In larger part, it would have a political purpose, directly associated with China policy.

10. Its first political purpose would be to prevent a deal behind our backs and against our interest. To borrow Ed Rice’s phrase “When the empire unites, it tends to divide; when the empire divides, it tends to unite”. A deliberate “Two China” policy would please the Taiwanese and perhaps many of the second generation Mainlanders: but there would be many of the old Mainlanders who would rather make a deal with Peking than be subjected to permanent divorce from the Mainland. Our troop presence would be designed to inhibit this.

11. Moreover, our troop presence would be designed as a blue chip for eventual negotiations with Peking. As matters now stand, even a regenerate Mainland regime could be expected to demand the return of Taiwan before agreeing to any sort of normal relations with the U.S. In the event, there would be a great popular pressure, at home and abroad, [Page 534] to make this sacrifice, especially if Peking appeared less and less bloody minded. In the current circumstances, the only things we could bargain against Peking’s demand would be the Offshore Islands. Now, these the ChiComs could take in any event unless we were willing to fight for them (highly dubious prospect).

12. Hence, if, when faced with Peking’s demand, we have a lot of U.S. troops whose presence we can trade away against an international agreement guaranteeing the independence of Taiwan and the Pescadores, we are in a far better bargaining position. As Admiral Sharp points out, Guam is good a place as any for our ready reserve, and we would really not deprive ourselves of much military advantage if we withdrew there, especially if we could do this in return for an agreed independence for Taipei.

13. Finally, it can be argued that U.S. troops in Taiwan would obviate the GRC requirement for a large, costly standing army. If this argument is accepted, we would have less MAP costs, less effective opposition to “Two Chinas” and more resources, both financial and human, for Taiwan’s economic development.

14. These, then, are the elements for a staff study. I hope it can be presented in final form for debate at next year’s Baguio Conference.

  1. Source: Department of State, Central Files, POL 1 CHINAT–US. Secret; Limdis. Repeated to Hong Kong, Taipei, Tokyo, CINCPAC, JCS, and USUN.