Foreign Relations of the United States, 1964–1968, Volume XXX, China

290. Telegram From the Embassy in the Republic of China to the Department of State¹

Taipei, December 5, 1967, 0855Z.

1569. Ref State 78711.²

1. When DefMin Chiang Ching-kuo (CCK) came to my residence yesterday (Dec 4) at his own request to brief me on his recent trip to Japan (reported septel), I took opportunity to prepare him for prospective substantial MAP cut and to suggest possibility of reducing size of GRC ground forces as one means of reducing military expenditures.

2. I reminded CCK that I and US military representatives here had already told him of probable sizeable reduction in map funds for the current fiscal year. I said that while the final appropriation has not yet been passed, it now appeared highly likely that the world-wide map program would be significantly reduced. I said that the GRC would have to take its essentially proportionate share of a rather drastic reduction along with most other recipients. It appeared that military assistance to Korea and Thailand, for compelling reasons, would not be affected as much as the GRC. I told him that COMUSTDC VAdm Chew and MAAG Chief MGen Cicolella had been for some time discussing with me ways to cushion the adverse effects and offset part of the program losses that seemed almost certain. I hoped that Gen Cicolella’s constructive ideas for economies and greater combat efficiency within the GRC military establishment would help, and I thought his suggestions for enabling the GRC armed forces to earn revenues for military purchases by rebuilding and overhauling US combat equipment used in Vietnam might also hold considerable promise. I said we all hoped that the reduction would be instituted for a single year only, but we could not be sure of this, because once Congress makes deep cuts it is possible they will be inclined to follow the newly established level as a precedent in future years. I emphasized that the impending cut did not represent any change in US policy, and that the defense needs of the GRC were well appreciated in Washington and at CINCPAC. I pointed out that the cutbacks of major investment items including F–5 aircraft would not be felt for two years or more because the procurement pipeline was very long. If the cuts are not restored in future years, I said, there could eventually be a heavy adverse impact in the essential categories of modern weapons unless we plan carefully, and coordinate closely to make the best use of the resources that are available. I said there would of course be an immediate impact on operating funds. I knew that his officers had been in close contact with Gen Cicolella, and I believed that I had kept Washington well informed of the GRC needs and of the effects of the proposed reductions.

3. CCK said that any deep cuts would be a very serious and important matter to the GRC. He intended for his senior MND and service officers to keep in close touch with Gen Cicolella on this problem. He said that as a matter of policy it was necessary to keep up the combat effectiveness of GRC forces at a time when ChiCom military effectiveness is increasing steadily. He asked that USG pay close attention to the pressing need for implementation of this basic policy.

4. CCK observed that in past years the significance, although not the magnitude, of military assistance to Korea and to the GRC has been very similar since the role of the two countries as vital parts of the system of deterrence of ChiCom aggression was comparable. He said that although he realized Korea was making a troop contribution in Vietnam he hoped that “in principle” MAP for Korea and for the GRC would be considered together, although the amounts furnished the two countries would of course differ. I said I understood his point and I would make sure that Washington understood also.

5. I then said that the question has been raised as to whether the GRC should not consider reducing its ground forces, while at same time upgrading their effectiveness and firepower. I asked for his reaction to this thought, which might have effect of saving needed funds during a period of stringency resulting from MAP reduction.

6. CCK paused, considering his reply and said carefully that it would of course be necessary to confer closely with MAAG about the best means of maintaining the combat effectiveness of GRC forces. However, he said, “any reduction in the size of our ground forces is something we cannot consider (pu neng k’ao lu).” He said any such move would be essentially a political one, with grave political repercussions. He pointed out that while the reduction in MAP would have some adverse impact in the GRC, if it did not affect the status of capability of the armed forces, it would not be misunderstood by “the average person” on the GRC as signifying any change in basic US-China policy, especially since it was a Congressional rather than an administration action, and would be of general and impartial worldwide application. On the other hand, any reduction of the force levels in the GRC would lead people to think there had been a change in policy, attributable to US action and affecting the security of the GRC. Anyway, he said, reducing the ground forces would not result in much saving. He said he realized and understood the difficulties the USG is having with MAP, but that the GRC also has its difficulties. Any reduction of forces would have misleading implications and would also have a bad effect on morale of GRC forces. Even raising the subject for general discussion would have adverse repercussions. Since any saving would be small, and the repercussions great, it would be very much better not to pursue this proposal at all. He again said he would discuss carefully with MAAG the best means of maintaining and improving the combat effectiveness of existing GRC forces with available resources.

7. I observed that we on the US side all hope that the GRC can ensure that the impending MAP cut will not have an adverse effect on the economic development of the country. We are deeply impressed with the remarkable progress made in the economic field in Taiwan, and we earnestly hope that the GRC can avoid any diversion of resources from economic development to defense that would impede economic growth. I realized it would not be easy to meet essential requirements in both sectors, but it was important that a major effort be made to do so, and we hoped we could help.

8. CCK replied that he understood my point very well. He wanted to state that what he had said earlier was put forward in the light not only of GRC interests but also the security interests of the US. He said that approaches other than reduction of forces would have to be found. He said he and his government believed that us problems are also those of the GRC, and those of the GRC are also US problems. We would consult closely in seeking solutions. We felt that basically money is a secondary factor, the most important element being the underlying spirit and attitude of the cooperating countries.

McConaughy

1. Source: Department of State, Central Files, DEF 19 US–CHINAT. Secret; Priority. Repeated to CINCPAC.
2. Telegram 78711, December 2, reported that Congressional reductions in military assistance programs made it almost certain that FY 68 military assistance to the GRC would be reduced to the $50 million grant level, and requested the Embassy’s views as to the impact of this. (Ibid.)