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241. Memorandum of Conversation1

PARTICIPANTS

  • Ambassador James C.H. Shen, Republic of China
  • Mr. Henry Chen, Political Counselor, Chinese Embassy
  • Dr. Henry A. Kissinger
  • Mr. John A. Froebe, NSC Staff

Ambassador Shen said that he had three things to take up with Dr. Kissinger on instruction from Taipei. The first was what the U.S. can do to slow down Japan’s efforts to normalize relations with Peking.2

Dr. Kissinger said that during his June visit to Tokyo he had advised Sato, Fukuda and Tanaka that Japan should not become separated from the United States on this question.3 Tanaka in response said that Japan would stay in step with the United States. Dr. Kissinger noted that Japan has, as a matter of fact, stayed with the U.S. on this problem. He said he also told Tanaka that the United States does not want to see its rights to use of bases in Japan under the Mutual Security Treaty compromised. Dr. Kissinger said he could not predict just [Page 1024]what Prime Minister Tanaka would do in the immediate future on relations with Peking, but thought he would probably visit Peking. He noted that the President would be meeting with Prime Minister Tanaka on August 31, at which time the U.S. plans to take a strong line.

Ambassador Shen said that his government was quite fearful that Japan would abrogate its 1952 peace treaty with the ROC, and that this would start a chain reaction in Asia that would undermine the ROC’s diplomatic position. Dr. Kissinger said that the U.S. has heard nothing officially as to Japan’s intentions regarding the treaty, but added that Ambassador Shen could be assured that the U.S. would try to persuade Japan to move carefully on this problem. Ambassador Shen asked Dr. Kissinger if it was his understanding that Chou En-lai might not insist that Japan abrogate the 1952 treaty as a pre-condition for beginning normalization talks, leaving this question to be resolved during the negotiations. Dr. Kissinger replied that this was his impression. He added that the U.S. would take this question up during the President’s discussions with Prime Minister Tanaka late next month. Ambassador Shen asked if Japan was unlikely to do anything on the treaty in the meantime. Dr. Kissinger said that Japan was unlikely to do anything on the treaty that the U.S. might be able to affect, and reiterated that the U.S. would be taking a strong position with Japan as regards use of bases in Japan under the Mutual Security Treaty.

Ambassador Shen said that the second problem Taipei had asked him to raise was that of the ROC’s position in the International Financial Institutions (IFI’s). Dr. Kissinger said that the United States was supporting the ROC’s continued participation in the IFI’s very strongly. Ambassador Shen said that the problem now was to work out contingency plans for the September annual meeting of the World Bank and the International Monetary Fund. Dr. Kissinger said that he thought that Mr. McNamara’s study committee proposal seemed to be an effective way of meeting that aspect of the problem.4 Mr. Froebe noted, however, that Mr. McNamara has recently had decided second thoughts about the advisability of this approach because of a lack of support in the Board of Executive Directors and from the IMF.5

Ambassador Shen said that his government’s basic concern was that it not see a replay of the Chirep defeat in the case of the IFI’s. Dr. Kissinger responded that the two were quite dissimilar, adding that we do not expect the same outcome in the case of the IFI’s. Dr. Kissinger said that he thought the best approach to this problem was for the ROC to continue to maintain a low profile in order to avoid any challenge [Page 1025]to its position in the IFI’s. Ambassador Shen asked what U.S. agencies were following this situation, to which Dr. Kissinger said that Mr. Holdridge was the responsible officer on the NSC Staff. Dr. Kissinger stressed that the U.S. intends to avoid a repetition of the Chirep experience. He mentioned that he would also discuss this with Treasury Secretary Shultz since Treasury has much to say about this problem, and asked Mr. Froebe to check into the situation for him.6

Turning to his third question, Ambassador Shen asked if there was some reason for the seeming delay in the approval of the Ex-Im Bank loans for the ROC’s planned third and fourth nuclear power plants.7

Dr. Kissinger asked Mr. Froebe to check into this also, and said that he saw no reason for the delay and intended to expedite the matter.

Dr. Kissinger said that he had not seen Ambassador Shen following his June trip to Peking, given the fact that the Taiwan question had not really come up. Ambassador Shen expressed some surprise that the Taiwan question seemed to have been avoided, and asked if this had been because the Taiwan question was now considered settled. Dr. Kissinger said that this was not the case, and that as a matter of fact Chou En-lai had at one point commented that further progress remained to be made on the Taiwan question.

Ambassador Shen asked if Peking is still worried about the Soviets. Dr. Kissinger said that he thought that there had been no major change in Peking’s view on that problem. Dr. Kissinger reminded Ambassador Shen after the President’s China visit that the Taiwan issue had given rise to considerably more consternation in some quarters than had been justified. Ambassador Shen interjected that Chou En-lai, however, has suggested that Peking will not agree to any large exchanges with the United States so long as there is a GRC Embassy in Washington. Dr. Kissinger replied that this is of little consequence to the United States.

Ambassador Shen suggested that if Chou does not get the movement he wants on the Taiwan question he may stop Americans from going to the mainland. Dr. Kissinger said that he was highly skeptical of this, explaining that Chou would act in accord with Peking’s basic national interests. He noted, for example, that Peking has not reacted against [Page 1026]the U.S. bombings of North Vietnam. Responding to Ambassador Shen’s query about the prospects for U.S. trade expansion with the mainland, Dr. Kissinger said he believed the same basic consideration would apply. Applying the same concept to Peking relations with Japan, Dr. Kissinger said that the maximum that Peking could do for Japan in the trade field would be less than Japan was already doing with Taiwan.

Ambassador Shen asked Dr. Kissinger his opinion as to why the Japanese were acting the way they were on the China issue. Dr. Kissinger said that it seemed to be in the Japanese character to do things in a somewhat unbalanced way. He said that he himself as a basic principle did not believe it efficacious to acquiesce in pre-conditions to negotiations. He said he could tell Ambassador Shen in the strictest of confidence that he was thinking of sending Mr. Holdridge to Tokyo to talk to the Japanese about the whole problem.

Ambassador Shen again stressed that if Japan abrogates its 1952 treaty with the ROC, all of Southeast Asia will take another look at its relationship with Taiwan. Considering what his country had done for Japan at the end of World War II, the present Japanese actions were nothing less than gross ingratitude. Dr. Kissinger commented that unfortunately gratitude is not a dominant factor in foreign relations.

Dr. Kissinger asked what had happened in Taipei’s recent Cabinet reshuffle to Ambassador Shen’s predecessor, Chow Shu-kai. Ambassador Shen said that he was now a Minister without Portfolio, noting that this made him the second former Foreign Minister to occupy that position in the Cabinet, the other being George Yeh, who also is a former Ambassador to Washington. Dr. Kissinger observed that no one has had such a difficult job to perform as Ambassador Shen had in the year that he had been here.

Ambassador Shen asked Dr. Kissinger’s evaluation of the general situation in Asia and particularly that in Vietnam. Dr. Kissinger said that the U.S. is in a strong military position and that that of the North Vietnamese would get worse. The U.S. therefore can afford to wait. Answering Ambassador Shen’s question as to what Hanoi is waiting for, Dr. Kissinger said he thought Hanoi probably wanted to see how the U.S. election campaign would go in the next month or two. Asked if Hanoi might try to hold out until after the November elections, Dr. Kissinger said that North Vietnam could only get worse terms after the election, assuming the President is re-elected. Asked if he thought the U.S. could end the war before November, Dr. Kissinger said it was impossible to tell at this point.

John A. Froebe 8
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 523, Country Files, Far East, China, Vol. X. No classification marking. Drafted by Froebe on July 26. Kissinger and Shen met from 12:12 to 12:40 p.m. in Kissinger’s office. (Library of Congress, Manuscript Division, Kissinger Papers, Box 438, Miscellany, 1968–1976, Record of Schedule)
  2. On July 19 Japanese Prime Minister Kakeui Tanaka publicly announced his willingness to modify his nation’s relationship with the PRC. On August 11 the PRC and Japanese Governments announced that Tanaka would visit the PRC in the near future. The two governments announced on September 21 that Tanaka would visit September 25–30. During this visit, Chou En-lai and Tanaka announced the impending restoration of normal diplomatic relations, causing the ROC on September 29 to announce that it would break relations with Japan.
  3. The record of the conversation among Kissinger, Fukuda, and Tanaka is scheduled for publication in Foreign Relations, 1969–1976, volume XIX.
  4. See Document 237.
  5. See Document 245.
  6. Froebe forwarded a memorandum through Holdridge to Kissinger on August 2. He noted: “As regards the question of protecting Taiwan’s continued participation in the IFI’s, World Bank President McNamara has decided not to try to proceed, in advance of the Bank and IMF annual meeting next month, with his plan to set up an ad hoc study committee in the Bank’s Board of Executive Directors.” Froebe also noted that the Departments of State and Treasury would be forwarding further recommendations shortly. (National Archives, Nixon Presidential Materials, NSC Files, Box 523, Country Files, Far East, China, Vol. XI)
  7. See Document 239.
  8. Printed from a copy that bears this typed signature.