88. Assessment Prepared by the Central Intelligence Agency1


Summary. The GRC is rapidly approaching the end of an era, and it seems almost certain that the next few years will be marked by sweeping changes in the domestic situation and in Taipei’s international position. The groundwork for these changes is already prepared. What is perhaps the most significant GRC achievement—rapid economic development of the island—has set the stage for potential shifts in the internal political balance. Changes in the U.S. political priorities and the gradual resumption of Peking’s long march toward regional dominance in East Asia point toward the necessity for acceptance of a new international role by the GRC.

Society on Taiwan is being rapidly urbanized. The many stresses which result—including a growth of political consciousness among the underdog Taiwanese majority—will be harder to cope with because of the split between the politically dominant Mainlanders and the generally alienated Taiwanese, who outnumber them 8 to 1. Internationally, the GRC faces an increasingly precarious situation with steadily diminishing options as U.S. power is gradually shifted in the Pacific. [Page 228] Eventually, the leaders in Taipei must confront the unpleasant prospect—probably sooner rather than later—of acknowledging the “two Chinas” situation and openly accepting the galling status of a small power existing behind the shield of U.S. and/or regional security guarantees. Against this backdrop of trouble, the GRC leadership must cope with the succession question—probably no later than 1972—and a host of lesser problems.

Despite the uncertainties in the near-term future, I feel quite confident that the GRC will weather its problems successfully during the next several years.2 The economic growth, which is at the root of many political and social difficulties, also produces a steady rise in the standard of living which serves as a balancing factor in an otherwise unstable situation. This, in conjunction with the pervasive security apparatus and the fact that “Taiwanese independence” is still basically a state of mind, makes it seem likely that the period just ahead will be comparatively tranquil internally. This judgment would require immediate review if some sudden stroke of fate removed the President’s able son, Chiang Ching-Kuo, from the line of succession to de facto control as Premier— which I confidently expect within the next twelve months.

This does not mean, however, that either the U.S. Government or [less than 1 line of source text not declassified] will have easy times ahead in working with the GRC. I believe the Chinese are going to become more touchy, more demanding and more inclined to be assertive where there is any question concerning GRC sovereignty. [2 lines of source text not declassified]

[Omitted here is an 11-page analysis of the Taiwan situation.]

  1. Source: National Archives, RG 59, EA/ROC Files: Lot 73 D 38, Pol. Assessment–US/GRC. Secret. An attached but not printed covering memorandum from Nelson to Green states that this report was prepared by the CIA.
  2. Shoesmith prepared a memorandum for Green on September 11, in which he took issue with the CIA report. Shoesmith posited that “the GRC is not merely facing the ‘end of an era’ but a basic challenge to the political structure which has been maintained on Taiwan since 1949.” He also observed that the passing of Chiang and the declining international position of the ROC created a “potentially explosive” situation that could impair domestic economic growth and, in turn, exacerbate political conflicts between mainlanders and the Taiwanese. Green wrote on the first page of this memorandum: “Many thanks. The two analyses [names not declassified] made useful contrasts. MG.” (Ibid.)