Foreign Relations of the United States, 1977–1980, Volume XIII, China

306. Memorandum From the President’s Deputy Assistant for National Security Affairs (Aaron) to President Carter¹

Washington, April 2, 1980

SUBJECT

• PRC Entry into the IMF/IBRD

I met with Secretary Miller and representatives of State and the NSC on this issue.² They continue to believe our margin of support in the Congress for the $5.5 billion quota increase we are requesting for the IMF and the $3.2 billion we are seeking as a contribution to IDA VI is so thin it could be jeopardized by a sudden decision by the PRC to occupy the China seat now held by Taiwan. They are also concerned that the Congress might adopt some anti-Chinese amendments barring IMF or IDA funds for the PRC.

At the same time, they agree that it would be too costly in terms of our bilateral relationship with China for us to press the PRC to delay their entry. But given the apparent reluctance of officials of the Bank and Fund to explain to the Chinese why a delay past this election year might be a wise course, a hands-off approach by the United States could result in the PRC making its decision on entry in ignorance of the possible consequences with resulting damage to the US–PRC relationship.

We therefore agreed that we should instruct Ambassador Woodcock to meet with the Chinese at a level below the Foreign Minister to avoid the impression he is making a formal démarche. In his meeting he would make clear that we have supported in the past, and will continue to support, PRC membership in the International Financial Institutions. He will then outline some of the factors we think the Chinese should be aware of in making their decision on the timing of their entry into these institutions. He will make clear, however, that whatever the PRC decision we will support it.

Recommendation:

That you approve the above approach which is reflected in the attached telegram (which you need not read).³

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 10, China (PRC): 4–7/80. Secret. Sent for action. A handwritten “C” at the top of the page indicates Carter saw the memorandum.
2. See Document 305.
3. Carter checked the Approve option and initialed “J.” Attached is an undated draft cable to Beijing instructing Woodcock to meet with Zhang Wenjin or an equivalent-level official to discuss both the unlikelihood of China receiving immediate funds from international financial institutions and the potential damage that Chinese membership could inflict on the institutions. Telegram 91349 to all OECD capitals, April 7, reported that China had officially stated its intention to take necessary steps to occupy the Chinese seat in the IMF, which would be a requirement for membership in the World Bank Group. (National Archives, RG 59, Central Foreign Policy File, D800193–0002)