56. Telegram From the Department of State to the Embassy in the Republic of China1

218248. Subject: ROC Ambassador’s Call on Secretary, September 10.

1. ROC Ambassador James Shen called on the Secretary September 10 at 10:30 A.M. to discuss U.S. China policy in the light of the Secretary’s recent visit to Peking.2 Assistant Secretary Holbrooke and EA/ROC Director Feldman were present. The Secretary characterized his meeting as useful. They included a wide-ranging exchange of views helpful to both sides.

2. The Secretary said that in the course of their review of international problems, the two sides found common interests in a number of issues. Normalization of US–PRC relations was also discussed at some length. The Secretary stated that our ultimate goal is full normalization of relations, emphasizing that this goal had to be reached in ways which did not undermine prospects for peaceful settlement of the Taiwan issue by the people of Taiwan and the Mainland themselves. Our essential relations with the people on Taiwan would continue after normalization.

3. Referring to the AP editors interview with Teng Hsiao-ping, Ambassador Shen asked if it were true that the Secretary had suggested elevating USLO Peking to an Embassy and downgrading Taipei to a Liaison Office.3 The Secretary replied that in the discussion of normalization the question of diplomatic relations did indeed arise. He stressed, however, that the visit was exploratory, was not intended to reach agreements and in fact none were reached.

4. Ambassador Shen reviewed at length Premier Chiang Ching-kuo’s several restatements of basic ROC policies and their unchanging character: The ROC would not alter its basic structure (i.e., would not abandon its claim to be the legal government of all of China) nor its policy of full reliance on the U.S. U.S. China policy was seen in Taipei as inherently destabilizing to the peace and security of the area [Page 228] because Peking might be emboldened to attempt an attack on Taiwan. It was understood, of course, that Peking was not militarily able to do this at the moment, but its insistence that it could use any method it chose to “liberate Taiwan” carried an implicit threat for the future. Withdrawal of U.S. security guarantees could easily lead Peking to miscalculate.

5. Continuing, Ambassador Shen noted that some Americans have said the economy of Taiwan is so healthy, the leadership so good and the people so united that Taiwan can absorb any shock. This is not necessarily so. Although it has been able, with American assistance and American security guarantees, to overcome many difficulties, severance of U.S. diplomatic relations could lead to capital flight, economic collapse and even civil disorders. This would be in no one’s interest. The U.S., Shen said, has established its interest in dialogue with Peking; why not now leave matters where they stand? In particular, the GROC would greatly appreciate a USG statement of the kind requested by Foreign Minister Shen Chang-huan last May: That it is the policy of the administration to maintain diplomatic relations with the ROC for the foreseeable future.4

6. The Secretary said that both he and the President have recently made clear the deep concern of the USG for the security and well-being of the people on Taiwan. However, we will continue, from time to time, to discuss with the PRC matters of interest. Ambassador Shen again emphasized the ROC’s desire for a statement that diplomatic relations would continue for the foreseeable future. Asst. Secretary Holbrooke, in reply, emphasized the USG’s goal of normalization of relations with Peking while maintaining essential relations with Taiwan and without affecting the security and well-being of the people there. It is our hope [Page 229] that we can work to the maximum extent possible with Ambassador Shen and his government within that framework.

7. Shen asked whether “essential relations” could be more specifically defined, and the Secretary replied that on the basis of Assistant Secretary Holbrooke’s briefing last month, Premier Chiang was fully aware of what we meant by that term.5 The conversation ended with Ambassador Shen expressing the hope that the U.S. would proceed with the utmost caution, understanding that the process on which the U.S. was embarked could result in great damage to the ROC and no benefit to the U.S. The Secretary emphasized that we were indeed proceeding with caution.

8. The Secretary and Ambassador Shen agreed that neither would discuss with the press the substance of their talk.

  1. Source: National Archives, RG 59, Central Foreign Policy File, D770330–0653. Confidential; Priority; Exdis. Drafted and approved by Feldman (EA/ROC) and cleared by Holbrooke and in EA/PRCM. Repeated Priority to Beijing, Hong Kong, and Tokyo.
  2. See Documents 4752.
  3. Deng met with executives of the Associated Press on September 6. See Louis D. Boccardi, “Teng Says Vance Trip Set Back Normal Ties,” The New York Times, September 7, 1977, p. 57. Boccardi reported, “Secretary Vance discussed setting up a United States liaison mission in Taiwan and a full diplomatic mission in Peking, but the Chinese rejected that.” See also footnote 6, Document 62.
  4. Ambassador Unger and Foreign Minister Shen Changhuan met on May 19. Unger reported that Shen gave him an aide-mémoire suggesting that the United States make a pronouncement “reaffirming” the position of “maintaining diplomatic relations with the ROC and abiding by the commitments under the Mutual Defense Treaty of 1954.” Unger noted that the aide-mémoire did not reflect his conversation with Shen as they had not discussed such a reaffirmation in the meeting. Moreover, he added, “the aide-mémoire contains in its final paragraph what I read to be a misinterpretation of Under Secretary Habib’s comments in his discussion with Ambassador James Shen as reported in State 034897.” (Telegram 2941 from Taipei, May 20; National Archives, RG 59, Central Foreign Policy File, D770180–0937) According to the aide-mémoire, “Early last February, at the meeting with Under-Secretary Habib referred to above, Ambassador Shen was given to understand that the new administration was prepared, at an opportune moment, to reiterate the United States position of maintaining diplomatic relations with the Republic of China and abiding by the commitment under the Mutual Defense Treaty of 1954. In this respect it would be reassuring to the Government and people of the Republic of China, if the United States Government could make a pronouncement reaffirming that position.” (Telegram 2942 from Taipei, May 20; National Archives, RG 59, Central Foreign Policy File, D770181–0084.) For the February 14 meeting between Habib and Ambassador Shen, see Document 10.
  5. See Document 54.