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

59. Memorandum From Michel Oksenberg of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski)¹

Washington, September 23, 1977

SUBJECT

• China Policy in the Doldrums: Analysis and Measures for Minimizing Risks of Erosion in the Relationship

Summary: You will recall from PRM 24, Part I,² that the Vance visit to Peking³ primarily sought to implement Option One: Seek normalization and to advance our security, economic, technological and cultural ties if the opportunity seemed present. Our own circumstances mean Option One is being temporarily shelved while we garner support for the Panama Canal. Vance’s talks with Huang Hua during the UNGA will essentially attempt to consolidate the gains he made in Peking but not advance beyond them.

What comes after the Vance visit? State will bear the diplomatic burden of planning for that next round of discussions, presumably to be held in Peking through Woodcock. However, we are entering an uncertain era in Sino-American relations. We must examine ways to enhance the relationship through our international conduct—the President’s exclusion of East Asia from his trip and his inclusion of India is no help⁴—and through initiatives in the security, economic, and technology realms.

This memorandum analyzes the situation, suggests some specific steps to retain momentum, and proposes that a PRC meeting be called to focus on several key issues.

The guidelines for Vance’s September 29 meeting with PRC Foreign Minister Huang Hua have been set.⁵ They reflect a decision—whether consciously determined or not—not to move toward establishing full diplomatic relations with Peking during the coming five to six months. Vance will not seek to advance the normalization discussions beyond his Peking presentation, but will attempt to reinforce and consolidate the accomplishments of his trip. He will signal some flexibility on one key element of our presentation which aroused Chinese ire: the nature of our post-normalization representation on Taiwan. In Peking, Vance indicated we wished to retain non-diplomatic governmental representation in Taiwan, although we are prepared to settle for somewhat less than that. (How much less remains a matter for Presidential decision.) We deliberately had built bargaining flexibility into our position. Since we do not wish to retreat so swiftly, we will indicate that as a result of our visit, we understand the Chinese positions more clearly, that we are studying the matter, and that we will be back in touch. Vance also plans to dwell at length again on global issues—the Mid East, perhaps SALT, and the UNGA itself—and to repeat aspects of our normalization presentation to try to prevent misunderstandings about the seriousness of our intent. Finally, he will respond to the recent Chinese statements which have portrayed our stance as “regressive” and which have violated the confidentiality of our exchanges. He will not table a draft recognition communique.

I agree with this approach. We are not in a position domestically to absorb the normalization issue. Passage of the Panama Canal Treaty comes first, and raising the China issue would threaten that effort. It would be unwise for private discussions with Peking to race ahead of our domestic, public pronouncements. A gross discrepancy would be hard to keep totally secret and perhaps confuse the Chinese.

As a result, we are engaged in a holding operation, without a China policy in lieu of a focus upon normalization. In July, we had hoped by October to be narrowing our differences with Peking and to be preparing Congress and the public for a normalization agreement on mutually acceptable terms. We now face at least a four to six months hiatus on the normalization issue. While it is the only course available to us, we must be aware of its possibly serious and harmful consequences.

Although Vance will try to convince the Chinese of our continued earnestness, we should be prepared for an adverse Chinese reaction following the New York meetings. At worse, the Chinese may move toward a position of maintaining equidistance between the U.S. and the USSR, though they would be less likely to do so by moving toward the USSR than by moving away from us. At best, the Chinese will wonder whether our protestations of sincerity are genuine or serious. They may select from among these options to communicate their discontent and to prod us forward:

—They may continue and perhaps even intensify their critical comments about the Administration, claiming that we are not interested in normalization, that our strategy vis-a-vis the Soviets is ineffective, and that our foreign policy is worse than that of our predecessors.

—They may not appoint a replacement to Huang Chen when the PRC Liaison Office Chief returns to Peking in December.

—They may introduce irritants into the government-facilitated exchange program, as they did in 1975–1976, while expanding their non-facilitated contacts.

—They may extend many more invitations to potential political critics of the Administration (e.g., Rogers, Bush, Scranton, Kennedy, Jackson, and Zumwalt).⁶

—They may keep exports from the U.S. at their current low ebb, an unfortunate move for us since China appears on the eve of another round of turnkey plant purchases.

—They may heighten tensions in the Taiwan Strait through more active patrolling of the air and through a troop build-up in the provinces opposite Taiwan.

—They may hint that PRC–USSR relations might improve and even take small, largely symbolic steps in that direction.

This is not a fearsome list of possible immediate PRC reactions. Further, the two major risks which would alter our approach—a military engagement in the Strait and Sino-Soviet rapprochement—are unlikely to occur in the next five to six months.

Perhaps the most serious risk we run is that during the six month period, the Chinese will conclude that we are not serious about normalization, which in turn could affect their global strategy. If they make such a judgment, it will be difficult to elicit a response at the time we are prepared to move forward. They may have adopted a mind set of waiting for a new Administration and posture themselves accordingly. In that case, the “window” will have closed. My own visceral feeling—a feeling widely shared by many China specialists—is that this is very likely to occur. The Chinese style is to make basic judgments about a person’s or government’s true intentions; once a conclusion is reached, it becomes very hard to reverse. In fact, one major reason for not tabling a draft communique is precisely to save that move for the moment when we will wish to have a maximum impact upon Chinese opinions about us—when we are indeed ready to normalize and desire a favorable Chinese reply.

Going into a holding pattern on normalization incurs domestic risks as well. For one thing, the Taiwan lobby will be emboldened to press their advantage. Moreover, in the absence of a general China policy, it becomes bureaucratically difficult to advance the relationship. Each step, each initiative, has to be fought on its individual merits. CIA China NIO Jim Lilley was able to join the George Bush trip only when Stan Turner talked to Cy Vance.⁷ An effort to monitor and curtail joint defense exercises with the ROC incurs the Pentagon’s counter-argument that such efforts are illegitimate attempts to make policy; our stated policy, DOD’s military planners correctly indicate, is enunciated in our still valid Defense Treaty with the ROC. An effort to facilitate the export of specific commodities or technologies which the Chinese have ordered for ostensibly peaceful uses becomes bogged down in bureaucratic routine; the items are subject to controls because some of their parts have defense applications. A search for a creative way to settle the claims-assets issue encounters resistance from legal obscurantists at Treasury whose careers are based on enforcing laws which inhibit settlement. In short, at a minimum initiatives that seek to implement the “spirit” of the Shanghai Communique engender debate because of honest differences over what the “spirit” means. At a maximum, they encounter insurmountable bureaucratic obstacles because the Communique has not been translated into the operative missions for most bureaucracies. Most departments still operate under guidelines that were based on pre-1972 China policy.

As a result of these considerations, it seems to me, the cutting edge of our policy concerns now involves these questions: How do we minimize the risks of an irreversible erosion? Can we maintain some momentum in the relationship in the security, trade, and cultural realms? Indeed, can we make normalization appear to be inevitable, though not necessarily imminent? Such a posture would give us time to generate political support without arousing opposition. And more specifically for the President’s October 4 meeting with Huang Hua,⁸ what can be said that can have a lasting value? [I’ll address this issue in my talking points for the President.]⁹

Another issue involves the policy process itself. No agency is currently addressing China policy in the terms which I have now posed. For all us China specialists at State, DOD, NSC, etc., “normalization” has been seen as “the long bomb,” the way to hit pay dirt quickly. Temporarily, at least, we’re going to have to try to move on the ground, three yards at a crack. I frankly think that in this context, the burden will increase for the NSC and me in particular to seek and push the initiatives. I trust I will have your continued backing.¹⁰

One important way of fostering Chinese respect is to sustain the posture we established in Peking of conducting ourselves with integrity and self-respect. This means not promising more than we now feel confident we can deliver on normalization (such as by secretly promising normalization before 1980) and not pandering to their anti-Soviet biases. Kissinger adopted this course and it eventually backfired. We must avoid creating expectations we subsequently do not meet, to face intensified charges that we owe them a debt. At the same time, we need not apologize for the internal difficulties we face on normalization. The Chinese should realize that just as they have their principles, we have ours—namely, the cumbersome but democratic procedures which we intend to follow in the making of our foreign policy. We expect them partially to accommodate themselves to our principles, as we are prepared to do for their principles. As a result of this consideration, in their discussions with the Chinese, neither the President nor Vance should refer to the domestic scene as an excuse for our not normalizing, though Vance¹¹ may wish to note the importance of accurately understanding the complex and protracted process of government in which we have such pride.

Secondly, we will have to behave with discipline. If and when the Chinese become acerbic and/or distort the record, we will be tempted to set the record straight. I hope we will be able to avoid indulging ourselves and to handle our public commentary well. The President in particular will have to display forbearance by not castigating the Chinese during a period when they may be attacking him.¹² Most important, we will have to avoid characterizing the Chinese position or indicating normalization is an issue about which we can afford some patience. This may be true, but only so long as we do not appear complacent.

During this interim period, even in the face of possible domestic criticism from both pro-Peking and pro-Taiwan elements, we will not be able to say very much or defend ourselves at length. I personally think, for example, that it would be unwise for any extensive Congressional testimony to be offered on China policy. (Holbrooke is currently scheduled to testify publically at Wolff’s China hearings in early October.¹³ I am encouraging him to speak only in executive session.)

How we behave globally will be a third, crucial determinant of our ability to sustain and cultivate our China connection. The President has said China is an important element in our total foreign policy; operational significance must now be given to that statement. Should Carter meet Brezhnev outside Washington, for example, in selecting the meeting place, we should take into account Chinese reactions. A meeting in the Pacific, which symbolically acknowledges the Soviet’s Pacific role, would be less desirable than a meeting in Geneva or Vienna. A Mid East settlement which would assign the Soviets a significant role in helping maintain the peace would contradict all our explanations to Peking of the rationale of our policy: to exclude Russian influence. Progress toward an Indian Ocean naval limitation agreement would also prove disquieting. In short, during the Sino-American hiatus, if signs of Soviet-American cooperation and creation of a U.S.–USSR condominium far exceed signs of Soviet-American competition and rivalry, the Chinese will be more tempted to establish an equidistance between the two super-powers. This suggests we must now be more attentive to the Chinese dimension on such issues as SALT, MBFR, the Indian Ocean, and the Middle East. Continued discussions with the Chinese about our global policies will also be imperative.

Finally, we will wish to undertake several collateral measures for enhancing the relationship. The dangers with the collateral measures absent progress on normalization are first that the Chinese will react negatively on the grounds we are trying to have our cake and eat it too and second that some of the individual measures could induce Congressional opposition. The total list of possible initiatives is by now well known to you. Here are the specific items which I now recommend we undertake:

—Move to settle the claims/assets issue by not pressing the Chinese for the $17 million contribution they had earlier promised, and by searching for imaginative ways internally to get a forty cent on the dollar settlement (e.g., by seeking interest from banks which held the blocked assets in interest free accounts and by reducing the value of claims which have already been compensated through tax write-offs).

—Facilitate the flow of technology to the PRC. In particular, after a more careful look, one of the four items we earlier had designated for special study appears to merit immediate licensing possibly through Presidential intervention. The item is used for aerial surveying and involves scanning and tape recording equipment.¹⁴

—Reduce our military presence on Taiwan by drawing forces down from the current 1000 to 500 by April 1. General Brown has indicated this goal can be met and he does not object to it.

—As part of our effort to reduce the scope, size, and frequency of our military activities on Taiwan, cancel all scheduled Lark/Eagle/Blue Sky joint military exercises with the ROC for 1978. These exercises are not really “joint;” rather, they involve U.S. jets based in South Korea and Japan and on aircraft carriers testing the ROC air defense system.¹⁵ The exercise does not involve enough jets to approximate a PRC air attack, nor would we wish it to. We should encourage the ROC to develop a capability of testing its own air defense system. This can be done.

—Instruct members of our NATO staff to establish contact with the PRC military attache in Brussels and give him a briefing on current NATO defenses and exercises, including Reforger. (DOD prepared a memorandum on this initiative at my request. It is at Tab A.)¹⁶

—Permit Mort Abramowitz of DOD/ISA to invite Ambassador Han Hsu for lunch.¹⁷ Talking points would cover PRM 10 and Presidential Directive 18, as described in the New York Times.¹⁸ This would be the first contact between the Liaison Office and DOD and would occur at the appropriate level. If the meeting went well, it could lead to a Secretary Brown–Huang Chen meeting and/or a visit by a DOD official to Peking.

—We might wish to look at our weapons sales policy to Taiwan. The issue here is whether we should link weapons sales to progress on normalization. That is, as a means of securing leverage over Taipei, are there any sales or transfers we should seek to hold up because there is no progress toward normalization? The idea obviously would be to indicate to Taipei that they will bear some costs in the event momentum on normalization is lost. The arguments against are that we wish to accelerate arms sales prior to normalization so the island is well supplied and that restriction of sales would heighten Taipei’s anxieties about our intentions.

Some of these issues ought to be the object of a PRC meeting, particularly whether to push for a claims/assets settlement (Treasury and State have interests here), whether to draw down our Taiwan military personnel, whether to ease technology transfer to the PRC, whether to engage in symbolic security cooperation measures, and whether to alter our weapons sale policy toward Taiwan during the normalization hiatus.

Beyond these specific initiatives, we also must decide how to integrate PRM 24, Part III (Technology Transfer to the PRC) with PRM 31. PRM 24, Part III is now in penultimate draft, is close to inter-agency clearances, and will soon await a PRC meeting. It adequately addresses the China side of the technology transfer issue. Hence, PRM 31 need not develop another set of options with respect to technology transfer to the PRC.¹⁹

Recommendation:

That you allow Mort Abramowitz to invite Han Hsu for lunch.²⁰

That you instruct me to draft a memorandum from you summarizing this paper to Cy Vance and that you instruct him to prepare an options paper for a PRC meeting to discuss the five questions I raised above.²¹

1. Source: Carter Library, National Security Affairs, Staff Material, Far East, Oksenberg Subject File, Box 56, Policy Process: 9–12/77. Top Secret; Sensitive; Exclusively Eyes Only. Sent for action. At the top of the page, Aaron wrote, “ZB—This has some good ideas. DA 10/3.” To the left of Aaron’s comment, Brzezinski wrote, “MO. See my comments + let’s talk. ZB.”
2. See Document 32.
3. See Documents 47–52
4. Carter visited India, Saudi Arabia, Egypt, France, and Belgium January 1–6, 1978.
5. Vance and Huang Hua actually met on September 28. See Document 62.
6. Three prominent Republican former officials had all planned visits to China in the fall of 1977: Ambassador George H.W. Bush, Secretary of State William Rogers, and Governor William Scranton. (Telegram 222362 to Beijing, September 16; National Archives, RG 59, Central Foreign Policy File, D770336–0129)
7. In Lilley’s memoir, he describes Department of State opposition to his participation in Bush’s delegation. (China Hands, p. 200)
8. Next to the reference to the President’s meeting with Huang Hua, Inderfurth wrote, “Now cancelled. RI.”
9. Brackets in the original.
10. In the margin near the end of this paragraph, Brzezinski wrote, “Yes.”
11. Someone crossed out “President” and wrote, “Vance.”
12. In the margin, Brzezinski wrote, “Why?”
13. Representative Lester Wolff (D–New York) was Chairman of the House Subcommittee on Asian and Pacific Affairs.
14. In the margin, Brzezinski wrote, “develop memo.”
15. In the margin, Aaron wrote, “I disagree. DA.”
16. In the margin, Brzezinski wrote, “I agree.” The memorandum is not attached. A memorandum from Harold Brown to Brzezinski, stamped October 4, proposes that “members of the NATO staff brief the Chinese on the NATO initiatives program and recent NATO exercises to include Reforger. If appropriate, the briefing might conclude with an invitation to the PRC to either send a military delegation to tour NATO or observe future exercises.” (Carter Library, National Security Affairs, Brzezinski Material, Agency File, Box 4, Defense Department: 10–11/77)
17. In the margin, Brzezinski wrote, “invite deputy.”
18. On July 11, William Safire discussed PRM 10 in his New York Times column (“PRM–10 and Era-Two,” p. 19). PRM 10, February 18, is entitled “Comprehensive Net Assessment and Military Force Posture Review.” PD 18, August 24, is entitled “U.S. National Strategy.” Documentation on PRM 10 and PD 18 is scheduled for publication in Foreign Relations, 1977–1980, vol. IV, National Security Policy.
19. In the left margin next to this paragraph, an unidentified person (probably Inderfurth) wrote, “General policy guidelines developed by PRM 31 should apply to China. Specific China options, however, should be left to PRM 24, Part III.” The executive summary of the paper prepared in response to Part III of PRM 24 is Document 67. Documentation on PRM 31, August 18, entitled “Export Control of US Technology,” is scheduled for publication in Foreign Relations, 1977–1980, vol. III, Foreign Economic Policy.
20. Brzezinski checked the Disapprove option and wrote, “invite deputy.”
21. Inderfurth underlined “PRC meeting,” and wrote, “The PRC meeting could combine a discussion of PRM 24 Part III (technology transfer) with the five items Mike mentions. Rick.” Brzezinski checked neither the Approve nor Disapprove option.