Foreign Relations of the United States, 1981–1988, Volume I, Foundations of Foreign Policy

271. Information Memorandum From the Director of the Policy Planning Staff (Solomon) to Secretary of State Shultz¹

Washington, April 22, 1986

SUBJECT

• Time to Reactivate Relations with China

SUMMARY: You have urged us “not to go to sleep” regarding relations with China, and to avoid drift in our policy toward Asia. We should take some steps to inject more focussed activity into our dealings with China, defining clearly for ourselves a strategy and tactics to make the relationship serve our interests in the region. The timing is right, and there are opportunities in upcoming exchanges to impart new momentum to our China policy, especially in relation to the continuing Soviet military buildup in Asia and regional security issues (primarily Korea and Indochina). END SUMMARY

Soviet Regional Gains Require a Response; China is the Key

In contrast with most places around the world, the Soviet Union is slowly improving its position in Asia, particularly in Indochina and on the Korean Peninsula. Although China remains fundamentally at odds with the USSR, nonetheless Beijing’s aloofness from strategic cooperation with the US has lessened Moscow’s anxiety about our potential for coordinated security activity with China. We need to think about how to reverse these developments, starting from the strong position we occupy in the region.

It is imperative that we shape our dialogue with the Chinese to address our common concern with preventing or reducing Soviet inroads. The Chinese ultimately will have to be involved if we are to achieve any lasting stability on the Korean Peninsula or a settlement in Cambodia. By working with the Chinese we stand to increase our chances of avoiding unfavorable outcomes in Korea and Indochina; and by being seen by Moscow to enhance our cooperation, we complicate Soviet plans for future adventures.

Make US-PRC Military Cooperation Serve Our Goals

Our military cooperation with China has had an unfocussed quality. We react to Chinese “wish lists” for technology or weaponry rather than define our own objectives in such security cooperation. The place to start in defining what we want out of such cooperation is our common concern for an adequate defense against the buildup of Soviet forces in the Far East and Pacific.

At this early stage of our security relationship with Beijing, and given the state of the China-Taiwan issue, it is not at all clear, for example, why we are getting involved in the modernization of China’s navy, an activity that troubles our allies and friends. Our focus should be, instead, on intrinsically defensive common measures such as air defense warning systems (to counter the Soviet Backfire threat).

The Time to Move Is Now

China has tried unsuccessfully in recent years to use diplomatic carrots to prompt the Soviets to act on Beijing’s security concerns—removal of the “three obstacles” associated with the Soviet military encirclement of the PRC.² To date, the Chinese have found the Soviets totally unresponsive to their security concerns, yet they have given Moscow the appearance of an improvement in Sino–Soviet relations: trade is up, political tensions are lower, and the Chinese appear to be more forthcoming than the Soviets.

Since late last autumn, the Chinese have sharpened their criticism of the Soviets. It is now in China’s interest to make itself less “available” to Moscow, shore up relations with the West, and build pressure—the stick—for Soviet concessions. Beijing may also believe that having gone as far as it did to normalize relations with Moscow, it gave away too much and now needs to restore some balance in its dealings between the US and USSR.

Our own activity in US-PRC relations has flagged since the high points of 1983–84, culminating in the President’s trip to China. It is time to inject some clear purpose into our high level conversations lest they become mere hollow exercises.

Upcoming Exchanges Can Be the Starting Point

Your visit to Korea,³ Vice Premier Yao Yilin’s impending trip to Washington,⁴ and the subsequent visit to the US of PRC Chief of Staff Yang Dezhi⁵ present opportunities to freshen our thinking on the China relationship and start things moving.

Your trip to Seoul will help to activate consideration of Korea-related issues, including the North–South dialogue, possible US dealings with the North, etc. Given growing Soviet involvement with the North Koreans, the Chinese are dropping their facade of indifference and showing real concern in private. We share a mutual interest in working this problem, and your visit to Seoul is an occasion to look for ways we might engage with the Chinese more constructively on the future of the Peninsula.

When Yao is in the US, a meeting with the President⁶ can convey symbolically our sense of the importance of the China connection. The President might, for example, express to Yao his determination to overcome opposition to Senate passage of the Bilateral Tax Treaty.⁷

Your meeting with Yao can communicate where we want to see the relationship go over the next year or so:

— You might tell Yao of your interest in visiting China sometime in the early part of 1987.

— Our differences with the Chinese over Cambodian strategy should be aired again, stressing our inability to work with the Khmer Rouge, yet our interest in working with the Chinese in developing a longer term approach to Indochina which will work toward our common goal of eliminating the Soviet presence in Vietnam. As part of this effort, we have to be prepared to do more ourselves to support the non-communist resistance.

— We should also propose working together more closely against the Soviet military threat in Northeast Asia, and to weaken growing Soviet influence in North Korea.

At the same time, the Chinese should not be left in doubt about our unhappiness with their condemnation of our attack on Libya,⁸ arms sales to Iran, and actions promoting nuclear proliferation in South Asia.

When General Yang visits, our military can present our view of the priorities in the US-China relationship. These might include Over-The-Horizon radar data sharing to deal with the common threat posed by Soviet Backfires. We can inform him or, preferably, someone lower ranking in his party, of our willingness to join with Chinese experts in SDI research projects of mutual benefit, despite Beijing’s rhetorical posture against weapons in space.

The Strategic Picture

By using the tools and opportunities at our command, we can impart more direction and momentum into the US-China relationship. This will restore us to the “swing” position in the US-USSR-China strategic triangle that we occupied in the 1970s, given the fact that both China and the USSR have more to gain from positive relations with us than with each other.

Our assertion of the lead will also demonstrate to the Chinese our determination to pursue shared interests with them. And, as we deepen the relationship with China in areas of mutual advantage, we give Beijing added incentives for restraint on the Taiwan issue.

1. Source: Department of State, Executive Secretariat, S/P Files, Memoranda and Correspondence from the Director of the Policy Planning Staff to the Secretary and Other Seventh Floor Principals: Lot 89D149, S/P Chrons 4/1–30/86. Secret; Sensitive. Shultz’s stamped initials appear at the top of the memorandum. In the top right-hand corner, Shultz wrote: “Let us have a good discussion with Win Lord when he is back here.” A typed transcription of Shultz’s notation bears the date April 24. Quinn initialed the memorandum and wrote “4/22.” “CJ” (presumably Cozetta D. Johnson, S/S) initialed the memorandum for Platt and wrote “4/25.”
2. See footnote 5, Document 242.
3. Shultz was scheduled to travel to Seoul, May 7–8, following the G–7 Tokyo Economic Summit meeting (see footnote 8, Document 269). Documentation on his discussions with Chun and other senior South Korean officials is scheduled for publication in Foreign Relations, 1981–1988, vol. XXXI, Japan; Korea, 1985–1988.
4. In telegram 1508 from Beijing, January 22, Lord indicated that after a working luncheon “I was taken aside by Zhang Wenpu and Li Baocheng (Director and Deputy Director respectively of the Department of American and Oceanian Affairs, Ministry for Foreign Affairs). Zhang wished to tell me informally that the Chinese would like to have Vice Premier Yao Yilin visit the U.S.” and noted, “Zhang thought mid-May would be convenient for him if it were also for the U.S. side. The Chinese would be coming to me officially concerning this visit in a few days.” (Department of State, Central Foreign Policy File, Electronic Telegrams, D860212–0023, D860208–0460, D860051–0921) Yao was scheduled to visit Washington, May 14–17.
5. Scheduled to take place in May.
6. The President met with Yao on May 15 in the Oval Office from 11 until 11:35 a.m. (Reagan Library, President’s Daily Diary) The memorandum of conversation is scheduled for publication in Foreign Relations, 1981–1988, vol. XXIX, China, 1984–1988. In telegram 173099 to Beijing, June 2, the Department sent a synopsis of the meeting, noting: “The meeting was essentially a courtesy call, but there was a good exchange of views. The President emphasized the importance he attached to continued development of U.S.-Chinese relations and the value of these high-level exchange visits. He reviewed U.S.-Chinese relations, stating that they are mature, broad-based, and genuinely friendly. He suggested that efforts be directed at expanding areas of consultation and cooperation to increase common interests and minimize differences. He also briefed the Vice Premier on the meetings in Bali and Tokyo. He noted that the US is determined to work for a lasting improvement in relations with the Soviet Union. The President assumed there would be a summit by the end of this year, as Gorbachev agreed.” (Department of State, Central Foreign Policy File, Electronic Telegrams, N860006–0148)
7. During the President’s 1984 trip to China, he and Zhao signed a bilateral tax agreement to encourage private investment. (Lou Cannon, “President Calls for ‘Friendship’: Reagan Signs Pacts on Exchanges and Taxes in Peking,” Washington Post, April 30, 1984, pp. A1, A19) For the text, see Tax Agreement With the People’s Republic of China: Message from the President of the United States, 98th Congress, 2d Session, Treaty Document 98–30 (Washington: Government Printing Office, 1984). As of April 1986, the Senate had failed to ratify the treaty. In May, James Baker traveled to Beijing and negotiated with Chinese officials changes to the treaty designed to limit benefits accruing under the treaty. (“China and U.S. Agree To Close a Loophole In Plan for Tax Treaty,” Wall Street Journal, May 12, 1986, p. 14) The Senate ratified the treaty on July 24. Documentation on the treaty is scheduled for publication in Foreign Relations, 1981–1988, vol. XXIX, China, 1984–1988.
8. On the evening of April 14, U.S. air and naval forces launched a series of strikes against various targets in Libya.