Canberra, undated

Top Secret Guard

[matter omitted]

Arguments For and Against Australian Recognition of the C.P. G.

FOR

(1) As the C.P.G. is the effective ruler of the mainland of China, there seems little reason from the legal viewpoint why we should not recognise the Peking Government as soon as possible. Recognition of a government, and its right to represent the nation in the United Nations (if the nation is a Member) does not imply either approval or disapproval of the regime concerned.

(2) It is very difficult to have any negotiations or reach any understandings with China unless we are prepared to talk to the Peking Government and regard it as a Government able to enter into commitments. One implication of the presence of the C.P.G. at Geneva will be, despite American denials, the accordance of de facto recognition, because we will negotiate with their representatives, and we hope they will enter into certain commitments regarding Korea.

(3) Non–recognition means that China has relations with the Soviet Union and other Communist countries only, and is cut off from the rest of the world, and there is no opportunity to exert influence on her.

AGAINST

(1) The attitude of the United States is a factor deterring us from deciding too quickly to recognise Communist China, in view of the importance of U.S. cooperation to our security. At present, Congressional and public opinion in the United States has forced the State Department and Mr. Dulles to take an extremely hostile attitude towards recognition and admission to the United Nations. An attempt to hurry the U.S. on this matter might only harden her position in opposition by forcing sweeping public statements.

(2) Even if Australia recognised Peking, she might be virtually ignored by the latter–as the United Kingdom has been–and there is not much point in our recognising Peking if Peking does not follow suit by agreeing to the re–establishment of normal diplomatic relations with us.

(3) The question of Formosa raises difficulties. For strategic reasons, we are not prepared to hand Formosa over to the Communists. Moreover, reservations can be made about recognising Chiang Kai–shek's regime as the Government of Formosa, since the Chinese are only a minority of the island's population, the Taiwanese being a different people. Solutions suggested regarding Formosa include–

(a) Two Chinese Governments might be recognised: one on the mainland and one on Formosa;

(b) Formosa might be placed under some form of Trusteeship. (The U.S., the Chinese Communists and Chiang Kai–shek would all oppose this move);

(c) The Nationalist Chinese might be admitted to the United Nations as a new Member (Taiwan or Formosa), being replaced in the Security Council by the Peking Government.

It seems probable, however, that the Nationalist Chinese representative could veto indefinitely any move in the Security Council to exclude his Government, and could be moved only by strong political pressure from the U.S., which is unlikely in the near future.

AUSTRALIAN ATTITUDE

Since the most recent Australian public statement on the question (Mr. Menzies, on 21st October last),² the position has somewhat altered: the question of prisoners of war in Korea has been disposed of, and the Geneva Conference may bring some modus vivendi for Korea. Nevertheless, the reasons given above for non–recognition still hold and there is no question of our recognising Peking at this stage. It may be useful, however, for Australia to exert a modifying pressure on the extreme position which the U.S. appears likely to take at Geneva on this question, especially as the United Kingdom and Canada may be willing to compromise with the Communists. One aim of the latter will be to split the U.N. side on this issue. A public difference on the question, should therefore, if possible, be avoided and Australia, while adhering to her present position of opposition to recognition, might work to this end.³

Trade with Communist China

[matter omitted]

AUSTRALIAN ATTITUDE

12. The Australian attitude takes due account of the origins of the restrictions. They were imposed while China was engaged in aggression. China has now ceased the shooting war in Korea, conditional upon her being allowed to retain a force, capable of immediate resumption of hostilities, in the centre of Korea. United Nations forces are there by right. Chinese forces are not. It may therefore be questioned whether there is any moral case for relaxation of trade restrictions any more than there is a case for unilateral withdrawal of United Nations forces. Moreover, the Chinese are actively supplying the Vietminh with equipment. It would seem hardly logical to step up the flow of supplies to China at a time when the successes of the Vietminh Army are being supported with Chinese supplies.

13. Australia believes that reconsideration of existing restrictions on trade with China should be considered only in the context of the negotiations at Geneva for a settlement in Korea and a settlement in Indo–China. There is no warrant for adjustment of the restrictions until the United Nations has had an opportunity of considering the matter in September this year. If we should find that the United Kingdom and a substantial number of other countries do in fact modify their restrictions, Australia must then consider how far her own commercial interests take priority over the above considerations. The subject will then be reviewed by the Minister and the Department of External Affairs in consultation with other interested Commonwealth Departments.

14. For Australia, the substantial number of applications received to export strategic goods destined for Communist China and the interest of Australian manufacturers and exporters in China as a market, would indicate that from a practical, commercial viewpoint Australia could not lag behind the majority of other countries, if a process of relaxation over exports to China were approved and subsequently implemented.

15. The Delegation should report any proposals made for the relaxation of restrictions, together with the views of the United Kingdom and the United States, in order that consultation may be undertaken with the interested Departments.⁴

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Formosa

The existing naval bases in Formosa are of value for naval operations on the China coast. There is scope for the development of air bases useful for attacks on the Chinese mainland and for support of maritime operations in the area. In enemy hands, Formosa would facilitate a Communist advance into the Philippines. In the hands of the Chinese Nationalists, it is a continuing threat to the Chinese Communists who find it necessary to retain substantial armed forces on the adjacent mainland.

[matter omitted]

[NAA: A816, 11/301/942]

1 In Berlin on 18 February 1954, the Foreign Ministers of the United States, the USSR, the United Kingdom and France agreed that a conference on Korea and Indo–China would be held in Geneva from 26 April. In the event, the Geneva Conference did not produce a settlement on Korea and nor did it, as Chou En–lai hoped, 'pave the way' for the 'international recognition of [the PRC's] rights', among which he included membership of the United Nations.

2 Menzies had said: 'In the circumstances, I will show no consideration whatever to the recognition of Red China. We do not arrive at conclusions about recognition of countries when we are engaged in hostilities with them'.

3 Casey discussed the Geneva Conference in Cabinet on 9 April. The notes prepared for use on that occasion, and approved by the Minister, read: 'We should not agree to bargain with the Chinese Communists on the basis of their agreeing to our terms for a settlement in exchange for diplomatic recognition and seating in the United Nations. Such matters are for later consideration, in the light of Chinese attitude towards both the Korean settlement. and other problems of Asia, particularly Indo–China ... Australia should avoid as far as possible any open breach with the United States on matters of detail, being aware of our overall security situation and the need for confidence in our relationships with the United States. We should, further, make it one of our primary objectives to prevent, as we have sometimes been able to do in the past, differences between the United States and the United Kingdom. Such differences might well arise over diplomatic recognition and representation in the United Nations'.

4 Casey's notes for Cabinet on the issue of trade read: 'Immediate lifting of the ban on strategic materials for China should not be traded for Communist concessions. Even if it were not necessary to have a long look at Chinese behaviour as regards Korea before such action, we must recall their relationship to hostilities in Indo–China. It would be folly to give them any assistance which might strengthen their aid to Ho Chi Minh'.