Canberra, 28 October 1970

Secret

The China Issue–Australian Policy

The Secretary recently instructed us to prepare for submission to you a comprehensive study of the abovementioned question, looking beyond this year's vote in the United Nations and examining the options open to Australia to adjust itself to the growing balance of world opinion in favour of recognition of Communist China and its admission to the United Nations.

2. A thorough and definitive paper will take a lot of work and several weeks to prepare and it would be desirable to clear the general layout and thrust of the paper before the detailed drafting commences.

3. I should be glad to know whether the attached scheme of arrangements would have your approval. The Acting Secretary² agrees generally with it, subject to a reference to Korea in paragraph 6 and the inclusion of some discussion of the disputed or ill-defined territorial boundaries of China.

[NAA: A1838, 3107/38/20, i]

Attachment

AUSTRALIA'S POLICY ON THE CHINA ISSUE

The purpose of this submission is to provide an outline of a proposed Cabinet paper, reviewing Australia's policy on the China issue.³ The review would take some time to prepare but could be ready in December. The proposed outline of the paper is as follows:–

Background

2. A brief summary of the history of Australia's policy towards Formosa and Communist China would be given. There would be lengthier annexes–including trade statistics. It would be pointed out that the last formal Cabinet submissions specifically reviewing diplomatic and political policy were in 1955 and 1958 respectively. Various submissions on trade matters were made subsequently, but, following a Cabinet decision in 1958 not to diverge from U.S. political policy on China,⁴ our own diplomatic policies on China became increasingly inflexible–especially after the intensification of the VietNam conflict.

The Need for Review

3. The strong internal and external reasons for a complete review of established policy reasons would be explained. Within Australia, public opinion has changed markedly. A recent poll showed that, since 1969 at least, more people (49%) were in favour of recognizing Communist China than were opposed (35%). Opinion on Taiwan seemed unfocused; but more (40%) were opposed to replacing Taiwan by Peking in the United Nations than were in favour (13%). The strong trend of opinion in the media and among (responsible) academics on these issues also needs to be noted.

4. The main changes in the international scene that create a need for review of existing Australian policies are as follows:–

(i) The U.S. is seeking a relaxation of tension with Peking. There has been little response from Peking. Progress is likely to be slow; but a change in the status of the ROC (e.g. in the UN) or in the wake of a VietNam settlement could accelerate developments.

(ii) Canadian recognition is likely to be followed by recognition by other countries–e.g. in Europe, Africa and Latin America.

(iii) The position at the UN is changing. It is generally held that, even if the Albanian resolution were defeated this year, it would not be held next year. There is serious doubt about the possibility of holding the line for the ROC in the UN next year.

(iv) Communist China is becoming more interested in the outside world. This greater interest could presage greater militancy but might also create opportunities that should not be ignored.

The Problems

5. Three separate problem areas may be discerned:–

(i) the off-shore islands;

(ii) the status of Formosa and the Pescadores and the recognition of Communist China; and

(iii) UN representation.

Current Australian Policy

6. The public presentation of current Australian policy on these three problem areas would be summarised. In 1955, the Prime Minister said that the off-shore islands were quite different from Formosa and that Australia did not consider them worth a great war. In 1958, Cabinet decided not to diverge from US policy. Our policy, affording de jure recognition to the ROC, would need to be explained. The bases of our non-recognition⁵ of Communist China (its unco-operative international attitude, and the rights of the people of Taiwan) would be explored. The position at the UN (with the ROC represented in the Security Council and the General Assembly), the implications of the UN resolutions, and likely developments, and Australian policy thereto would be summarised.

Question of Change in Australian Policy

7. The arguments for and against change in Australian policy need to be considered in the light of (i) the attitudes of the countries chiefly involved; (ii) Australian national interest; and (iii) the chief options available.

The Attitudes of Other Countries

8. There are two chief determinants of what is possible:–(i) the attitudes of Communist China and the ROC, and (ii) the exigencies of the international situation at the time, especially as reflected in the attitudes of the US and Japan.

9. The attitudes of Communist China, the ROC, US and Japan would be explored. Both Communist China and ROC claim to be the governments of all China, including Taiwan. Both have been strongly opposed to a Two China or One China One Formosa solution. However, the possibility of tacit acceptance for an interim period of greater or less duration of a One China One Formosa situation should not be excluded. US policy used to be based on containment of Communist China and firm support for the ROC. It still retains a defence commitment to the ROC; but, as already noted, it is seeking an improvement of relations with Communist China. It would like to establish diplomatic relations if this were possible. Chinese development of nuclear missiles makes détente imperative in the long term. Japan's policy has been equivocal. It recognises the ROC but trades with both and seeks to avoid provocation of Communist China. It does not wish to lag behind the US in improving relations and regards the problem of China as one to be solved in this decade. Without indicating its preferences in options, it has sought to avoid foreclosing options. (The attitudes of other Asian countries could be briefly summarised and explored more fully in appendices.)

Australia's Interest

10. Australia's national interest on the China issues would be examined in the light of the maintenance of the security of Australia and the preservation of peace and stability in the region. The role of Communist China as a source of subversion in South East Asia and the question as to whether it is a direct threat would be examined. This would involve some examination of the Korean war, the Sino-Indian conflict, and Communist China's policy in Indo-China. A possible aim of Australian policy in keeping China and Japan separate (and indeed as counterpoises to each other) would be examined. The effect of recognition on the region, especially on the divided states, would need to examined. The question of the moral and strategic importance of Taiwan would require examination.

The Nature and Meaning of Recognition

11. The nature of recognition would be explained. The usual requirements are effective control, a regime with prospects of permanency, and a willingness and capacity to carry out international obligations. However, recognition is not a favour or concession, but a practical act of self-interest.

The Chief Options

12. The chief options available would be identified, with the pros and cons argued. These options are as follows:–

(i) maintenance of present policy with same or changed (improved) rationale;

(ii) a Two Chinas concept;

(iii) a One China, One Formosa concept;

(iv) unreserved recognition of Communist China;

(v) a negotiated settlement between Communist China and the ROC;

(vi) movement to an intermediate position of greater flexibility, on both the recognition and UN issues, so that we can move backward or forward as necessary.⁶

13. We would not wish at this stage to pre-judge the final content of our submission. The facts and the arguments need to be set out fully before they can be explored and soundly judged. In addition, we would need to consult with other Departments.

14. However, it would seem to us that what the submission is all about is the need for change in policy because of changes in internal and external circumstances. Our policy towards Communist China (representing 750 million people) and the Chiang Kai-shek group (representing one and a half million mainlanders, at first ruthlessly imposed on Taiwan–but now perhaps better integrated) has always been based on the needs of the US alliance in the short-term–but US policy is changing, and the short-term is running out.⁷ So far as any 'final' solution of the China problem is concerned, the fact is that it will be dependent on a settlement outside our control–and on the attitudes of those chiefly involved. However, we may perhaps be able to facilitate the emergence of some tacitly accepted interim arrangement. A Two China solution (or less unrealistically, a One China, One Formosa concept) seem to us to have been excluded as a possibility for formal endorsement and acceptance (but not perhaps as an interim solution) by the declared attitudes of the ROC and the PRC.⁸ Direct negotiation between the ROC and Communist China is feasible, after the death of Chiang Kai-shek, especially if the West looked like abandoning Taiwan. Unreserved recognition of the PRC (except in circumstances of the direst necessity) seems to us to be undesirable because of our publicly declared policy over the years, especially our advocacy of the human and political rights of the people of Taiwan. The real necessity for us is to find a position of a new short-term kind, which is sufficiently flexible for us to be able to adjust to events, and a policy which sets out our interest in the context of circumstances and events over which Australia has little influence.

A Possible Programme of Action

15. Assuming that the submission recommends movement towards an intermediate position of greater flexibility, it could conclude with positive recommendations to accomplish this goal. Such measures might include:–

(i) the avoidance of provocation of Communist China (and the Republic of China) in public statements;

(ii) simultaneous reference in any public statements on the China issue to the rights of the people of Taiwan;

(iii) close consultation with the US and Japan;

(iv) encouragement of thoughts in Taiwan to rejection of the dream of return to the Mainland in favour of more realistic conceptions of the future;

(v) reassurance of the people of South East Asian countries that abandonment of the ROC would not be abandonment of Taiwan or them;

(vi) consideration of the need for quid pro quos from Communist China;

(vii) a close study of immediate possibilities in the UN;

(viii) the laying of the ground for the development of a constructive dialogue with Peking (after the pattern, initially at least, of the Sino-US talks in Warsaw);

(ix) relaxation of trade restrictions;

(x) subject to security requirements, the cautious encouragement of limited contact and exchanges of scientists, academics, and journalists, etc., with Communist China.

A.J. Eastman

First Assistant Secretary

Division II

[NAA: A1838, 3107/38/20, i]

1 A.J. Eastman, First Assistant Secretary, Division 2, Department of External Affairs.

2 K.C.O. Shann.

3 An annotation by McMahon on the cited copy reads: 'Approved–subject to amendments noted in margins. WM 28/10'.

4 Reference to this 'decision' may involve a broad interpretation of a cablegram approved by Cabinet during the offshore islands crisis of 1958. Part of the cablegram, dispatched in Menzies' name on 16 September, read: 'It seems to me to be a case in which nothing we say or do should embarrass the U.S.A. or encourage the Communist Chinese to press on with aggression, or help to create a belief that Western policy is one of appeasement and periodical retreat, or advertise differences between friends'. For context, see footnote 2, Document 74.

5 An annotation by McMahon on the cited copy here reads: '+what advantage would it bring us. + what disadvantage'.

6 An annotation by McMahon on the cited copy here reads: 'Yes'.

7 An annotation by McMahon on the cited copy here reads: 'This is not the most prudent way to put it. Rather we must proceed on the basis that we review all the circumstances in order to decide what action should be taken in our best interests–no change may be needed and there may be variations between the extremes'.

8 An annotation by McMahon on the cited copy here reads: 'This savours too much of the Plimsoll/Freeth statement. It is politically unwise and I doubt if we could "facilitate the emergence". Handle this with sensitivity'.