Canberra, 20 December 1950

761. Top Secret Immediate

For Officer from Spender

Korea

Your telegram 1135.¹

Now that Committee of Three has been appointed to determine whether it is possible to effect a cease fire and, if so, the basis on which it may be arranged, it is essential that members of the United Nations actively lending aid to the Republic of Korea should re–examine the present situation and exchange views on the issues which Korea presents. This is necessary it seems to me whether or not the 'cease fire' can be effected on the possibility of which prospects do not appear too hopeful.

2. The terms upon which a cease fire is likely to be achieved can best be explored by the Committee. I think, however, it is desirable that the cease fire should be kept within the limits of the Korean dispute, that is to say, the question of recognition of the People's Government or the disposition of Formosa should not be included amongst the actual terms or conditions of the cease fire. This, however, does not mean that if a cease fire can be arranged on terms limited to present Korean hostilities, there should be no discussion at all of, or no undertaking to discuss, other issues such as Formosa and recognition upon which agreement might be reached provided cease fire arrangements are successfully worked out. Agreement on other issues would depend upon the attitude of the People's Government on the narrower and immediate issue of Korea.

3. It seems to us that, without appeasement, the Peking regime could be told that, if a satisfactory settlement regarding Korea, as indicated above, can be achieved, countries which have not recognized Communist China would be prepared to examine the whole question immediately. If, on the other hand, the People's Government by their actions show that they are determined to be intransigent, then it would seem that concessions to that Government will not be likely to secure peace, but will only lead to further demands and further aggressions. Consequently it is important to have it conveyed clearly to the People's Government how much their own conduct will determine the course of events not only on this matter but on others as well.

4. The question of the acceptance of the Peking regime [as]² the legitimate representative of China in the United Nations is, however, a separate matter from their claim to Formosa. In considering the problem of Formosa, it is essential, in the first place, to determine whether it is strategically vital to deny the use of Formosa to a possible enemy. We must distinguish between what is vital and what may be desirable. In considering what is desirable, the degree of desirability must be weighed carefully against all the consequences of denying Formosa by military means to the People's Government. If Formosa is strategically vital, it follows that it must not be allowed to become available for use in a military manner by the Chinese Communists or the Soviet, i.e. that it must be effectively neutralized in a military sense. In the second place, it is necessary to bring home to the Peking regime that areas like Formosa will not be surrendered to them as a reward for aggression and that, if the People's Government desire to achieve stable conditions in the Far East and to have their proper aspirations examined dispassionately, they must first demonstrate that they are prepared to forego the use of force and to act in accordance with the principles and purposes of the United Nations Charter.

5. So much depends upon the Peking regime's own conduct. It would be unwise it seems to me to assume that Chinese Communist action in the Far East is quite unconnected with Soviet policy. If an agreement were made to transfer Formosa to the People's Government without any effective means of demilitarizing it we could be confronted with a position in which Formosa could be used (in conjunction with Soviet threats) as a base against Japan. Formosa in a real sense could as well outflank the Philippines[. I]f³ the Chinese Communists were able to extract this price for their aggression they would certainly draw the inference that aggression pays, with consequences in Indo–China and elsewhere.

6. Accordingly, it is essential to have a correct military appreciation of the value of Formosa and the means by which Formosa may be demilitarized. If it were contemplated that the Cairo Declaration should be given effect to by ceding Formosa to the People's Government now or in the immediate future without any effective guarantee, and one capable of being enforced, being obtained from the People's Government we would have no assurance that Formosa would not be used as a base for further aggressive action. If, on the other hand, effective demilitarization of Formosa can be brought about, it is possible that the transfer of sovereignty to the People's Government (assuming that it has been recognized by that time) might prove much easier.

7. In dealing with the question of recognition of the People's Government the question of timing may be all important. If it had not been for the Korean dispute and Chinese Communist complicity and participation in North Korean aggression, the question might well have been resolved long before this. Her own conduct has complicated the position. We should however seek to induce the Americans to adopt a less emotional approach to the question. In my view the Chiang Kai Shek Government is a phantom government, and, short of world disturbances or a continental war in China, it has no chance of ever again becoming the Government of the Chinese mainland. Subject to the question of timing, tension could be relieved were the U.S.A. and others prepared as a first step to withdraw recognition from the Chiang Kai Shek regime. I fear that the intention of the Nationalist Government is not to resolve international difficulties but to exacerbate them, and that the Nationalists have a vested interest in a world war

8. This raises the question whether, at an appropriate stage, the U.S.A. and others should not take the necessary action to de–recognize Chiang Kai Shek, even if we do not at the same time recognize the Peking regime. Admittedly, this is a difficult proposition, because Chiang Kai Shek's forces occupy Formosa and general de–recognition of Chiang Kai Shek could well lead among other things to a defection among his own forces and adherence by them to the Peking regime. Such possibilities would have to be given their due weight in determining whether it would be possible to neutralize Formosa in a military sense and would have to be borne in mind during discussions.

9. It seems essential that all countries which have any contact with the Peking regime should, over the next week or two, bring pressure to bear with a view to making the regime understand that, if they fail during this short period to give evidence of their readiness to impose limits on their own international objectives and if they fail to show in practical fashion their readiness to settle disputes peacefully, they will run the gravest and immediate risk of plunging the world into World War III.

10. The atmosphere that must be conveyed is that we will not allow ourselves to be pushed by aggression into a settlement but that, if the People's Government are prepared to conduct themselves in accordance with the principles of the Charter, they will, by their own actions, facilitate their acceptance into the United Nations and make possible a widening area of agreement. If the People's Government of China is determined to try to drive the United Nations into the sea, that is to say to make war upon the United Nations, it seems to me that there can be no escape from the fact that they must be branded as aggressors. What action should follow such a decision, however, requires the most careful consideration. There would have to be a most realistic examination of what steps the United Nations can effectively (repeat effectively) take. This no doubt would involve consideration of global strategy.

11. The above merely summarizes my present thinking and should be used by you with discretion. I realize the difficulties that confront the United States especially those of an internal political character. In exploring the ground it is necessary to make sure that the United States does not feel either that we do not stand with them in their difficulties or that we fail to understand them. On the other hand if the above views are sound, we should use them as a basis on which to influence the United States and other countries concerned.

12. I should welcome your comments and full information as to the results of any soundings you make on the basis of the views expressed above.⁴

[NAA: A1838, 852/20/4/2, i]

1 5 December. It had reported that the General Committee of the UN General Assembly had recommended to the General Assembly that the US–sponsored item on Korea (for the resultant resolution, see footnote 3, Document 22) be placed on the Agenda and referred to the First Committee.

2 Word missing in the cited copy.

3 It appears that a full–stop and capital letter should have been inserted here.

4 The cablegram was repeated to London, and was followed next day by a request from Spender that Bevin be informed of its contents. Spender noted that, in making the request, he was mindful of the 'urgency and importance of influencing thinking as to how the Korean issue can be solved so that the present risk of an extension of hostilities in the Far East should be minimised'. He also stated that his views were 'tentative and put forward with a view to clarifying the issues'. On 22 December, E.J. Harrison, Australia's Resident Minister in London, conveyed Bevin's preliminary reaction, which was couched in broad terms. On Formosa, Bevin stressed that 'American feeling ... was hardening and it was now felt [by them] that it should not be allowed to fall to Chinese communist and eventually Russian hands'.