Canberra, 28 December 1954

While I was in Melbourne Mr. Casey told me that he had been proposing to make a speech with a section in it referring to the need to 'negotiate' with Communist China. This was to be a lead to the United States. He had refrained from doing so because he had realised that Australia needed Nationalist China's vote on the Dutch New Guinea issue and had deferred it to a later date.

There was not time to discuss the matter with him then but he agreed that I might send him a memorandum setting out some considerations against the proposal. I would ask you to look at the memo for two reasons–first, because you approved the original proposal (and text(?)); secondly, because the same sort of issue will come up on more than one occasion during your trip.¹

Not this proposal, of course, but in one form or other the question will be raised whether the Australian Government is confident that its present policy of opposing the expansion of Communist China throughout South East Asia is correct.

If this basic policy is to be changed, surely it should be done after full and deliberate Cabinet consideration.²

Attachment

SOME COMMENTS ON A PROPOSAL ABOUT CHINA

In 1950 the United Kingdom along with several other countries 'recognized' Communist China. But Communist China refused to follow this up by establishing normal diplomatic relations with the United Kingdom.³ Recently it has agreed to do so (but only by the rather left–handed method of agreeing to Charg�s d'Affaires and not Ambassadors). The United Kingdom has never supported the admission of Communist China to the United Nations. The United States and Australia have not recognized Communist China, have not exchanged diplomatic representatives and have not urged or supported her admission to the United Nations.

2. It is now proposed that some move should be made by Australia which would lead to a change in the situation. The move is not to urge Communist China's admission to the United Nations, nor to exchange representatives, nor even to recognize her. It is a proposal that in the course of a speech the Minister for External Affairs should make some remarks favouring 'negotiations' with the Peking Government. This, it is thought, will make it easier for the United States Government to make some further move favourable to the Chinese Communists. This move in favour of Communist China is, however, to be made on the understanding that it relates only to mainland China. Formosa and the Peseadores are to remain under the control of Nationalist China and Communist claims on Formosa are to be denied.

3. In support of this proposal it is urged that the conduct of international affairs is made more difficult so long as Communist China is not recognized and so it would be logical to change the situation. But this illogical situation has existed for some years now and during this time it has been said that recognition should not be accorded a power which has committed aggression beyond its borders–at any rate, not until it has shown evidence of more peaceable intentions. Australia was prepared to put up with the inconvenience and lack of logic involved in non–recognition because of these moral principles. The Communist Government of mainland China has not shown any evidence of a change of heart; why then should there be any change of policy towards it. Perhaps the inconvenience of non–recognition is being exaggerated? The United Kingdom Government had recognized Communist China during the whole of this period and yet the Chinese took no notice of this in attempting to arrange negotiation.

4. The proposal, if carried out, will do nothing to satisfy the aspirations of the Chinese Communists. They want recognition and Formosa as well. In fact, one of the reasons why they are pressing for recognition is that it strengthens their claim to Formosa. The proposal, therefore, will not lessen tension. What the Communists need to be brought to realize is that if they give up their claims to Formosa they have some hope of recognition. But the sequence is important–Formosa first, recognition later.

5. What will the United States think of the proposal? Part of the explanation of the proposal is the belief that the United States would be grateful for some such move as this. What action would the United States be expected to take? The United Kingdom has afforded recognition to Communist China and has not proceeded to support her admission to the United Nations. But this is hardly a practicable course for the United States. In the first place, the United States administration is not likely to invite public discussion twice on an issue which is not likely to add to its prestige at home. It will try to deal with the two issues, 'recognition' and 'admission' at the one time. And it is not likely to want to set off public discussion until it has the Formosa issue settled. A statement which places the United States' administration under the obligation of ignoring it (which it would probably do if it could) or of moving on the Formosa issue before it is ready is not likely to be regarded as 'helpful'.

6. Formosa not only has its place in United States' politics. It has an important place in the United States' defence system. Any weakening of Formosa weakens the island chain and especially weakens the defence of the Philippines. So any interference with the international status of Communist China in advance of agreement concerning the international status of Formosa will have an important effect on the strategic situation in the Pacific. Australia's own defence would be weakened if action were taken by the United States to recognize Communist China before the status of Formosa is settled.

7. Finally, the effect of recognition in areas even closer to Australia whose defence is of more direct concern to Australia must be considered. Consider Malaya and Indonesia. There are 3,000,000 Chinese in Malaya and 2,000,000 in Indonesia. In both countries they exercise a marked if not dominating influence over commercial life. In accordance with temperament and tradition they (along with others in South East Asia) are busy trying to pick the winner in Asia. Recognition of Communist China at this stage by the United States would serve formal notice on these millions that the Communists had won. A great increase in Communist pressure all through the area would result. 5,000 Chinese Communists in Malaya can hold down 100,000 troops now. Could Malaya be held at all if 3,000,000 Chinese were to decide that all was over bar the shouting! And how long could Indonesia maintain even its present ambiguous attitude?

8. Recognition of Communist China by the United States, and its admission to the United Nations is not to be determined by the legal tests of the 19th century. Indeed, if this were the test, the Communist Government of China should have been recognized long ago. The strategic interests of Australia require that the problem of the status of Formosa be settled before recognition is granted. And any temptation to move in the opposite direction should be resolutely resisted.

[NAA: A4940, C230]

AUSTRALIAN POLICY TOWARDS THE OFFSHORE ISLAND CRISIS

On 18 January 1955 a Chinese Communist force attacked and captured the island of Ikiang, a few kilometres north–west of the Tachen Islands. In announcing this 'victory', the Chinese Communist press linked the liberation of the coastal islands with the eventual liberation of Formosa. On 24 January, in response, President Eisenhower sent a message to Congress stating that the People's Republic of China had taken a series of provocative military actions, the declared purpose of which was the conquest of Formosa. Eisenhower stressed that the 'existing and developing' situation in the area of Formosa posed a serious danger to the security of the United States, of the entire Pacific area, and to the peace of the world. He believed that the situation was one of appropriate action for the United Nations but that it had become sufficiently critical in the meantime to impel him, without waiting for the United Nations, to ask Congress to 'participate now, by specific resolution, in measures designed to improve the prospects of peace'. Eisenhower explained that these measures contemplated the use of United States armed forces if necessary to assure the security of Formosa and the Pescadores. A joint resolution, embodying these measures, was approved by the US House of Representatives and Senate.

The Australian Cabinet discussed the Formosa situation on 28 January. As Casey explained in Cablegram 175 (28 January) to Menzies in London: 'Opinion was unanimous that, while Formosa and the Pescadores should be kept in non–Communist hands, off–shore islands present a different situation, and that Australia must urge restraint on United States. We are of course very conscious of the fact that if America got into a war we could not avoid being involved. It was also agreed that the best course was not to make any public statements on our policy just now'. At the request of the New Zealand Government, the UN Security Council met on 31 January 1955, to consider the issue of hostilities in the area of certain islands off the mainland of China. On the recommendation of New Zealand, the Security Council voted by a majority of 9 to 1 (Republic of China), with the Soviet Union abstaining, to invite the People's Republic of China to participate in the discussions of the New Zealand item. This invitation l1!as rejected on 3 February by Chou En–lai who argued that Formosa, the Pescadores and other coastal islands were all inalienable parts of China's territory, and that their liberation was 'entirely a matter of China's internal affairs'. Chou added that what was 'especially intolerable' was the fact that the People's Republic of China was still deprived of 'legitimate position and rights in the United Nations'.

Between 6 and 11 February the Republic of China evacuated its forces on the Tachen Islands leaving it in occupation of the Matsu island group near the port of Foochow, and Quemoy and its satellite islands covering the port of Amoy. In no circumstances, declared President Chiang Kai–shek on 14 February, would these groups of islands be abandoned. Meanwhile the Commonwealth PrimeMinisters, meeting in London, issued a statement on 8 February, that 'they were united in their conviction that it was necessary that incidents should be avoided while means were sought for a peaceful outcome'. Prior to this statement, Menzies wrote a letter to the US Ambassador in London on 4 February stating that: 'Discussions should proceed privately between the British Commonwealth countries and the United States regarding ways and means (by withdrawal of troops or otherwise) of keeping the "offshore" islands out of the area of armed conflict (either major or local), while firmly preserving the independence of Formosa and the Pescadores. At the same time India, for example, could use influence privately upon Peiping'.¹ Menzies later communicated to the UK Foreign Secretary, Sir Anthony Eden, a letter the text of which was conveyed to Canberra on 9 February (Cablegram 333). The substance of Menzies' letter to Eden was that neither Australia nor the United Kingdom wished to become involved in a war over Quemoy and that both the United States and the Republic of China should be persuaded that the latter should cede the offshore islands peacefully to the People's Republic of China. As Menzies put it: 'Is not sensible practical course for us quite privately to persuade Eisenhower to make it clear to Chiang Kai Shek that the offshore islands�are material only to an attack on the mainland and that America will support no such idea and that firm American protection of Formosa and its adjacent waters is worth far more to Nationalist China than any excursion with respect to the offshore islands which would enjoy little if any world support?'

1 Menzies departed for the Commonwealth Prime Minister's Conference in London on 12 January 1955.

2 On 6 January 1955, Cabinet considered that 'time was not opportune for any statement along the lines of that canvassed by the Minister for External Affairs'

3 A UK Charg� d' Affaires had been sent to Peking in 1950 but a reciprocal Chinese appointment was not made until 1954.

1 Foreign Relations of the United States, 1955–1957, vol. II, Washington, 1986, p. 212.