Canberra, 16 June 1955

Top Secret

The Situation in East Asia–Formosa and the Recognition of Communist China

Australia has a prime interest in the success of efforts to find a way of living at peace with Communist China. A great many issues are involved in bringing this about: renunciation of force to settle differences; a cease fire in the Straits ofFormosa; determination of the future of the off–shore islands; more effective operation of the truce agreement and unification in Korea; non–intervention in Indo–China; release of prisoners in China; trade between Communist China and non–Communist countries; the future of Formosa; recognition and representation in the United Nations. Of these the most significant issue between the West and Peking is recognition.

The Present State of the Peking Government's Diplomatic Relations with the World

2. The Peking Government is recognized by 28 countries, 17 of whom are members of the United Nations. About 60 other states, including 43 members of the United Nations, do not recognize Peking. Among the more important recognizing governments are–the United Kingdom, the Soviet Union, India, Pakistan, Burma, Netherlands, Norway, Sweden, Yugoslavia, and Indonesia. The most important of the non–recognizing governments are–the United States of America, Canada, Australia, New Zealand, France, the Philippines, Thailand, Turkey, Belgium, West Germany, Italy, Japan, and all the states of Latin America.

Efforts to have the Peking Government Represented at the United Nations

3. Representation in the United Nations was first raised by the Peking Government in a telegram to the President of the General Assembly in November, 1949. It has frequently been an issue since that date, having arisen in the Security Council, at all subsequent sessions of the General Assembly, and in all other committees and agencies of the United Nations. The defeat of a Russian proposal to seat the Peking Government in the Security Council on 13th January, 1950, led to a series of Soviet walk–outs which ended in August 1950, after the United Nations had taken its decisions to resist aggression in Korea. In recent years the issue has been avoided by resolutions to postpone consideration of it. It is likely that it will a rise in a more acute form at the next Session of the General Assembly in New York in September of this year.

4. The main arguments which have been made against seating the Peking Government in the United Nations have varied according to the circumstances. In the early stages it was argued that Peking did not have the support of the majority of the Chinese people, but subsequently the main argument was based on Chinese actions in Korea (where it was condemned by the United Nations as an aggressor) and in Indo–China. Most recently Chinese threats against Formosa have been argued as showing that the Peking Government is not prepared to abide by the principles of the United Nations. While Russia has consistently argued in favour of the admission of Peking, many people feel that the failure of her efforts has not unduly disturbed Soviet leaders as it has continued the diplomatic isolation of Peking from the West.

The Attitude of the United States Toward the Peking Government

5. Up to a few months ago, stated United States policy was to put such pressure upon the Peking Government as to bring about a change in the nature of the regime. In recent months President Eisenhower and Mr Foster Dulles, partly under the influence of a Democratic Congress and pressures from influential critics at home and abroad, have turned away from this policy. However, the purposes of United States policies continue to be–

(a) To avoid any action which appears to recognize belief in Communist China's willingness to conform to normal international practice and to carry out the principles of the United Nations Charter.

(b) To convince others that they have cause to fear Chinese expansionist intentions, and to build up confidence in the ability of the Western alliance, including American strength, to resist that expansion.

(c) To bring into being military arrangements for dealing with Chinese Communist aggression (e.g., through SEAT0).²

(d) To maintain the political prestige of the Nationalist Chinese Government, which is seen as–

(i) the principal victim of the Communist military revolution;

(ii) the actual (or potential) rallying point for the loyalties of the overseas Chinese in Asia.

(e) To give confidence to Asian Powers (such as Japan) in a policy of withholding concessions from the Chinese Communists.

(f) To demonstrate that Communist aggression yields no fruit.

(g) To maintain the economic isolation of Peking from the non–Communist world, hoping thereby to bring about friction between China and the U.S.S.R. and to limit the extent to which Communist China can develop aggressive power.

(h) More generally, to demonstrate to peoples in countries where Communism is bidding for power that being Communist will incur the hostility and lose the cooperation of the rest of the world.

(j)³ To maintain Formosa as part of the island chain defence system.

(k) To prevent large numbers of non–Communist Chinese now on Formosa being handed over to Communist vengeance.

(l) To deter the allegiance of many millions of overseas Chinese in South East Asia from Peking.

6. The United States is therefore likely to remain opposed to recognition and the acceptance of Peking as the 'China' which is a member of the United Nations and permanent member of the Security Council.

7. It must be remembered that the Peking Government is still, as far as the United Nations is concerned, an aggressor, and subject to embargoes on strategic materials. The United States can be expected to oppose any variation of these decisions of the United Nations. United States opposition to Peking is also given concrete form in the Manila Treaty, which could not have come into existence if the United States had not been willing to accept military commitments under the treaty.

8. However, Western policy towards China as conceived by the United States has not been wholly successful. The United States have themselves departed from what was an original major objective of their policy–namely the exertion of such pressures as to cause a change in the nature of the regime. The pressure so far exerted has if anything strengthened the Communist regime. The United States Administration seems to have come to the conclusion that the policy of hostility to Peking short of all out war cannot bring about a change in the regime on the mainland. This represents a far–reaching change in professed United States policy, though it has long been clear that responsible authorities in the United States did not seriously contemplate an invasion of the mainland by Chiang Kaishek, unless the Communists themselves launched a major war.

The Changed Attitude of Peking

9. Since the Korean war Peking's policies have developed and changed, more particularly in recent months. What motivates Peking we do not know. All we can say is that it is common prudence to assume that her relations with the rest of the world will be determined fundamentally by Communist theory, and by hostility to Western (more particularly American) influences and defence positions in Korea, Japan, Formosa and Indo–China on the periphery of China; that Peking is in a mood of exaggerated nationalism and confidence in her own strength. What she has done in the past 24 months may be no more than tactical moves to achieve definite strategic and political advantages at the expense of the free world. She began by conceding some points in the Korean Armistice, and agreed to a cease fire in Indo–China on terms which were probably no better than could have been gained by continuation of the conflict. At Bandung Chou En–lai conformed to some principles which were not altogether to his advantage. But, all in all, it can be said that the gestures, the softer diplomacy, and the current abstention from threats against Formosa are perfectly consistent with an overall objective of acquiring Communist ends by diplomacy, subversion, and a weakening of the will to resist later aggression. They are consistent, on the other hand, with a genuine desire for a policy of live and let live. What Western policy makers have to decide is whether in the face of these changed tactics their policies should remain static and unyielding; or whether they must pursue different policies which do two things:

(a) Provide the means of testing whether China's policies will be genuinely directed towards a satisfactory long term modus vivendi, and

(b) Yield nothing advantageous if in fact efforts prove that China is currently seeking no more than a tactical advantage in a long term bitter struggle with the democracies.

The problem for the West is to endeavour to find policies which will enable us to serve both these objectives simultaneously.

The Attitude of the Free Asian Countries Towards Peking

10. Of the free Asian nations, India, Pakistan, Ceylon, Burma and Indonesia recognize the Peking regime, while Japan, South Korea, Thailand and the Philippines do not. While India, Burma and Indonesia adopt a neutralist attitude towards Peking in the East–West struggle, Pakistan, Ceylon, Thailand and the Philippines have adopted a positive attitude of opposition towards Communism. The strength of this positive attitude may have been somewhat modified by Chou En–lai's moderation at Bandung.

11. On the other hand, of these nations that withhold recognition from Peking, few are likely at present to extend recognition unless given a lead by the United States.

How Peking Government Could Gain Entry into the United Nations

12. The question of seating Communist China in the United Nations can arise in the Security Council, General Assembly, or any other United Nations body but is likely to present itself next as a practical question at the outset of the corning General Assembly.

13. The 'Republic of China' is an original member of the United Nations and (under Article 23)⁴ a permanent member of the Security Council. It is very doubtful whether many countries would argue that terminology in itself could operate as a bar to seating the 'People's Republic of China' (Peking) in place of the 'Republic of China' (Formosa).

14. The seating of Communist China is not a question of the admission of a new member but of recognition of the change of regime of an existing member and acceptance of its credentials. Therefore the provisions of Article 4 (about being a peace–loving State, etc.) do not apply to the case. Nor does Article 4's requirement that the Security Council first recommend admission.⁵ Therefore there is no veto in the sense of the Security Council 'killing' the Communist Chinese seating proposal before the question reaches the General Assembly.

15. If the question comes up in the General Assembly some countries will argue that the credentials question can be decided by a simple majority vote of members present and voting. The United States, however, argues that this would be a 'question of importance' requiring a two–thirds majority in favour. The Assembly could decide by a simple majority that it was a 'question of importance' and the United States would probably press for such a decision.

16. At the last Assembly Session a majority of 43 to 11 with 6 abstentions decided (21st September, 1954) 'not to consider at the Ninth Regular Session during the current year any proposals to exclude the representatives of the Government of the Republic of China or to seat the representatives of the Central People's Government of the People's Republic of China'. I spoke in favour of this resolution on behalf of Australia. It might be noted that this resolution referred to the latter Government as such, not merely to 'the Chinese Communist regime'.

17. If the General Assembly decides by a simple majority that the question is one of importance and then fails to approve by a two–thirds majority the seating of Communist China, we will not be in quite the same position as at present (relying on a moratorium formula to stall off an actual vote on the merits), since the Assembly would have taken an actual vote on the merits and refused to seat the Communists. Reversal of this decision would be most unlikely until the succeeding Assembly session a year later.

18. If the General Assembly (whether by a simple or two–thirds majority as the case may require) decides in favour of seating Communist China, it will be so seated and Nationalist China representatives as such will be excluded. This pattern of representation would then be followed sooner or later in all other U.N. bodies except perhaps the Security Council.

19. The question whether the veto can be applied in the Security Council is a question whether the matter is procedural or substantive. If procedural, the seating of the Peking Government would require only the affirmative vote of any seven out of eleven members. If substantive it could be vetoed, and doubtless Nationalist China would veto it even if the United States abstained. If the United States held that the matter were a question of importance in the General Assembly it could hardly hold that it was procedural in the Security Council. The possibility of a situation where one China was in the Assembly and the other in the Security Council cannot be entirely ruled out, although such a situation could hardly continue for long.

20. The present United States attitude is a reversal of the position under the Truman Administration when Mr Acheson took the view that a vote on Chinese Communist membership of the Security Council was not subject to the veto. Mr Dulles has, on at least one occasion, mentioned the possible use of the veto.

21. As Australia may be standing for election to the Security Council this year (and may as Council President some time in 1956 have to give a ruling on procedure) we may need to define our attitude soon on the question whether the matter is 'important' or not in the Assembly, and 'procedural' or not in the Security Council. Up till now the question has been academic because the matter has been continually postponed in United Nations bodies.

The Problems of Formosa and the Off–Shore Islands

22. There is little doubt that at the moment the main centre of tension between East and West lies in the Far East, and that it is focussed on Formosa. On the one hand, the United States–Formosa Mutual Defence Treaty of December, 1954, has committed the United States to the defence of Formosa. On the other hand, the Peking Government has repeatedly declared its intention to 'liberate' Formosa. If these two extremes are maintained and given effect to, the situation will lead to war. It is therefore imperative that ways should be constantly explored to lessen tension and seek a solution satisfactory to all concerned.

23. The problem of Australian relationships with China is similarly focussed on Formosa. The central feature of Australian policy in the area is that Formosa should be denied to the Communists. Legal arguments can be advanced to show that Formosa does not belong to China. These arguments are usually based on the idea of a vacuum of sovereignty arising from the action of Japan under the Peace Treaty in renouncing its claims without this sovereignty being specifically transferred to anyone else. It could be further argued that sovereignty in fact lies with the Commander–in–Chief of the Allied Powers in the Pacific and that its final disposition is not yet settled. The Government of Chiang Kai–shek could be described as the de facto government representing SCAP whose authority stems from the Cairo Declaration.⁶ But while this or any other of a series of legal arguments which have been put forward may be technically satisfactory they are entirely unconvincing to Peking and indeed probably to the majority of Asians. Moreover, the argument for Formosa being part of China can be plausibly advanced. The fact is that both Peking and Chiang Kai–shek, each for their own reasons, maintains that Formosa is under the Government of 'China'.

24. Australia's interest in the matter is clear. In the short run, if the worst came to the worst, we could find ourselves involved in war with China. Such a development would, apart from its physical consequences, have a fundamental effect on our future relationships with an Asia whose inclination is to find a modus vivendi with China and which in large part would be bitterly opposed to a war for the defence of Formosa.

25. It must be Australia's aim to achieve as much as we can of our political and strategic objectives by means short of war. In so doing it is important in the first place to separate the real issues involved from facts which, however unpleasant, are not going to be changed by any action we might take. The most important of these facts is the existence of a strong and apparently stable Communist Government on the mainland of China. This is something which we must accept as here to stay, and Western policies will have to be adjusted to the acceptance of this fact.

26. Australian objectives may be briefly stated as the preservation of Formosa as a separate non–Communist entity, and the preservation as a military force of the Nationalist Army until such time as it dwindles with age. We regard Formosa as being in the centre of an island chain of defence running from Australia to Japan. We do not regard the off–shore islands of China in themselves as an appropriate casus belli, but we realize their significance in relation to morale on Formosa and the effect of giving them up on attempts to encourage Formosa and possibly other areas in Asia to resist Communist encroachment. Basically our objective is to persuade the free peoples of Asia, both in Formosa and elsewhere, to resist Communism both internally and externally.

27. On the Chinese side, while claims to Formosa have recently been less bellicose than formerly and it even seems possible that the Chinese Communist Government will avoid war in the immediate future and consequently avoid invasion of Formosa just now, the basic claim remains. As a result of the visit of Krishna Menon⁷ to Peking, Chou En–lai has told the United Kingdom Charg� d'Affaires in Peking⁸ that he is hopeful of diplomatic talks with the United States leading to direct negotiations, either bilaterally or through a conference of a number of powers. He has re–affirmed his refusal to sit down at a conference table with Chiang Kai–shek, although he has hinted at the possibility of direct negotiations between Communist and Nationalist China. But however Chou En–lai may play his cards, and for the moment it seems clear that he proposes to play them peacefully, it would be unsafe to assume that Communist China is not determined to have Formosa in due course and perhaps before very long. Airfield construction to provide jet fighter cover for any Communist attack in the Straits is proceeding.

Relationship of Australia to Question of Formosa

28. In determining what we should do to maintain as much of our objectives as possible, the first judgment that has to be made is how long the present situation can go on, i.e. a situation in which the United States, ourselves, and other important governments recognize Chiang Kai–shek as the Government of China and are virtually committed to the defence of Formosa. In the first place, it is unlikely that the off–shore islands at any rate can be indefinitely denied to Peking. If they are not so denied and if the dream of a return to the mainland is taken away from the Nationalist authorities, is there a possibility that, no matter how much we may wish to preserve Formosa as a strategic entity, it will collapse from within? If members of the administration and armed forces can see no future for themselves except on Formosa, will they eventually decide to throw in their lot with Peking in order to return to their homeland? Probably this will not happen in the short run but it is more than a possibility in the long run.

29. The achievement of our objectives must be related not only to the internal situation in Formosa, but to the effects of inevitable recognition of Peking and her acceptance in the United Nations. What would be the effect of recognition and representation in the United Nations on morale in South East Asia and Japan, on the strength of SEATO, and on the general influence of China in the area?

30. Some of these matters will be discussed later, but in general the disadvantages flowing from our recognition and acceptance in the United Nations in relation to the matters listed above would not in themselves be very great. However, the attendant loss of status for Formosa and uncertainty about its future which would arise from general international acceptance of Peking will be a serious matter. The problem is the facing of the inevitability of recognition and acceptance in the United Nations and, at the same time, endeavouring to minimize its effects on Formosa. In the present situation, too much delay in facing the facts of life about Peking might result in the Chinese Communists being able to cultivate support because of the anomalous and 'unjust' international situation in which she finds herself. But at the same time there is no point in our recognizing Peking if Peking will not accept this recognition unless it covers sovereignty over Formosa also.

31. The separation of Formosa from the problems of the mainland is therefore important. There are several ways in which this objective might be sought. The basic difficulty lies in the fact that both Chou En–lai and Chiang Kai–shek will be very difficult to convince that Formosa is not a part of China. Negotiations seeking to develop the idea of two Chinas would seem to be doomed from the outset. It is possible that some sort of solution of the problem might be sought through the United Nations, perhaps by a process of attempting to define the boundaries of China as not including Formosa. This, however, would be extraordinarily difficult and there are dangers in encouraging the United Nations to define boundaries in this way. Perhaps the United Nations might endeavour to reach a solution by means of trusteeship. The problems of discussion of this question in the United Nations are many and debates in New York might lead to majority support for courses which are, for the time being, unacceptable to us; such, for instance, as demilitarization of Formosa without compensatory undertakings by Peking.

32. The basic need to separate Formosa in some way from the mainland has been behind recent Australian proposals on the matter. Australia has put forward two proposals. The first was a suggestion that Australia, the United Kingdom, Canada and New Zealand and as many other countries as practicable might, in a joint declaration, offer a military guarantee that the status of Formosa would not be determined by force. The object of such guarantee was to enable the withdrawal from the off–shore islands to take place in such a way as–

(a) to sustain morale in the Army and the present Government on Formosa and the belief that they will have an assured independent existence;

(b) to prevent the spread of fear in Asia and the loss of confidence in the ability of the non–Communist world to resist the spread of Communism by force.

The guarantee would not be aimed at propping up Chiang Kai–shek or his regime. It would be conditional on Formosa not being used for attacks on the Chinese mainland or the coastal islands; the declaration announcing the guarantee would be worded so as not to affect in any way the claims of the parties concerned; and the way would be left open for an eventual settlement of the status of Formosa on the basis of the freely expressed wishes of the inhabitants.

33. This proposition did not meet with a favourable response, except from New Zealand which felt the guarantee should be on as broad a basis as possible and not confined to Commonwealth countries; and, to a lesser extent, from the United States. The latter, however, did not think that as an immediate step it would do the trick. In any event, a decision by the United States would largely depend on the views of the Chinese Nationalists. To the United Kingdom the guarantee was unacceptable.

34. On 27th April, Cabinet agreed that as a four–power conference would probably be held, it might perhaps be extended by the attendance of Communist China at discussions on Asian matters.

35. This proposal has not progressed very far because of the unwillingness of the United States to extend to the Chinese Communists the prestige and international standing which would accrue to them if they were included in what would in effect be 'Big Five' discussions.

36. The present situation may be described as one of 'wait and see', with some diplomatic activity in Peking, and various reports of the perambulations of voluntary negotiators.

37. Krishna Menon (India) has already visited Peking and is now on his way to Washington vis⁹ London. He is not thought to be a useful go–between so far as the United States is concerned. Dr Ali Sastroamidjojo, Prime Minister of Indonesia, has been in Peking. U Nu, Prime Minister of Burma, who during his visit to Peking in December, 1954, said that he was willing to bring about an understanding between the United States and China, will be visiting the United States in June. He has stated specifically that unless requested by both parties he will not himself raise the question of Chinese–American relations.

38. Meanwhile the United States, according to Mr Dulles, is not 'rushing ahead' to follow up Chou's recent statements. The main thing in his opinion at present is to gain time to let the de facto cease fire continue. The United States, he said, considered that the longer it continued, the harder it would be to break. It considered that its tactics had produced a situation much less dangerous than existed two or three months ago.

39. Our own immediate objective continues to be to enable the Chinese Nationalists to withdraw from the off–shore islands and the Americans to disentangle themselves without seriously affecting anti–Communist morale in Formosa and the rest of Asia. We feel that a cease fire by tacit consent rather than negotiation cannot necessarily be regarded as enduring. There are real dangers in sitting back and waiting for the Communists to move. It is important to make use of the atmosphere created by the present de facto cease fire whilst the influences which have brought it about still obtain.

40. There are indications that public opinion as represented by the Australian press would welcome any early get–together of the parties concerned. The Sydney Morning Herald (24th May) has pointed out that although Chou En–lai made his offer a month ago, there was still a delay in holding a conference which both sides apparently desired. The Melbourne 'Age' (23rd May) has criticized the part being played by Australia in acting on Chou's offer, and submitted that we should make the most of this opportunity.

Diplomatic Recognition of Peking and Entry into the United Nations

41. The opportunities for settlement of the Formosa issue and Far East tension now appear greater than they have ever been. There seems, however, to be a clear need for a fresh initiative on the part of the West. The present delay in offering a counter–proposal to Chou En–lai provides the Communists with excellent propaganda.

42. The decision that we and others face, so far as recognition and representation in the United Nations are concerned, is perhaps now one of timing rather than one of principle. Some people think that Peking will succeed in displacing Taipeh in the United Nations this year. On the whole this is probably not likely. Continued United States opposition can be taken for granted and she would put very great pressure on a large number of countries, particularly the Latin Americans, to see that Peking is kept out.

43. But whether Peking succeeds in securing her place in the United Nations sooner or later, we are still faced with our own decision on recognition. This raises a series of difficulties which need looking at. The first is the effect on our relations with the United States. Intimate relations with the United States are fundamental to our security.

44. Probably no time will be a good time from all points of view to recognize Peking, but if we can decide that there is no overwhelming reason why we should not do so it remains to act in concert with our friends in this matter and extract if possible from the act of joint recognition as much as we can. It might be unwise to go ahead with recognition without at least attempting to extract some quid pro quo, as it can be argued that there are overwhelming reasons against approaching recognition in isolation and not as part of a wider settlement. It is conceivable that the offer of a series of important recognitions might be the means of persuading China not to insist on her claims to Formosa for the time being. If we go ahead and recognize without making some stipulations there is the possibility of risk of our lending support in practice to the justice of China's claims to occupy Formosa, and the fact that resistance to this by for instance the United States would appear, in Asian eyes particularly, as aggression.

45. We must consider carefully what will be the effects in Asia of general recognition of Peking. Brief reference should perhaps be made to the position of overseas Chinese. These have always had a certain pride in their homeland, no matter what the complexion of government. Many still feel this pride. However, whatever their present feelings towards the present Government, they must by now have realized that the Peking Government has come to stay and that recognition by other governments is merely a matter of time. In any case, in so far as they look to the homeland, overseas Chinese look to the mainland, not to Formosa, whatever the Government. It seems rather unlikely that the act of recognition itself will have any serious effect on the morale or loyalties of these people.

46. So far as the effects of recognition on anti–Communist Asia are concerned, on balance it is probably correct to say that the act of recognition would be advantageous. Anti–Communist Asian leaders well–disposed towards the West are probably more embarrassed than helped by the unreality of our present policy. It is even possible that action to recognize may result in a greater willingness on the part of some countries, e.g. Indonesia and Burma, to cooperate with us and pay regard to our views on other matters. We are separated from such countries by fundamental differences of policy. The removal of the issue of recognition might mean the removal of one of the obstacles to our influencing them.

47. So far as the Nationalist Chinese are concerned the effect of recognition cannot be anything but bad. Coming on top as it may of the surrender of the offshore islands it may well have a very serious effect on the morale and will to resist of Chiang Kai–shek's Government. But if recognition is inevitable this is something which is going to have to be faced sooner or later. In the meantime we are courting the danger of prolonged bad relations with Peking, and enabling Peking to attract sympathy because of what is widely regarded as injustice in her present situation.

48. The Five–power proposal which Australia has put forward as one possible way of solving the Formosa problem is tantamount to recognition of Peking. The continued absence of formal recognition only maintains an unreal situation which has now persisted for the last 18 months to 2 years. During that period, whenever matters of real moment have arisen in the area, the West has consulted the Peking Government. In particular, there was the 1954 Geneva Conference during which talks, in which Chou En–lai himself took part, were held on Korea and Indo–China. Even the United States has directly through its own consular representatives and indirectly through the United Kingdom Charg� d'Affaires in Peking, negotiated with Peking on such matters as American Nationals in China. More recently, the Chinese Communists took part in the Asian–African Conference at Bandung as an equal with some thirty other countries, some of which do not recognize it, and some degree of success by Chou En–lai has been acknowledged by all participants. In the result then Peking is playing a part in the world councils, although it has not as yet been accorded formal status as an established government and an acknowledged member of the United Nations.

49. Is recognition of Communist China a surrender to force? It is widely argued in the United States that, to use the American expression, 'China has not purged herself of aggression'. We can ourselves remain suspicious of Chinese intentions, and we can dislike the methods that Peking has used both internally and externally, but we are probably only making trouble for ourselves in the future if we are to continue to confuse our dislike of a government with the legal concept of recognition. Moral considerations have got themselves so involved in the problem of recognition of China that unless we take the step of clearly denying that they are relevant we will never recognize.

50. Can we get over the problem of the effects on morale in Formosa of the action we are probably going to have to take? There seems little doubt that morale will be greatly affected but we may, by means mentioned above–action in the United Nations, negotiations to separate the issues, persuasion of Peking to defer its claims, etc.–manage to provide that morale is not affected to the point where it endangers our basic objective of the maintenance for the time being, in the interests of our own security, of a free Formosa.

Some Possible Courses of Action

51. There would seem to be considerable value in seeking a solution jointly of the problems of Formosa and the related issues of recognition of Peking and its admission to the United Nations. There appear to be two possible approaches by Western countries collectively:

(a) by following up our proposal for some form of 5–power talks, and then using this as the occasion for a joint approach to the question of recognition, with recognition perhaps being used as a bait for a peaceful solution of the Formosa problem in the United Nations at a later date;

(b) of according recognition and from that position seeking collectively a
solution of the Formosa problem.

Neither of these approaches is likely to commend itself to the United States, which at this stage is both unwilling to take part in 5–power talks or to recognize China.

53. It remains therefore to decide what approach will best serve Australia's interests. In the first place, without United States concurrence, five–power talks are impossible. In the second place, it is certain, particularly after the Bandung Conference, that the question of China's admission to the United Nations will be raised at the next General Assembly.

54. If some solution of the Formosa question could be found or its final disposition postponed by agreement with China as part of negotiations concerning recognition, the problem of Chinese representation in the United Nations would be greatly simplified.

55. With Communist China in the United Nations, a cease fire will stand a better chance of success. In one important respect, it will be much more difficult for China to flout the United Nations as bogus and lacking any legal authority–an attitude for which countries like Indonesia show sympathy. The moral pressure on the Communists to use peaceful means to solve the Formosan problem would be considerable, and their resort to non–peaceful measures would lose them many Asian friends, whom they undoubtedly wish to retain. It would be possible to approach the Formosa problem through the United Nations, to which approach the United States would find it difficult not to subscribe.

56. Australia should not come out alone in favour of recognition. There is the possibility, however, that something might come of secret discussions between the United Kingdom, Canada, New Zealand and ourselves, not by telegram but face to face at a fairly high level with a view to determining a common policy on the timing and content of our decisions as regards Communist China prior to an approach to the United States. Arising from such a meeting a joint and obviously fairly influential approach might then be made to the United States so that they might be persuaded not to sit pat but to follow up Chinese desires for bilateral talks, even if for the time being such negotiations were unlikely to reach any great conclusion. A policy of drift may be a dangerous policy. A de facto cease fire will be much easier to break than one which has a more formal basis.

Conclusion

57. It is clear from the foregoing that the recognition of Communist China is not a question that can be considered in isolation from other questions affecting security in the Far East. Perhaps the real problem to be tackled initially is the easing and removal of tension in the Formosan area.

58. The situation in the Formosan area will not remain static–whatever the Western powers think, the Communists will be active and the situation will change. Our general objective is to prevent the outbreak of hostilities and at the same time prevent any weakening in the defence position of the non–Communist world in this region. This weakening can come from loss of support for present American policies no less than from unwise unilateral concessions to Peking in future. In any negotiations the West must be prepared to make concessions to the Chinese Communists. Our objective would be to maintain and strengthen the political and moral basis of the Western defence alliance in the area so that in the United Nations as well as on Formosa itself the alliance will have a substantial degree of support. We should aim to get from the Chinese Communists a renunciation of the use of force against Formosa, effective supervision of the entry of arms intoNorth Korea and similar assurances. In return for the foregoing we must be prepared to contemplate concessions to the Chinese is such ways as lifting the present United Nations embargo on strategic exports to the mainland. Concessions which should be considered are the recognition of the Peking Government and its admission to the United Nations–admission to the United Nations if possible on terms which would secure for the Government on Formosa also a seat in the United Nations and international support for its independent existence despite the fact that the Communist Chinese claim sovereignty over that Island.

59. As discussions develop with the Communist Chinese these points may well emerge. If no agreement is reached the West will have demonstrated its desire for peace. But it would not be wise to consider extending recognition diplomatically and in the United Nations in advance of an attempt to reach a settlement on a wider range of issues. In any case Australia should not consider recognition by itself but only in coordination with recognition by a number of other countries.¹⁰

R.G. CaseyMinister for External Affairs

[NAA: A4906, xvi]

1 In a teleprinter message to Tange dated 6 June, Casey commented on an earlier departmental paper that he instructed should form the basis of a draft Cabinet submission. He suggested that the draft Cabinet submission commence with a statement of the PRC's diplomatic relations with the world and then address Soviet efforts to facilitate its entry into the United Nations. He instructed that the draft submission discuss US attitudes towards the PRC and Chou En–lai's recent statements, the attitude of 'free Asia' towards recognition of the PRC, the procedures for the PRC's entry into the United Nations and the status of Formosa and the Offshore Islands. He concluded: 'All this would lead up to belief that our Australian interests prompt us to seize appropriate opportunities to join with others in endeavouring to influence the United States towards a calmer and less hostile attitude towards Peking. Eventually Peking will get into the U.N. It is right that it should. We will do ourselves harm if we fight her entry beyond the time when Peking may be said to have "purged herself of aggression". If it is possible for some accommodation to be reached with Peking over Formosa (if anyone can think how this can be brought about) it would vastly facilitate Peking's entry into the U.N.'

2 A reference to the South East Asia Treaty Organisation, which came into existence on 8 September 1954 with the signing of the South East Asia Collective Defence Treaty (or Manila Treaty). The signatories were Australia, France, New Zealand, Pakistan, the Philippines, Thailand, Britain, and the United States. The Treaty committed the signatories to resist aggression by means of armed attack in the treaty area and also in Laos, Cambodia and 'the free territory under the jurisdiction of the State of Vietnam' which had been designated in a protocol to the Treaty.

3 Point '(i)' was omitted in the original.

4 Article 23 of the UN Charter names five permanent members of the Security Council, including the 'Republic of China'.

5 Article 4(2) of the UN Charter states that 'The admission of any such [peace–loving] state ... will be effected by a decision of the General Assembly upon the recommendation of the Security Council'.

6 See footnote 4, Document 19.

7 V.K. Krishna Menon, Chairman, Indian Delegation to United Nations, New York.

8 Con O'Neill, UK Charg� d'Affaires in PRC.

9 The word 'vis' should presumably read 'via'.

10 The associated Cabinet minute of 29 June reads: 'Cabinet discussed the issues raised by this submission very fully and concluded that no steps should be taken in the direction of or leading towards recognition of communist China'. In a note to Tange dated 29 June, Casey noted that the submission 'was well received as a factual and objective analysis of a very complicated series of situations'.