Canberra, undated
Secret
People’s Republic of China—Recognition
You asked that a balance sheet be struck of the advantages and disadvantages of Australian recognition of the People’s Republic of China (PRC).
2. In the light of the negative response which Fernandez has now received from the Chinese Embassy in Belgrade, it seems clear that sooner or later the choice is going to have to be made between recognition of the PRC and a continued diplomatic relationship with the Republic of China (ROC). We see no prospect of being able to have diplomatic relations with both the PRC and the ROC (or a Taiwan variant). There are no grounds for believing that international developments will lead the PRC to modify its position: on the contrary, some hardening is likely.
3. President Nixon’s announcement regarding his forthcoming visit to Peking has introduced an entirely new element into the balance, the full implications of which we will be unable to assess for some considerable time. Clearly, however, the announcement has increased our freedom of manoeuvre, particularly insofar as policy decisions have hitherto been circumscribed by the need to give close consideration to their possible effect on our relations with the United States.
Advantages of Recognition of PRC
4. The main political advantages of recognition of the PRC are as follows:
(i) Recognition would provide us with direct contact with China on matters affecting our bilateral interests—including trade, communications and consular matters. It would provide us with better information on China and enable us to present our political and economic interests to the Chinese.
(ii) In the coming years, the policies of the great powers in our region will be based less on cold war and ideological concepts and more on traditional considerations of national interest and security. The President’s announcement is indicative of this, amongst other things. At the same time, China’s development of nuclear weapons has made it essential for world survival that the United States and other great powers establish a modus vivendi, enabling China to participate in nuclear arms control measures and minimising the danger of hostile contact on the peripheries of Asia (e.g. South East Asia) becoming flash points for nuclear exchanges or major conventional wars. As the great powers, the United States, USSR, Japan and China, increasingly break out of the rigid moulds of the past, we should not deprive ourselves of political access to one member of this quadrilateral, whose actions and interactions will affect the future of our region so profoundly.
(iii) On the other hand, continued non-recognition of the PRC would mean that our policies would be progressively further out of step with international realities. China’s influence in international affairs will continue to increase. It will soon be a member of the General Assembly and Security Council, and the prospects of preserving a place for the ROC are becoming less and less bright, even should it be prepared to face the reality of its international position. PRC membership of the UN will greatly increase pressures for recognition in other countries. As time goes by, and diplomatically strengthened by wider international recognition, the PRC may begin to increase the cost and terms of recognition by Australia. Rather than facilitate matters, the passage of time could make Australian recognition more difficult.
5. The chief economic advantages of recognition of the PRC appear to be as follows:
(i) Countries that have recognised the PRC have not so far fared demonstrably better than non-recognising countries in trade with China, although they clearly expect to do so. (Italy and Canada, for example, have been engaged in extensive commercial explorations with the Chinese.) Japan and Germany, which do not recognise the PRC, have more substantial trade with China than, say, Britain or France. But the Chinese have publicly indicated that recognition will assist trade, and that, conversely, non-recognition will impede trade; and they are applying this approach to wheat purchases as between Canada and Australia.
(ii) As the Canadians and British have shown, recognition of the PRC need not impede trade with Taiwan. In any event, Australia’s trade with the PRC, when wheat is included, has been much larger (four times in 1969/70) than with the ROC.
(iii) Although the PRC is stressing Marxist principles of self-reliance in economic development, even a small increase in its demand could lead to an appreciable widening of our export opportunities. It has been pointed out that its total world trade has so far been less than that of Hong Kong and Taiwan; but now that the social and economic base of the country has been consolidated, its foreign trade need not necessarily remain limited. A country of 800 million people, with rising standards of living, must inevitably offer scope for greater trade in the long term—especially in such fields of Australian supply as primary products and metals.
Disadvantages of recognition
6. The chief political disadvantages of recognition might be seen as follows:
(i) Recognition of the PRC would represent a reversal of policy that could weaken our credibility with other friendly Asian countries and might induce panic reactions on their part.
(ii) Recognition might undermine the security situation, not only in Taiwan, but also in other non-Communist countries of Asia. Recognition of the PRC by Australia might also reinforce tendencies among Asian countries to make their own accommodation with Peking.
(iii) It could be argued that recognition of the PRC could strain our relations with the United States and Japan, perhaps on account of the factors mentioned immediately above.
7. These arguments seem to us to have lost much of their validity. In particular, the following factors are relevant, especially as regards Asian countries:
(i) Recognition does not imply approval but is an act of realism based on objective criteria, including physical control over the territory in question.
(ii) In a changing situation, countries cannot be expected to stick for ever to the same policies, especially those headed for diplomatic defeat. President Nixon’s announcement of his forthcoming visit to Peking demonstrated that the United States has no inhibitions in changing the direction of its policies.
(iii) Asian countries, such as Malaysia, the Philippines, Indonesia and Thailand, are themselves showing signs of wanting a normalisation, or at least some sort of accommodation, in their relations with the PRC. It is even possible that, in certain circumstances, the ROC might at some future time seek its own accommodation with the PRC, leaving those who had maintained recognition in an embarrassing and thankless position.
(iv) Security does not depend on diplomatic relations per se, but on the internal strength and the popular support of the country concerned and on the external support it can muster in an emergency. This is true of the non-Communist countries of Asia, even though the presence of a PRC mission might compound existing problems of subversion. It is also true of Taiwan itself, whose security depends not on the maintenance of diplomatic relations by countries such as Australia but on the United States defence treaty commitment and, increasingly, the ROC’s ability to adjust to the realities of its international position. Australia itself has never had any defence commitment to Taiwan, but we concede that the United States might not wish to feel isolated in its commitment.
8. As regards the effect of recognition of the PRC on our relations with Japan and the United States, the following factors are relevant:
(i) Although the same considerations might not apply to Australia, a close ally in the Asian region, the United States was easily able to accommodate itself to recognition by NATO partners such as Canada and Italy. In any event, the United States Administration felt no obligation to consult Australia and others before President Nixon made his announcement, with all it implies for a Sino–American accommodation. Within a short time, our having moved first would prove irrelevant.
(ii) It is generally conceded that the Japanese Government is in a particularly difficult situation, and that a movement towards recognition of the PRC, if accompanied by withdrawal of recognition from the ROC, is very unlikely during Prime Minister Sato’s term. There is, however, no reason to think that recognition by us, provided it were preceded by frank discussion with the Japanese, would adversely affect our relations with them.
(iii) Over the last year or so, there has been no sign that the United States has exercised any appreciable pressure on countries considering recognition of the PRC. Japan of course has not suggested lines of action to other countries with any connotation of pressure.
(iv) The United States and Japan do not necessarily agree with us on all issues—cf. West New Guinea and airline flights, and VietNam, respectively. The relationships that the United States and Japan have with us are based on their own self–interest, and these relationships will endure at the United States and Japan end as long as they are in the self–interest of these countries. The interests that bind the United States and Japan to Australia are sufficiently deep and varied to withstand any strain caused by our recognition of the PRC in advance of similar action by them. They themselves are seeking to resolve problems that stand in the way of recognition.
9. There are no strong apparent economic disadvantages in recognising the PRC—because our trade with it, if wheat is included, has been about four times higher than with the ROC, and the potential for expansion is obviously greater. Recognition of the PRC has not impeded other countries from trading with Taiwan. If, as in the case of Japan, China were to seek to impose restrictions on firms trading with Taiwan, losses could be more than counter-balanced by trade with the PRC.
Conclusions
10. The balance seems clearly to fall in favour of recognition of the PRC, largely on the basis of the bilateral and more general political possibilities that would be opened for Australia, especially in changing world circumstances as reflected in the UN and the relations among the great powers in Asia. While the positive advantages to be gained are matters of judgment, it is clear that continued non-recognition would serve unduly to isolate us from international realities and developments. Likewise, in the economic sphere, greater possibilities would be opened for us, and if we were not to recognise the PRC, we would be likely to suffer a net loss of trade.
11. Consideration of the possible effects of our recognition on third countries, especially in regard to the United States, has long delayed decisive Australian movement towards recognition. These doubts have largely been superseded by President Nixon’s announcement, and could in any event be offset by effective diplomatic action. This would include a clear advance indication of our intentions to the United States Government. The actual time at which a decision in principle to recognise the PRC should be implemented would be to some extent influenced by the United States’ reaction. We would also need to take account of the inhibitions some friendly Asian governments feel about a closer association between themselves and the PRC. Nevertheless, this would be a matter of timing and careful handling and not an objection of principle.
[NAA: Al838, 3107/38/18, xx]