Taipei, 2 November 1971
Confidential
Taiwan: Reaction to Expulsion from UN
A most striking feature of the ROC’s reaction to its expulsion from the UN—an historic event in the story of this country—was that there was so little which could be reported in concrete terms immediately after the event. This development was part of the process of deflation of the ROC’s pretensions which has taken place since President Nixon’s China policies started to unfold. It was not particularly unexpected in Government circles here (although there was of course widespread disappointment). There were no demonstrations and few shrill outcries against friend or foe. The ROC tried to give the impression that it had retired with dignity before the UN vote was taken, that it had tried to save the UN from its own folly and that, these efforts having failed, it would now concentrate on looking after its own interests.*1 Attention was then turned to the celebration of President Chiang’s 85th birthday with its attendant longevity noodles and circuses.
2. Some of this reaction, or lack of it, was so bogus that it calls for little comment. Saving the Government’s face internally was a large factor, even though lack of frankness about expulsion has evoked some private criticism that the people would cooperate more willingly if the facts and problems to be faced were put to them more frankly. There is probably much more unease and concern in popular circles than within the Government, whose members have at least concrete problems to deal with. Non–officials are not sure what next to expect and how much the Government will tell them of the country’s real position. Mainlanders are very critical, privately, of the United States. And the first reaction of one or two anti–government Taiwanese of our acquaintance was to speculate about how hard the PRC might now prosecute its claim to Taiwan from the vantage point of the Security Council. I suspect that this feeling is widespread; it parallels the thought expressed by Y.S. Sun, the Minister for Economic Affairs, that the PRC would now seek in every way to retard Taiwan’s economic development. There could be common ground for greater cooperation between Taiwanese and Mainlanders in this concern, but only if the Government acts wisely.
3. The low–key reaction of the Government itself is, however, less bogus than it seems at first glance. The result of the vote was not entirely unexpected and the GRC had time to brace itself against the blow and start to grapple in advance with the problems thus caused. It is, for example, interesting to note that Foreign Minister Chow Shu–kai’s estimates of likely voting in New York were consistently more pessimistic then those of the Americans. Chow is a shrewd man, and no doubt calculated that he would fare better if the GRC ended up with a pleasant surprise rather than an unpleasant one, based on his assessments. He may, to be fair, simply have been completely realistic about the prospects.
4. The main reason for the GRC’s calm reaction is, however, in my opinion, that at no point this year has it really trusted the Americans sufficiently to believe what they say, or that they will achieve their stated purposes. ROC/US relations have for some time been an unhappy story glossed over by sentimental words. There were several sharp shocks to the relationship in 1970, such as the US’s changed attitude in the UN, the outcome of the vote that year, various incidents concerning the Taiwan Independence movement and so on. These shocks, inter alia, revived memories of what the Nationalists regarded as their ‘betrayal’ and the end of their Mainland days. The ruder shocks this year have, I think, led the GRC to look very coolly at the US and to expect little except continuation of the US defence commitment to Taiwan. In this last regard, I think that the ROC accepts US assurances but that it would not be greatly surprised (though indignantly vociferous) if the US sought to water it down considerably in the future.
5. The ROC, however, has not seen it as in its interests to be actively and publicly anti–American, no matter how critical officials and others may be in private. As former Vice–Foreign Minister James Shen once said to me, Taiwan remains dependent on the US, in the last resort, in practically every field. Without the defence commitment it would be perilously exposed to unsettling and menacing pressures by the PRC (even if the political and military cost of an actual attack on Taiwan make assault unlikely). At a time when it is accepted here that Taiwan’s future will ultimately be determined by its economic success or failure, it must retain, and if possible continue to develop, its markets in the United States. Political stability also depends to a considerable degree on the assurance of continuing American support. In addition to these considerations, the ROC is in the helpless position of knowing that an extreme reaction to American policies could only speed the process of a US/PRC detente. It can therefore do little but seek to retain what tattered dignity it can, and seek to influence US popular opinion by playing on sentimental ties with the US right–wing, and with Mr Meany.2 It knows, to its frustration, that all this is unlikely to achieve much in real terms.
6. It can also—and this is perhaps the most encouraging and realistic thing it is doing—accept that practically every other consideration must now be subordinated to economic development. The President makes his stirring if sometimes Delphic statements but the economic technocrats are more firmly in the saddle now than when I arrived here two years ago; they seem to have the firm backing of Vice–Premier Chiang Chiang–kuo, who has learnt much since he moved up from being Defence Minister. Minister Sun’s ‘economy first’ speech at the end of August (our memorandum 654)3 was an indication of primary importance. So have been the efforts to retain at least trade ties with countries which have recognized the PRC. So have been the long–delayed decisions to commence large–scale economic projects (such as the North–South Freeway and the steel mill project) in order to demonstrate economic confidence. And so have been the efforts to woo the Overseas Chinese, not only for political support but as sources of capital and as outlets for exports from Taiwan. All these developments were, in a sense, reaction to the UN vote, in that they were designed to offset in advance the effect of expulsion.
7. It is too early yet to assess what fresh economic impact the ROC’s expulsion from the UN will have. Business, I gather, is proceeding as usual. Confidence is lacking but that has been the case for some time. The Government is prompting banks to lend money on comparatively easy terms to persons willing, for example, to buy on the sagging stock market (which institution is of comparatively little economic importance save as a general indicator of confidence). Recently published figures suggest that some pending applications for investment have been approved with a rush in order to make the statistics for this year look more respectable than seemed likely after the first six months of 1971. (It remains to be seen whether all the applicants will now in fact invest. Finance Minister K.T. Lee4 told me he expected virtually nothing from Japan.)
8. In all the circumstances, it is fortunate that the ROC’s economy has done so well over the past few years. With foreign currency reserves of some US$800 million, the Government has some fat to live on while it waits, works and hopes for the restoration of economic confidence.
9. Another significant development has been the obvious inclination to face up somewhat more directly to the incipient political problems with which history has burdened Taiwan. (The top–heavy governmental structure and the Mainlander/Taiwanese problem in particular.) Enough has appeared in newspapers about the likelihood of enlarged representation in the Legislative Yuan to stimulate popular interest. The Taiwanese Independence Movement is now sometimes mentioned in the press (in great contrast with the situation two years ago when it was a totally forbidden subject). The significance of the TIM is of course cried down, but it is important that it is referred to at all. All in all, it now seems nearly certain that some proposals for political change will go to the National Assembly when it meets next February. Such proposals are, of course, much more likely to be palliative than cures, and it seems most unlikely that the KMT Party and the armed services will permit any development which would seriously threaten their own position. But, once again, the important thing in this regard may prove to be that the need for change is being accepted, even if not yet squarely faced. (The ROC’s retreat towards reality in regard to the UN question in the course of this year—a movement never quite completed—was something of a parallel.)
10. For Australia, some tentative conclusions can be drawn. The ROC’s emphasis on the economy may well provide us with opportunities to increase our exports here even further, provided that there is not a serious economic slump. Moreover the ROC’s concern at the likely accelerating trend of recognition of Peking could put countries which might wish to adjust their relationship with Taiwan to meet the new situation in a very strong bargaining position. But we should also note carefully that the ROC, being now likely to have few multilateral fora to work in, will have little alternative but to seek to strengthen bilateral ties in its international relations. We can expect to be wooed quite intensively, and that many efforts will be made through non–official and ‘people–to–people’ channels to maintain practical and sentimental ties. We may have to be quite firm in avoiding being clutched to the ROC’s rather desperate bosom.
11. Copies of this memorandum are being sent to Washington, Tokyo, Hong Kong, and UN New York.
[NAA: A1838, 3107/38118/1, ii]
1 Dunn here footnoted that ‘Its goals, including that of eventual “recovery of the mainland”, would remain unchanged’.
2 Presumably, George Meany, President of the American Federation of Labor and Congress of Industrial Organizations.
3 Not published.
4 Li Kwoh–ting.