Hong Kong, 8 November 1971
1487. Secret Priority
China/ Australia—Trade Mission
The following are some reflections on the recent contacts here with the Chinese following their proposals through Kibel that a minister and/or trade mission visit China, and the recent Chinese decision to abort the visit of a trade mission after negotiations had reached a fairly advanced stage.1
2. We believe that the approach through Kibel here was a serious and responsible one and that the decision not to proceed with the visit of a trade mission was made at a high level in the Chinese Government. We do not know with any certainty why the Chinese decided not to proceed with the visit. We believe, however, that their decision was probably influenced by the following factors:
(a) A Chinese assessment that we did not accept the political implications of the visit. The Chinese motive in taking this initiative was clearly a political one. They made it clear to us that they saw the trade mission as a step towards diplomatic relations between the two countries. We think they came to assess that Australia, while ready to go ahead with the visit, was not really prepared to accept its political implications.
(b) They believed that the victory in the United Nations had strengthened their diplomatic position and would put further pressure on Australia and others to open relations with China, now a permanent member of the Security Council.
In this new situation they decided to wait a while and see what happened. The way Australia voted on Chinese representation in the U.N. probably confirmed their assessment in (a) above.
3. We would thus appear to be back in much the same position we were after the breakdown of the ambassadorial talks in Paris earlier in the year. There appears to have been some slight movement in the Chinese position in that they now seem ready to take practical steps to improve the relationship between the two countries once they feel that we accept that these are steps towards the ultimate goal of diplomatic relations. If our assessment of their thinking is accurate we suspect the Chinese might seek to drive home their point in contacts with Australian exporters at the current Canton trade fair by stressing the political differences between the two countries and doing little business with them.
4. One thing the exercise has shown is that the Chinese do attach at least some importance to establishing diplomatic relations with Australia. When after the Paris meetings they found we were showing no great interest in resuming contact, they did take the initiative, albeit in a roundabout and deniable form, in approaching us. We think we can assume that the interest on their part is still there. Among the considerations for them would be:
(a) they have a continuing interest in the diplomatic isolation of Taiwan;
(b) they are well aware of the growing relationship between Australia and Japan and have an interest in seeking to offset this.
We do not see how they hope to go about this (compared to Japan they have little to offer us) but a necessary first step would presumably be the establishment of a diplomatic presence in Australia. We have the very strong impression that the Chinese view Australia, and indeed South East Asia generally, largely in the context of the complex but essentially antagonistic relationship with Japan. This worry about Japanese influence and similarly unhappiness about Australia’s close relationship with the United States and apparently improving relationship with the Soviet Union were reflected in some of the discussions which took place during the recent exercise here.
5. Our experience to date, however, indicates that Chinese interest is not strong enough to lead China to give any meaningful political concessions in her terms for diplomatic relations with us. There has been no sign that she would be prepared to vary her ‘one China’ policy in our case and agree to us maintaining official representation in Peking and Taipei at the same time. None of the fourteen countries which have negotiated relations with China in the last year have managed this and we can see no reason why the Chinese should regard our case in any different light. While it is true that the United States has established important contacts with China without varying the terms of its commitment to Taiwan this case appears to be sui generis (underline two) and not a model which the Chinese are prepared to accept in our case.
6. While there seems no prospect of this sort of political concession we think there is probably a good chance of securing some temporary trade benefits in return for establishing diplomatic relations. We can for instance imagine China agreeing to resume wheat imports from Australia though probably at a lower level than in the past, if we made this a condition of the establishment of relations.
7. To sum up, the main lesson of the recent exercise here appears to be that there are no prospects of achieving any degree of improved relations unless the Chinese come to be convinced that such steps would be preliminary to the establishment of diplomatic relations. The ultimate price we would have to pay would be the severance of the diplomatic link with Taiwan.
[NAA: A1838, 3107/38118/2/1, i]
1 Officials in Canberra were informed on the cancellation of the visit on 1 November.