Canberra, 11 November 1971
Secret
China
Attached, as you requested, is a note setting out the advantages and disadvantages of establishing relations with the PRC.
Attachment
ADVANTAGES AND DISADVANTAGES OF ESTABLISHING RELATIONS
WITH THE PRC
Advantages
(i) The People’s Republic represents China in the United Nations and will hold a permanent seat on the Security Council. It is the most populous nation on earth. It has developed nuclear weapons and maintains the largest standing army in Asia. Although industrially backward and not a super power, it is emerging as one of the four major powers in the Asia–Pacific region. It is important that Australia have direct diplomatic access to the PRC both as a permanent Security Council member and as a member of the quadrilateral whose actions and interactions will affect the future of our region so profoundly.1
(ii) The establishment of an Australian Embassy in Peking would provide us with first–hand reports on political, economic and other developments in the PRC. In present circumstances we should not expect a substantially increased flow of information but any addition to our present limited knowledge of China would be of value.
(iii) Diplomatic relations would provide us with direct contact with China on matters affecting our bilateral interests including trade, communications and consular matters.
(iv) Countries that have recognized the PRC have not so far fared demonstrably better in trade with China than non–recognizing countries. China’s major sources of imports are Japan and Germany, which do not recognize the PRC, while Britain and France, which do, are third and fourth. But the Chinese have made it clear to us that non–recognition will impede trade and that, where other things are equal, they will give preferential treatment to countries like Canada which recognize Peking.
(v) The PRC is not a great trading nation and it stresses Marxist principles of self–reliance in economic development. Yet even a small increase in demand could lead to an appreciable widening of our export opportunities. Now that the social and economic base of the country has been consolidated, its foreign trade is unlikely to remain limited indefinitely. 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. The establishment of diplomatic relations would put Australia in a better position to exploit long–term trading opportunities.
(vi) The following advantages and disadvantages are also relevant to the timing of a decision to establish relations with the PRC:
(a) Sixty–two countries now have relations with Peking, fifty–seven with Taipei. Among the latter, a number are at present seeking to come to terms with Peking. Following the adoption of the Albanian Resolution the inevitable trend in the international community is to accept the claim of Peking, rather than Taipei, to be the government of China. It is in Australia’s interest as an influential member of the Asian–Pacific region to ensure that it does not become isolated or identified as one of the last countries in the region to have relations with Peking.
(b) At present we appear to enjoy a position of some advantage in dealing with Peking. We draw very little criticism from the Chinese press and radio. We were not singled out for criticism for our vote on Chinese representation in the United Nations General Assembly. We believe Peking has some apprehension about Australia’s relations with Japan and perhaps also about our expressions of a desire for improved relations with the USSR. These factors suggest that we might have some leverage in negotiations with Peking at present. The passage of time, however, could make negotiations towards recognition more difficult, particularly if we were outstripped by Japan and/or our South–East Asian neighbours.
Disadvantages
It was possible to argue some months ago that:
(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 accommodations with Peking; and
(iii) recognition of the PRC might strain our relations with the United States and Japan, perhaps on account of the factors mentioned immediately above.
These arguments seem to us to have lost much of their validity. The United States, Japan and other Asian countries have made varying degrees of progress in their own efforts to come to terms with Peking. Their policies, which have been further affected by the decision of the UN General Assembly, appear to be based on their own national interests in each case. We have taken steps, especially with regard to Japan, Indonesia, Thailand and the Philippines, to give assurances of our interest in continuing consultation with these countries. These assurances have been well received. It is clear, however, that they for their part and we for ours will act in terms of our respective interests, keeping each other informed rather than seeking concurrence or advice.
As to the argument in (ii) above, the security of Taiwan depends essentially on the United States defence treaty commitment and the internal strength and cohesion of the Nationalist regime—not on the maintenance of diplomatic relations with countries such as Australia. An Australian decision to recognize Peking and break off relations with Taipei might have a slight effect on morale in some quarters in Taiwan but could have no significant influence on the security situation. As to the other non–Communist countries in Asia, Malaysia, the Philippines, Thailand and Indonesia are already seeking accommodations of one sort or another with Peking, and Australian recognition of the PRC could have no appreciable effect on their internal security or morale.2
The establishment of a PRC Embassy in Canberra would pose some security problems and facilitate the dissemination of Maoist propaganda. These problems, however, should be manageable. It might be argued that the establishment of relations with the PRC, by obliging us to sever relations with the ROC, would have the following disadvantages:
(a) our trade with Taiwan could be adversely affected;
(b) we would no longer receive reports from our own Embassy on political, economic and security developments on Taiwan;
(c) we would be unable to provide consular protection for our nationals.3
On the other hand:
(a) the experience of the British, Canadians and others has shown that recognition of the PRC need not impede trade with Taiwan. Indeed the maintenance of present trading links would be just as important to Taiwan as to Australia;
(b) because of their relative international importance, our need for first–hand information on the PRC is far greater than our need for first–hand information on Taiwan. So long as the United States maintained a presence there we would continue to have access to American reporting;
(c) we have few nationals resident in Taiwan and there are relatively few Australian visitors. It should be possible to arrange for the United States or another friendly government to represent our interests.
The main disadvantages of an early decision to establish relations with Peking would be presentational. The Australian Government has often stated that it is anxious to preserve the rights of the 14 1/2 million people on Taiwan. Such statements have been made mainly in the context of representation in the United Nations, but an early decision to establish relations with Peking, and therefore to break off with Taiwan, might be criticized in some quarters as a reversal of policy involving the sacrifice of a country with a population larger than our own. The decision would have to be defended by reference to the General Assembly’s decision and the greater relative importance of relations with the PRC.4
[NAA: A1838, 3107/38/18, xxii]
1 Here, Bowen wrote in the margins: ‘Recognition is generally accorded to de facto government of a country. Recognition does not imply approval of policy. It is due to a series of historical accidents [that] we have not previously recognized. To recognize would be to act according to the realities of the situation’. Further down the page, he added: ‘Position of China—1. Member of UN. 2. Member of Sec. Cl (of wh we seek membership). 3. Member of various UN agencies and related bodies’.
2 An annotation by Bowen read: ‘Our action in recognizing would have … implications for our SE Asian neighbours’.
3 Bowen added: ‘Our recognition would kill AS PAC’.
4 With reference to this paragraph, Bowen wrote: ‘Query desirability of consultation with SE Asian neighbours (vide proposal for summit meeting)’.