Canberra, 24 March 1972
Secret
China Policy
Cabinet on 21 February considered your submission (No. 55411—copy attached) on China Policy and decided to hold over its consideration—principally, we understand, because of the then impending visits of President Nixon to China and of Mr Marshall Green to Australia.
2. Now that Mr Renouf has had his meeting with Mr Huang Chen, I attach a draft Cabinet submission bringing matters up to date. We have deliberately omitted a Conclusions or Recommendations section.
3. With regard to the Renouf/Huang meeting,2 the only points we would make by way of commentary, beyond what is said in the draft submission, are these.
(a) The PRC’s conditions of recognising the PRC ‘as the sole legal government representing all the Chinese people’ . and of severing diplomatic relations with the ROC, are what we had always expected.
(b) The requirement that we ‘promise neither to support nor take part in the fallacies of the Two Chinas’ etc. is somewhat curiously worded, but probably means no more than that we (like others) would have to at least ‘take note’ (or some such phrase) of ‘One China’ . not support the retention of ROC membership in international bodies of which we too were a member, and perhaps decline to sit with the ROC in international bodies. How much of all this, and of (a) above, we would be asked to say publicly, and in what precise terms, will not of course be known until such time as we agreed to enter into negotiations about establishing diplomatic relations.
(c) ‘ The fallacy that the status of Taiwan remains to be determined’ is not a ‘fallacy’ to which Australia (unlike the USA or UK) has subscribed. Perhaps the PRC, with the UK especially in mind, simply wishes to close all possible loopholes.
(d) It is not clear from the PRC’s reference to existing bilateral trade whether the PRC is drawing any distinction between private Australian firms such as BHP and semi–government bodies such as the Wheat Board; but we think not.
(e) The PRC’s reference to our participation in the VietNam war as one of the two difficulties in the way of developing trade ‘rapidly’ is a little surprising, especially as we no longer have combat forces in Viet Nam.(Mr Huang, in Mr Renouf’s first meeting with him in May last year, said at first that this was one of the obstacles to the normalisation of relations, but later in the conversation agreed that it should not be allowed to block the normalisation of relations. It is perhaps something that our continuing participation in Viet Nam is not now cited as a difficulty in the way of normalising relations, but only of developing trade rapidly.)
(f) The reference to difficulties in the way of ’ .eveloping trade rapidly’ . could be taken to imply that the PRC would be prepared to see a modest increase in out bilateral trade over time, but it is difficult to be sure of this. Perhaps all the PRC means is that, if it suits their commercial book, the two political ‘difficulties’ would not prevent them buying from us.
(g) It is perhaps something that the phrase ‘politics and trade are inseparable’ was not used by the PRC on this occasion (as it was in the Hong Kong discussions), though the substance of that position comes out clearly enough in relation to further trade—but not existing trade (however that may be defined).
(h) There is the point, too, that on this occasion Mr Huang did not refuse to discuss trade. (At the July 1971 meeting, he said that trade was not his business; that what he could and would discuss was the establishment of diplomatic relations; and that any discussion of other subjects must follow that discussion.)
(i) Finally, whereas Mr Renouf reported that at the July meeting Mr Huang had been curter than at the first meeting and at the end less polite, Mr Renouf characterises yesterday’s meeting as pleasant if unproductive, with Mr Huang being polite and friendly.
4. In the eventual Conclusions or Recommendations section of your submission to Cabinet, you may wish to seek specific authority for the inclusion in your Parliamentary statement of a reference to Australia’s noting that the Chinese on either side of the Taiwan Straits take the position that there is only one China and that it includes Taiwan.
H.D. Anderson
First Assistant Secretary
Assistant Secretary
[NAA: A1838, 3107/38/18/2, ii]
1 Document 300.
2 See Document 322.