Taipei, 8 December 1972
775. Secret Priority
China Policies
Being unable to see Chiang Ching–[k]uo, on 8th December I made a point of farewelling ministers without portfolio George Yeh and Yu Kuo–hwa. The former is an ex–Foreign Minister but is now ill and without much influence. The latter is very influential. He is also Governor of the Central Bank, the chairman of several Cabinet groups on economic and financial policy and an important KMT official.
2. I gave them both transcripts of relevant section of the Prime Minister’s press conference of the 5th December and drew their attention to the statement that continuing unofficial commercial contacts would be reasomible. I said that I had spoken to the Foreign Minister on Tuesday. What had been said was of course secret and would remain so. On a personal basis I went on to say that there could be some advantage even for the ROC in my being able to report at first hand attitudes I had noted here. I appreciated that there were problems for the ROC in corning to early decisions. It needed to handle any dealings about unofficial contacts very discreetly. (Comment. (Underline one). It obviously will not want to make it too easy for other countries to follow the Japanese pattern.) I thought it would be in the ROC’s own interests if I could say something fairly definite about the ROC position by the time I return to Australia next week.
3. Yeh said that the present development had of course been inevitable once the Australian Government changed. The ROC needed to face up to the fact that it would have to accept some variant of ‘two Chinas’ or ‘one China, two Governments’ if it was not to become a complete political non–entity. He asked whether I thought the ROC should ask some other country to represent it in Australia.
4. I said I had not given thought to the problems as seen from the ROC’s point of view. Off the cuff, one could foresee difficulties in persuading another country to represent the ROC in Australia in present circumstances. More specifically, I doubted whether Australia could accept any such representation of interests if it implied that we were treating Taiwan as a separate country from the Mainland. The idea of ‘unofficial contacts’ mentioned by the Prime Minister could get round some of these problems. Yeh agreed. Foreign Minister Shen was presumably thinking about such matters. I said I was sure he was and that I hoped to have some official indication of ROC thinking before I returned to Australia.
5. Yu Kuo–hua was quite decisive in saying that ‘there seemed to be a general feeling in the Government that it would wish to see unofficial relations with Australia continued in the future’ . He spoke in terms of continuation of both commercial and cultural relations as well as travel. He made something of a point of stressing that there should of course be reciprocity. The inevitable break in formal diplomatic relations was ‘most regrettable’ but Yu thought that trade, which was of mutual benefit, should continue and grow as it had in past cases such as Canada. Friendship between people would also continue.
6. Comment. (Underline one.) While an official reaction must obviously still come from the Foreign Ministry, Yu ’s words suggested that there had already been intra–governmental discussion of the question. He may well have checked what he would say with the Foreign Ministry before he saw me. Even if I get no Foreign Ministry response, you might consider that the overall indications are sufficiently clear for me to put some further ideas forward in social meetings with Ministers next week. This could of course depend on how the prospects look elsewhere.
7. In the light of Chiang Ching–kuo’s unavailability, it is of interest that the able and influential Minister for Education, Y.S. Tsiang, on 8th December, asked us to lunch on 13th December. He is an economist and close to Chiang Ching–kuo.
8. As we are reporting separately, the local press is quoting ‘informed sources’ as saying that Australia will set up an unofficial trade office in Taipei. We are trying to check the source. It may be that the ROC is leaking this line in the hope that it will create friction in our dealings with the PRC.
Dunn
[NAA: A1838, 3107/38/18/6, i]