Canberra, 21 February 1955
395. Secret
For the Prime Minister from McBride.1
Formosa
Telegram No. 3952 from London.
1. I have been giving some consideration to the logic of our position in continuing to recognize Chiang as the Government of China and to the best means of maintaining support for the retention of Formosa out of Communist hands. I feel that more thought should be given to implications of American contention that Nationalist Chinese morale is being undermined by gradual loss of territory and realization that return to mainland is becoming remote. Dulles made this point again last week to Pearson (Spender’s telegram No. 583 to London) and hinted that even Chiang Kai–shek’s son may not remain loyal. We run risk of losing Formosa sooner or later through Chinese on island giving up. United States may have to support burden of defence of Formosa without aid of Chinese Nationalist forces now on island. I have been considering whether it was worth exploring possibility with Americans of developing a long–term plan for Formosa based on a policy of Formosa for the Formosans. With Cabinet approval I asked External Affairs Department to make a study of this possibility, which we might find worth sending to Washington for your possible use there.4
2. Trusteeship in theory has many attractions, but practical objections stand in the way at present. Most important of these are American and Chinese Nationalist reactions. I do not see how Chiang Kai–shek could be persuaded voluntarily to surrender the Government of Formosa nor where an alternative administration and necessary funds would come from. Moreover Americans would not likely agree to anything which jeopardized our having 400,000 Nationalist troops at our disposal on islands.
3. Nevertheless you may feel it worthwhile discussing in Washington our basic dilemma which is becoming increasingly clear that, even if we are willing to defend Formosa, we may not be able to rely indefinitely upon Nationalist Chinese to remain opposed to Peking, particularly when they realize they have no chance of returning to the mainland as a Government.
4. I have two comments on Tange’s telegram No. 395. First, I think it is probably unwise to try to explain our attitude in legal terms and particularly to argue whether Formosa is or is not legally part of China. The fact is that there are two separate Governments of clearly defined territories (except for the off–shore islands, over which there is some dispute) and that we are working towards an acceptance of these two separate entities in the international community. Yet Australia is not willing to state publicly that it will recognize Peking as Government of mainland. But if we are feeling our way towards some future change in our position on recognition of Peking, I see no advantage in our asserting publicly now that Chiang Kai–shek has full legal authority over mainland (which may be implication of Tange’s paragraph 2C). There are advantages in our leaving the position vague. Secondly I do not like way in which paragraph 2E of telegram No. 395 is formulated. Hitherto we have always avoided stating our support for Chiang Kai–shek as such and have instead expressed ourselves as being in favour of keeping Formosa and Pescadores out of Communist hands. This latter way of formulating our position gives us more freedom [f]or5 future movement and is consequently preferable.
[NAA: A1209, 1957/5035]
1 Sir Philip McBride, Minister for Defence and Acting Minister for External Affairs.
2 Document 50.
3 17 February. Spender reported Pearson as having been told by Dulles that the danger of subversion in Formosa would be greatly increased by a Nationalist defeat on the offshore islands, that the danger of subversion was greater than that of a direct attack on Formosa and that Dulles was ‘particularly worried about position of Chiang’s son and had grave doubts concerning his loyalty and friendship towards United States’. Pearson summarised US policy, as explained to him by Dulles, as follows: that the United States was working towards eventual Nationalist withdrawal from the offshore islands; but meanwhile the United States would if necessary help the Nationalists if the latter were attacked and asked for help; that meanwhile the United States ‘would prevent Chiang using Coastal Islands for any offensive purpose’; that the PRC would be dissuaded from military action when recognising the defensive nature of US policy; and that this would mean a de facto cease–fire and at least some chance of a satisfactory solution later.
4 On 15 February McBride ‘informed Cabinet that he had asked the Department of External Affairs to prepare a paper dealing with the future of Formosa and Cabinet noted that he proposed to forward this paper to the Prime Minister in case he should find it useful in connection with his discussions in the United States’.
5 The letter ‘f’ is an editorial insertion.