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August 27, 1957
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7-) Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 ieV NO? CONFID TIAL SECRET- NIE 43-2-57 27 August 1957 SEP 3 19571 N? 307 NATIONAL INTELLIGENCE ESTIMATE NUMBER 43-2-57 (Supersedes NIE 43-56) THE PROSPECTS FOR THE GOVERNMENT OF THE REPUBLIC OF CHINA Submitted by the DIRECTOR OF CENTRAL INTELLIGENCE The following intelligence organizations participated in the preparation of this estimate: The Central Intelligence Agency and the intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and The Joint Staff. Concurred in by the INTELLIGENCE ADVISORY COMMITTEE on 27 August 1957. Concurring were the Special Assistant, In- telligence, Department of State; the Assistant Chief of Staff, Intelligence, Department of the Army; the Director of Naval Intelligence; the Assistant Chief of Staff, Intelligence, USAF; and the Deputy Director for Intelligence, The Joint Staff. The Atomic Energy Commission Representative to the IAC and the Assistant Director, Federal Bureau of Investigation, abstained, the subject being outside of their jurisdiction. --S-ECRET? CONFID TIAL, DOCUMENT NO 0 WY KO CHANGE IN CLASS. 0 0 DECLASSIFIED CLASS. CHANGED TO: TS S KEIT REVIEW DATE: ADM KR 114 atm 7-)7-F1 PC WeLter nnt-t,117 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 /19/ Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 CENTRAL INTELLIGENCE AGENCY DISSEMINATION NOTICE 1. This estimate was disseminated by the Central Intelligence Agency. This copy is for the information and use of the recipient indicated on the front cover and of per- sons under his jurisdiction on a need to know basis. Additional essential dissemination may be authorized by the following officials within their respective departments: a. Special Assistant to the Secretary for Intelligence, for the Department of State b. Assistant Chief of Staff, Intelligence, for the Department of the Army c. Director of Naval Intelligence, for the Department of the Navy d. Director of Intelligence, USAF, for the Department of the Air Force e. Deputy Director for Intelligence, Joint Staff, for the Joint Staff f. Director of Intelligence, AEC, for the Atomic Energy Commission g. Assistant Director, FBI, for the Federal Bureau of Investigation h. Assistant Director for Central Reference, CIA, for any other Department or Agency 2. This copy may be retained, or destroyed by burning in accordance with appli- cable security regulations, or returned to the Central Intelligence Agency by arrange- ment with the Office of Central Reference, CIA. 3. When an estimate is disseminated overseas, the overseas recipients may retain it for a period not in excess of one year. At the end of this period, the estimate should either be destroyed, returned to the forwarding agency, or permission should be requested of the forwarding agency to retain it in accordance with IAC-D-69/2, 22 June 1953. 4. The title of this estimate, when used separately from the text, should be classified: FOR OFFICIAL USE ONLY WARNING This material contains information affecting the National Defense of the United States within the meaning of the espionage laws, Title 18, USC, Secs. 793 and 794, the trans- mission or revelation of which in any manner to an unauthorized person is prohibited by law. DISTRIBUTION: White House National Security Council Department of State Department of Defense Operations Coordinating Board Atomic Energy Commission Federal Bureau of Investigation Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 _ ? Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 CONFIDENTIAL TABLE OF CONTENTS Page SUMMARY AND CONCLUSIONS 1 DISCUSSION 2 CURRENT SITUATION 2 OUTLOOK 4 APPENDIX A 6 MILITARY 6 Army 6 Navy 6 Air Force 7 APPENDIX B 9 Table 1. ECONOMIC INDICATORS 9 Table 2. TAIWAN'S EXTERNAL ACCOUNTS 9 APPENDIX C 10 DIPLOMATIC STATUS OF THE REPUBLIC OF CHINA AND COMMUNIST CHINA 10 CONFTIWNTTAV Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 THE PROSPECTS FOR THE GOVERNMENT OF THE REPUBLIC OF CHINA THE PROBLEM To estimate the strengths, weaknesses, and prospects of the Government of the Republic of China, with particular reference to its staying power. SUMMARY AND CONCLUSIONS 1. The Government of the Republic of China continues to hold as its central objective the recovery of power on the mainland. In fact it controls only Tai- wan, the Penghus, and a few islands lying off the coast of China, and it holds its international position primarily be- cause of US diplomatic support. It is able to support its present military estab- lishment and the economy of Taiwan only with substantial US assistance. 2. The National Government remains politically stable and the economy of Tai- wan continues gradually to improve. The military establishment is growing stronger, but Nationalist forces alone could not defend their territories against a full-scale Chinese Communist attack. 3. The staying power of the Republic of China will be determined by the ability of Nationalist leaders to adjust to life on Taiwan, by developments within Commu- nist China, and particularly by the poli- cies of the US. Major setbacks in Com- munist China or the Communist world would raise Nationalist morale and strength of purpose. However, develop- ments interpreted by Nationalist leaders as indicating that the US was losing in- terest in supporting the National Gov- ernment and that Communist China was gaining international prestige and inter- nal strength and stability would foster divisive and defeatist tendencies in Tai- wan. The death of President Chiang would probably be followed by a period of domestic uncertainties and a weaken- ing of the government's stability. Com- munist China's admission to the UN would result in marked deterioration of the morale of Nationalist leaders. 4. Given continued US support, the Na- tional Government will probably main- tain its position on Taiwan, although its international position will deteriorate. Continued emphasis on the objective of return to the mainland, however, would increase the need for US aid to prevent economic degeneration, particularly in view of the population growth expected I', Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 1 Declassified and Approved For Release @ 50-Yr 2014/02/27 : CIA-RDP79R01012A009900040006-5 over the next decade. In this situation there would be increased frustration and defeatism, especially among middle level elements, and there might be increased susceptibility to Communist induce- ments. 5. On the other hand, if a new generation of leaders in time were to accept a "two 2 Chinas" arrangement and if they came to concentrate on long-term economic development, the island might become economically viable and morale tend to improve. In any event, US military guarantees and assistance would have to continue and economic aid would be re- quired for the development of export industries. fC? DISCUSSION CURRENT SITUATION 6. The Republic of China on Taiwan remains politically stable, its military establishment is growing stronger,1 and the economy of the island continues modestly to improve. How- ever, this appearance of well-being tends to be misleading. The Republic of China cannot survive without US support. Its position as the legal government of China is being in- creasingly threatened by Communist China. Its leaders are not satisfied with their pros- pects on Taiwan and continue to hold to the return to the mainland as a major objective, although many of them probably believe that the chances of attaining this objective are re- mote. Worries over their future, resentment over US lack of support for return to the mainland, and apprehension as to future US intentions toward Communist China have combined to produce a mood of frustration and concern among many Nationalist officials. 7. Throughout eight years on Taiwan the top Nationalist leadership, and particularly Chiang Kai-shek, has held firmly to the objec- tive of a return to the mainland as the raison d'etre of the National Government. The Generalissimo is apparently concerned over the long-term pull of the mainland on his f ol- iowers, and in addition believes that to aban- the return would be realized in his lifetime. His own appraisal of developments of the past year, in the Bloc generally and in Commu- nist China specifically, has almost certainly raised his estimate of the chances of a return. He may well read into current Communist dif- ficulties on the mainland the early signs of that reaction against "alien rule" that his in- terpretation of Chinese history tells him is inevitable. The Generalissimo's faith in the return will probably remain even though cur- rent troubles on the mainland fail to attain serious proportions and even if there is no apparent prospect of major hostilities between the US and the Chinese Communists. Fur- thermore, whatever the actual chances of a return, he will almost certainly continue to believe that it is essential to proclaim the ob- jective in order to maintain morale and a sense of national purpose among his followers. 3. However important it may be for Nation- alist morale to hold out promise of return, the continued emphasis on this theme in propa- ganda and policy constitutes a major vulnera- bility in the Nationalist position on Taiwan, if, as we believe likely, the realistic chances of a return are slim. The problem of finding constructive employment for Taiwan's large numbers of educated and talented men is be- . nrsrv-tirtrr irtryrnn oil., nlyr ThP.V are not if 1/ The Special Assistant, Intelligence, Department of State, betieves paragraph 5 should read as follows: 40n the other hand, if a new Generation of leaders in time come to $- ace major emphasis on long term economic development, the island's onomic prospects would improve, morale would be sustained, and the Sthying power of the GRC would be strengthened. In any event, US litary guarantees and assistance would have to continue and Oonomic aid would be required for the development of export ftdustries." CONFIDENTIAL Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Taiwan, appeals ;h honor "China. alanders er army Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 officers, white collar workers, and intellec- tuals that indications of dissatisfaction have been in evidence. This group represents a potentially serious morale problem and a tar- get for Communist subversion. 9. To date Communist efforts to subvert and to induce defections have had little success. The security measures of the National Gov- ernment appear adequate to prevent any threat to the stability of the government. In addition, recent events on the mainland have somewhat lifted Nationalist spirits, particu- larly the current repression of the "rightist" nonparty figures which undercuts Commu- nist attempts to persuade Nationalist leaders and officials that they can become important "democratic personages" in Communist China. However, it is impossible to estimate whether or to what extent frustration and the appeal of the mainland have undermined the loyalties of some Nationalists. 10. President Chiang Kai-shek, still vigorous at 70, continues to be the dominant figure in the government and the ruling Kuomintang. The chief political rivals at present, under the Generalissimo, are Ch'en Ch'eng, the consti- tutional successor to the presidency, and Chiang Ching-kuo, the elder son of President Chiang. The latter has acquired considerable power from his close relationship with his father and from his control of important ele- ments within the secret police, the Political Department of the Army, the KMT Youth Corps, and the secondary levels of the Kuo- mintang organization. His growing power has been somewhat circumscribed, however, by distrust of him engendered by his long training in the USSR and his association with police activities. 11. The most striking event of the past year was the 24 May riot and the sacking of the US Embassy. We believe this incident did not reflect the existence in Taiwan of intense anti-Americanism, but did demonstrate re- sentment against what many Chinese be- lieved to be a miscarriage of justice. The re- action was intensified by the existence of deep-seated frustrations and injured national pride. Although some officials probably knew that a demonstration was planned and 3 some advantage was taken of the situation, the pillage of the Embassy was probably not premeditated. There was a long delay in controlling the mob after the demonstrations turned to violence, reflecting seriously on the ability of the government to take prompt action in the event of an emergency situation. 12. With US diplomatic support, the Republic of China continues to maintain its formal in- ternational position. The Nationalists gained from the hardening of world opinion toward the Bloc because of recent events in Hungary and the Middle East. Saudi Arabia, Para- guay, and Liberia have agreed to exchange ambassadors with the National Government, and Jordan may soon follow suit. Pressure, however, continues in favor of Communist China's entry into the UN, and increases for further lowering of CHINCOM trade barriers. Moreover, Nationalist prestige has declined somewhat in Asia, and the National Govern- ment has lost face with the Overseas Chinese because of its inability to defend their inter- ests in specific situations in Southeast Asia. 13. The current US aid program on Taiwan has contributed to significant economic im- provement but the economy is still far from self-sustaining. The reorganized National Government has provided a reasonably strong and effective administration under which it has been possible to employ US aid deliveries efficiently. Productive investment has been limited, but has yielded a rather sizable in- crease in output through the rehabilitation of existing fixed plant and increased imported raw materials, much of which was made avail- able through US aid. As a result, the econ- omy has continued to expand during the past year, but at a decelerating rate. Taiwan's GNP in 1957 will be about seven percent higher than in 1956, and about 72 percent higher than in 1951. However, the apparent economic progress is seriously overshadowed by the increasing pressure on resources, and inflationary forces continue to grow despite continued large scale US aid. Two basic problems plague the economy of Taiwan. One is the huge military establishment which is made necessary by defense requirements and by the objective of returning to the mainland. h C017P-Iljt-NTIAr; Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 SECRET The other basic problem is that with limited natural resources the population is increas- ing at the rate of about three percent per an- num, and government and social attitudes are hostile to any measure designed to control population growth. OUTLOOK 14. The prospects of the Republic of China will continue to depend critically upon US policies. Provided US military, economic, and diplomatic support continues at present levels, the National Government for the next few years will probably be able to maintain its position on Taiwan, prevent serious internal discontent, and promote some economic de- velopment. In the short term, the interna- tional status quo of the Republic of China can probably also be maintained with US support. Over the longer run, however, the interna- tional position of the Republic will probably deteriorate. 15. The Nationalist leaders will continue to be highly sensitive to US actions and state- ments which appear to affect the degree of US support of the National Government of China. There will be an increasing convic- tion that the US will eventually come to some arrangement with Peiping that will be to the detriment of the Republic of China. While fully recognizing Nationalist China's depend- ence upon the US, Nationalist leaders will probably seek to exploit what they consider to be US strategic and political interests in Tai- wan by attempting to gain US support on their own terms. 16. Nationalist leaders recognize the threat that incidents such as the 24 May sacking of the US Embassy present to Sino-US coopera- tion, and will probably take firm measures to prevent another such occurrence. However, there will probably be an increase in incidents manifesting frustrations and latent anti- Americanism, although we believe that open expression of such sentiments will not reach a dangerous pitch in the near future. 17. Beyond the next few years, economic prospects for Taiwan are poor, because of the rapid population growth and because Nation- alist leadership does not consider seriously the possibility of a protracted exile on Taiwan. If present Nationalist policies continue with respect to military priority, economic develop- ment, and population control, Taiwan will have little if any hope of becoming economi- cally viable over the long run and will grad- ually require increased outside assistance to maintain present economic levels. On the other hand, a fundamental change in these policies would improve Taiwan's chances for economic viability. 18. So long as President Chiang remains in power no substantial change in Nationalist policy is likely to occur. Should he die prior to the expiration of his present term of office in 1960, Vice President Ch'en Ch'eng would probably succeed to the presidency without provoking internal disturbances. Ch'en would probably attempt to continue the Generalis- simo's policies, but would probably be a less effective leader. Moreover, Ch'en's authority would probably be contested by the Generalis- simo's son, Chiang Ching-kuo, with adverse effects upon Nationalist morale and cohesion. 19. As Chiang and other senior officials even- tually retire from the scene, the National Gov- ernment will probably display more flexibility of policy. The majority of the new leaders would probably in time accept a "two Chinas" arrangement, provided the continued military defense of Taiwan was assured and there seemed to be some economic hope for Taiwan. They would probably remain skeptical of Chinese Communist promises, although cer- tain Nationalists might come to believe that they could make a successful deal with Pei- ping. If some high-level defections occurred, there would be great danger that blocs of fol- lowers might go over en masse to the Commu- nist cause. 20. Serious unrest on the mainland or a major Communist setback of some kind in China would greatly spark the morale of the Nationalists. They would probably begin to make active preparations for landings on the continent, and would exert pressure on the US to underwrite an invasion. They would probably not launch an actual attack without assurances of US support or at least acquies- cence, unless the Nationalists believed that SECRET Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 r1101, Tete:miner 'WW1 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 --"3"1".717711"" the difficulties on the mainland had assumed such proportions as to threaten the existence of the Peiping regime. 21. Any change in US policy suggesting a re- duction of US support for the Republic of China would have highly adverse effects on morale. US efforts to obtain a Nationalist withdrawal from some of the offshore islands, increased US official contacts with the Chi- nese Communists, or US failure to actively oppose Chinese Communist membership in the UN would be viewed with alarm as moves toward formal US acceptance of "two Chinas." Large cuts in US military or eco- nomic aid would have serious repercussions, whether or not the Nationalist military estab- lishment and economy could sustain the re- ductions. Particularly if accompanied by seeming indications of a relaxation of US anti-Communist policies, such cuts would un- dermine morale to a point that might make maintenance of stability by the National Gov- ernment difficult. The problem would be ag- gravated by the Government's reluctance to accept economic reasons for cutting its mili- tary establishment. The difficulties caused by the above contingencies might increase anti-Americanism and the susceptibility of the Nationalists to Communist propaganda. Some defections might occur. It is possible that in an extreme situation the Nationalists might attempt to embroil the US in war by launching an attack on the mainland, but we regard such a development as unlikely. 22. However, provided most Nationalist lead- ers remained convinced that US defense of Taiwan was assured, we believe that, despite the strains mentioned above, they would ac- 5 cept the situation and become reconciled to the economic and psychological problems of a Taiwan future. 23. The admission of Communist China to the UN would be a serious psychological blow to the National Government. In the Nationalist view it would signify world acceptance of Communist victory in China, US unwilling- ness or inability to prevent this acceptance, and a consequent further weakening of pros- pects for a Nationalist return. While it would accelerate the forces of deterioration, we be- lieve that for the immediate future there would be no collapse of National Government authority. 24. The long-term staying power of the Re- public of China will be determined by the policies of the US, by developments within Communist China, and by the ability of Na- tionalist leaders to adjust to life on Taiwan. Indications that the US was losing interest in supporting the National Government, and that Communist China was gaining interna- tional prestige and internal strength and sta- bility, would accelerate divisive and defeatist tendencies on Taiwan. Major setbacks or persistent terrorism on the mainland would raise Nationalist morale and purpose. Con- tinued emphasis on the objective of return to the mainland would lead to political frustra- tion and would require increasing levels of US support to prevent economic collapse. Con- versely, a limiting of political ambitions to the horizons of Taiwan and a concentration on long-term economic development might make the island politically and economically viable, though it would still need some US support. T ri rOtrra Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27 : CIA-RDP79R01012A009900040006-5 APPENDIX A MILITARY Army 1. Army units are currently at 93 percent of authorized strength with total personnel of approximately 425,000. All infantry divi- sions have completed combined-arms train- ing. The army at present has about 80 per- cent of its authorized equipment, with major shortages existing in communications equip- ment and cargo transportation vehicles. Equipment on hand is considered to be ade- quate for a defensive mission only. Substan- tial improvements are being made in person- nel and logistics management procedures. Over-all combat efficiency of the army will probably improve over the next few years, particularly in logistical support. Morale of the Nationalist army is considered to be good with no indication of probable change. 2. There are no records available as to the exact ratio of Taiwanese to mainlanders in the army. Various releases from the Na- tional Government have acknowledged that about one-third of the armed forces are Tai- wanese. It is not expected that the ratio will go beyond 42 percent for the next two or three years. Beyond that date the ratio will begin a steady climb which will continue for an indefinite period. The National Govern- ment apparently fears that induction of Tai- wanese will reduce the efficiency of their forces for offensive action against the main- land. It is seeking by political indoctrina- tion of inductees to make the Taiwanese feel that they have the same patriotic duty as soldiers from the mainland, and is trying to insure that no combat units are assigned a disproportionate share of Taiwanese. Cur- rently, the Taiwanese appear to be fitting into the combat units successfully and there are no indications that they will be any less efficient as fighting men than the main- landers. 3. The capability of the GRC Army for the de- fense of Taiwan and the Penghus is dependent upon outside air and naval support. The lack of local sea and air superiority reduces the GRC defensive capability, but the army could probably conduct a tenacious defense which would be costly to an invading force. The offshore island garrisons continue to im- prove their defensive capability, but, again, local air and sea superiority would be needed for a successful defense of the offshore islands. Navy 4. The personnel strength of the Nationalist naval establishment totals 57,748 including 25,076 marines. The Navy, augmented by one ex-US destroyer and 5 ex-US PC's (which will replace 5 patrol escorts (PF) now in serv- ice) , consists of the following: Destroyer (DD) Escort Vessel (DE) Patrol Escorts (PF) Escort (PCE) Sub-chaser (PC) Sub-chaser (SC) Motor Gunboat (PGM) Motor Torpedo Boat (PT) Mine Vessels Minelayer Coastal (MMC) Fleet Minesweeper (MSF) Coastal Minesweeper (MSC) Miscellaneous Amphibious Vessels Aux. and Service Craft 4 5 11 2 16 1 2 1 2 6 2 36 '77 5. The general state of training is good. Logistical support of the offshore islands, which only a little over a year ago was in a very bad state, has been notably improved. Over-all combat effectiveness has continued to show improvement, with operational availa- bility on the increase due to improvements in CONFIDENTI-0 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 SECRET maintenance and overhaul and improved operating procedures. The GRC Navy has displayed a considerable increase in aggres- siveness while on patrol in the offshore islands area. Taiwanese presently comprise about four percent of the Navy's personnel. Morale within the Navy which last year was rated as fair, is now rated as good. 6. The GRC Navy is still incapable of engag- ing in sustained combat at any great distance from its major points of supply or of engag- ing in large-scale combat against the full force of the Chinese Communist Navy. The GRC Navy can lift and support only small raiding and reconnaissance parties. It is pri- marily a defensive force, and even in this field its capabilities are limited. 7. The Marine Corps with a personnel strength of 25,076 has the men, equipment, and skill to make it capable of executing modern amphibious operations. The Marine Type of Aircraft APPENDIX A Corps continues to have the capability of planning and executing an amphibious opera- tion involving the division and brigade against light to moderate resistance providing adequate naval and air support is provided. Taiwanese comprise about 26 percent of the enlisted strength of the Corps. As the ratio of Taiwanese in the Corps increases, the effec- tiveness of the Corps as an assault unit may gradually decline. Air Force 8. No significant changes in the over-all strength and organization of the Chinese Air Force (CAF) have occurred, with the excep- tion of a slight augmentation of the Tactical Reconnaissance Group. That unit presently performs daily photo and visual reconnais- sance missions with RF-84F's and RF-86F's. The coverage of that unit will be extended by the addition of 2 RB-57's, which are sched- uled for delivery within the year. CAF Air Order of Battle Jet Piston Fighter Light Bomber Anti-Sub Warfare Transport Transport Helicopter Trainer Miscellaneous TOTAL Personnel 323 30 9 19 140 4 165 8 353 Aircrew 345 Non-Aircrew Pilots Pilot Trainees Other Aircrew Ground Military Ground Civilian TOTALS 1,347 173 1,013 78,206* 852 (Officer Spaces) 2,533 79,058 * Includes 790 pilots assigned to duties not involving frequent flights. SECRET Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 9. There are six major airfields on Taiwan, all with generally excellent supporting facili- ties, and two more are under construction. Three of the six are capable of supporting operations by all types of USAF jet fighters and jet light bombers. Of the two airfields under construction, one will probably be capa- ble of supporting B-47 or B-52 bombers. 10. Taiwanese now account for 42 percent of airmen but only two percent of officers. The Taiwanese are generally better educated than the recruits presently in the CAF from the mainland, and their induction will raise CAF standards. However, CAF' commanders ap- parently doubt that the Taiwanese would sup- port an invasion of the mainland. This lack of confidence in the Taiwanese has led to their being assigned less critical and less sensitive duties in the CAF. The CAF Com- mand also tries to limit the number of Tai- wanese in tactical organizations to a maxi- mum of 33 1/3 percent of the total strength. However, the Taiwanese are treated fairly and react enthusiastically to service in the CAF. Taiwanese induction has not detracted from APPENDIX A the comparatively high morale of the CAF. The most significant trend is the steady im- provement of operational capability, resulting from more effective training, personnel utili- zation, and maintenance. 11. The CAF is incapable of defending Taiwan against a determined, large-scale air assault by the Chinese Communist Air Force. The short operating radius of the predominantly fighter and fighter-bomber equipped CAF in- hibits effective use of these units in the de- fense of the offshore islands against the stronger Chinese Communist Air Force. The CAF, by means of daily photo and visual reconnaissance missions, is capable of pre- venting a major assault from achieving sur- prise. The CAF can also patrol the straits and interfere with the flow of supplies into coastal areas opposite Taiwan. Though it would probably be eventually eliminated by enemy air superiority, the CAF could initially give effective support to GRC ground forces either in opposing an amphibious invasion or in possible offensive operations. CONFIDEIfff.rt1 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 APPENDIX B APPENDIX B Table 1. ECONOMIC INDICATORS Category 1951 1952 1953 1954 1955 1956 1957 Agricultural production index 100 111 122 123 126 133 Industrial production index 100 135 176 184 202 207 GNP in 1955 prices (millions of US$) 757 901 ? 946 1,067 1,135 1,220 Per capita GNP 1 93 107 109 117 121 124 (US dollars) Wholesale price index 100 123 135 137 157 177 1902 1 The population data have been lowered to conform with the 1956 census, result- ing in a somewhat higher per capita GNP than shown in NIE 43-56. 'The wholesale price index has leveled off since December 1956, with the index for specific months moving as follows: 1956 December 188 1957 January 188 February 190 March 190 April 190 May 189 June 190 Table 2. TAIWAN'S EXTERNAL ACCOUNTS 1951 1952 1953 1954 1955 1956 Exports, f.o.b. 90 119 125 94 131 125 Imports, c.i.f. 150 217 200 211 193 225 Trade balance ?60 ?98 ?75 ?117 ?62 ?100 Balance on current account ?60 ?98 ?85 ?123 ?72 ?110 Grants from the US 61 92 83 85 91 96 Changes in gold and foreign exchange reserves (increase) ?.11 ?4 ?17 +23 ?25 +2 Other transactions* 10 10 19 15 6 12 NOTE: From exchange settlement statistics adjusted to include aid imports. Calendar year data. * Including all capital transactions and errors and omissions. SEC-RE-. 9 PULIFITYMMT I a", Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 APPENDIX C DIPLOMATIC STATUS OF THE REPUBLIC OF CHINA AND COMMUNIST CHINA 1. Countries with which the Republic of China maintains diplomatic relations (Embassies or Legations) : Country Chinese Representation Foreign Representation in the country in China Argentina Embassy Australia Embassy Belgium Embassy Bolivia Embassy, c/o Chinese Embassy, Peru Brazil Embassy Canada Embassy Chile Embassy Colombia Legation Costa Rica Legation Cuba Legation Dominican Republic Legation, c/o Chinese Embassy, Panamp. Ecuador Legation France Embassy Greece Embassy Guatemala Legation Haiti Legation, c/o Chinese Legation, Cuba Holy See Legation Consulate Embassy Consular Agent Legation Embassy Legation (Papal Internunciature) Honduras Legation,c/o Chinese Embassy, Panama Iran Embassy Iraq Embassy Italy Embassy Japan Embassy Embassy Korea Embassy Embassy Lebanon Legation Luxembourg Legation, c/o Chinese Embassy, Belgium Mexico Embassy Nicaragua Legation Panama Embassy Embassy Peru Embassy Philippines Embassy Embassy Portugal Legation Legation El Salvador Legation, c/o Chinese Embassy, Panama 10 C ONF IDENTi AL Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 APPENDIX C Country Chinese Representation Foreign Representation in the country in China Saudi Arabia Embassy Spain Embassy Embassy Thailand Embassy Embassy Turkey Embassy Embassy United States Embassy Embassy Venezuela Legation Legation Vietnam Legation Legation 2. Countries with which the Republic of China maintains consular relations only: Cambodia Consulate New Zealand Consulate Consulate United Kingdom Consulate (Recognizes Peiping regime) Union of South Africa Consulate Consulate 3. Countries with which negotiations are in process for establishment of diplo- matic relations: Liberia Jordan Paraguay 4. Countries recognizing Communist China: (a) UN members Afghanistan Albania Bulgaria Burma Ceylon Czechoslovakia Denmark Egypt Finland Hungary India Indonesia Israel Nepal Netherlands Norway Pakistan Poland Rumania Sweden Syria United Kingdom USSR Yemen Yugoslavia (b) Non-UN members Switzerland (c) Communist Regimes supporting Communist China: Byelorussia (UN member) Ukraine (UN member) East Germany North Korea North Vietnam Outer Mongolia 11 _ Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 ? LI 1 I1/4,/ ? / ?'i .:,?' / .1( MinthIng 1044 , , , C110 Ituan-rou ?F 111?C110 ' ttiltA-TSU ? ...._ HSI-CH'OAN PEI-KAN?T'ANG SHAN Matsu ? Defense Command , t. TAO 22, 0.00_Tr_oop s TAIWAN STRAIT AREA 11, Mann airfield ?26?? ? .? Yung-an \ 1 \ r--- i i Yung.rai. / Chang-to .----- PAI?CH'UAN LIEH (WHITE DOGS) TUNG-CH'LIAN TAO?j TAO I Combat radius of F.84 in 0 Secondary airfield grcantrVelr fr% ? Naval base ' 2.1000 lb. bombs plus . I 8.5" (HMO rockets. Tali en F U K ----L.-4 Chang-p'ing Na an / AC ..wsci / 12 i V / Te-hua / I I YU N ....-- ru.rien -ch'un HSIEN- / / VI V / AN-CH'I I ?:'., 6. ,s'-*, I8 r Hui-an / 4 b.. . HSING.111.:A 5ME I-CHOU . _., Fueh'ing .. ? . pe.? ': ___? 4 HAI o WA.N 0. ...0 ing-ran NAN ..) I H TAO *TA9-,... ? TAN TAO \ 0 Naval station "4-4? Selected railroad ? SECRET (' ? ? rj, SUNG UPI ' ? YUA ? SHAN ? II >.4 y Wing-rung- Selected road - . 25' ?2 ? p. 14 I MIL T / / ? / , / CHIN-CHIAN \ .... / ...??0 / 1 . ? // T'ungen I / ill 1\ Ch'ang-rai / / Al" / .tnotii ?,?,....., /44 -.....?;..,- ?tool,. A) ?i Et-0.,__L____ , opp 4 I CHIN?MEN TAO Hc ' h' --...A1 Q (QUEMOY) U ER ? '''. '/4-1./ A / IONSTRUCTIO . '9,,,,, ?, I, SU kin, _ / Lt QUEMOY Ihinmen 1? ? C / Chang.p'u TUNG-TING HSODefense Colinmand CHAPEL I.) ? ? / -'D WUCHIU HS ' liVihiti Area Defense Command . (Navy) ISL HSIN CHU H IN.C141.1 -1, j" -1 ii 4IT ' tkr,,,aiyiGkuu?, NG 4 ?i; -- ' T'AI.CHUNG tih. Chung b Ham-Iran Lung-Ian? Kuon.hsi klan , , I ay 84,000_Troups 0 24 ' _2 likt. . ?\k 4 ' v.; ? 0 Defense T UNG-SHAN TAO 16t : i? 1 / 1 i I / ? NAN?P'ENG CHIIN?TA0 NS Penghu Command ,. 000 Troops ? .- , akunGi r PENGHU (PESCADORES) o - MAKUNG . .' * .? v Hsi-lo Hu?we' Yun-IM Feithian tzu i CHIA-I I CN!,/ , 0 WF/t Mill Chia-li ii 1 * f ? Yuan-hr SIW .??.YPE11 AIW ..... Pu.i .11110.1' LA KI. rA,. ualien P A C AN eneral Headquarters Ching t ad Yu-li Taiwan Defense / 310,000 ) 006 Hsin-chiang ) / I , IFIC Army Command Troops Troops 2 , ? 23 ' ? 2.5 50715 TAI KANG 100 An-ping I T'Al4AN NAN Orkshan SHA Kang.sha \ $ .;? PING TUNG Too-yin 'A t.t f ' k Ping-lung Ki10.11SIUNG Tungthiang 0 ir 0 C ( Tat-lung '12 HUO-SHAO TAO NAUTICAL MILES 25 SO 7.5 90 \ \111, STATUTE MILES ? 2.5 51? 7.5 190 KILOMETERS :3HUNG-T'OU HSLI 7 22? ?22' 113 119 120 121- o 122 25651 9.56 (First Revision 8.57) _szeRipir- CONFIDENTIAL Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5 ,SEC-RET-- 'CONFIDENTIAL comentvvre -SECRET Declassified and Approved For Release @ 50-Yr 2014/02/27: CIA-RDP79R01012A009900040006-5