INTELLIGENCE REPORT PEKING-TAIPEI CONTACTS: THE QUESTION OF A POSSIBLE 'CHINESE SOLUTION' (REFERENCE TITLE: POLO XLVI)

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CIA-RDP85T00875R001000010045-7
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59
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December 22, 2016
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May 5, 2010
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45
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December 1, 1971
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IR
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Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Secret ILLEGIB DIRECTORATE OF INTELLIGENCE Intelligence deport Peking-Taipei Contacts: The Question of a Possible "Chinese Solution" (Reference Title: POLO XLVI) Secret RSS No. 0055/71 December 1971 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 NV A R N EN(. This clotUnreiit cuntairi'. inforuraticnr allc cling tht? naticmal cicl:'nsc (,f the l'uitt cl States. ?ithiri the mcaniu(T cri 'I itlc 1`i, scc tiuns 7'.6 ;urcl -19.1. of the US C odc, as ,nncnclcci. Its transrrris',iori ur r( \?elation of ils cunlerits to or re- eiht In' all rrriauthuri:,-cl luvvir is liruhil,it"cl lly law. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 vii V J. % J..A .4 PEKING-TAIPEI CONTACTS : THE QUESTION OF A POSSIBLE "CHINESE SOLUTION" This study details known contacts over the years between Chinese Communist and Chinese Nationalist figures, judges the intentions of Peking and Taipei, and advances certain judgments as to whether the present trauma of the Chinese Nationalists will cause them to become interested in an accommodation of some kind with Peking. Available evidence is firm in very few instances; the study's judgments are accordingly advanced with caution. That Communist and Nationalist individuals have been interested from time to time in at least learning the other's views is clear: we know definitely that there have been a few initiatives by Chinese Communist intermediaries, from time to time, and some contact between Chinese Communist and Nationalist figures in third countries. It seems fairly certain that, until recently at least, the Taipei leadership has not been interested in sounding out Peking for the terms of any kind of deal -- that Nationalist interest, if any, has been confined to individual figures whose motives have been obscure. Peking's interest has apparently been principally that of attempting to undermine Nationalist morale and to sow discord between Taipei and the US. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Zl',UKL .L This study concludes that no significant Nationalist vulnerabilities to proposed accommodation have developed to mid-1971, but that Peking's expectations and confidence in this regard are now almost certainly on the sharp rise. Indeed, a clear Nationalist interest in possible deals will probably soon begin to appear -- but still confined to in- dividuals. Beyond the near future, and especially as accumulated misfortune besets Nationalist leader- ship, such interest will doubtless grow. Whether it comes to be the policy of the Nationalist lead- ership depends on a myriad of forces, chief among them the Nationalist succession, the effect of Taiwanese pressures, and, most importantly, the state of Nationalist confidence in outside guarantees of Taiwan's defense. Given a worst-case combination of such forces, susceptibilities to Peking will mount. Meanwhile, Peking will in any event grow more apprehensive that its Taiwan ambitions may be impeded by Taiwanese -- and Japanese -- aspirations. This study has profited from constructive inputs from many offices in the Central Intelligence Agency. There is a sizable area of general agreement concerning Nationalist-Communist contacts to date, but because so much of the evidence is tenuous, and the future necessarily speculative, the views expressed in this study remain essentially those of its principal author, who wrote much of this study during an early-1971 tour of duty with this Staff. This study is based on information available to 1 July 1971. Comments on the study and its judgments will be welcome. Hal Ford Chief, DD/I Special. Research Staff SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET PEKING-TAIPEI CONTACTS: THE QUESTION OF A POSSIBLE "CHINESE SOLUTION" Contents Page SUMMARY . . . . . . . . . . . . . . . . . . . . . . . i BACKGROUND . . . . . . . . . . . . . . . . . . . . . x 1. THE CAMPAIGN FOR "PEACEFUL LIBERATION" BEGINS ?- Spring 1955 to Fall 1958. . . . . . .1 A. Public Overtures and Private Approaches..) B. Hard Line Interruption of the Campaign. 12 II. PEKING RESUMES A "REASONABLE" POSITION - Fall :1.958 to 1963. . . . . . . . . . . 15 A. Peking?s Agents Persist . . . . . 15 B. Taipei Denounces the Peace Talk Rumors..18 C. Peking's Approaches, Including Some From "High-Levels," Continue . . . . . 20 D. Evidence of Peking-Taipei Agent Contacts . . . . . . . . . . 26 E. Peking's Last Private Overture. . . . . 29 III. PEKING EXPLOIT'S ITS IMPROVED 1NrERNATIONAL PROSPECTS - Early 1964 to Late 1965. . . . . 33 A. Consequences of French Recognition. . . 33 B. Return to Peking of Li Tsung-?Jen. . . . 35 IV. THE CULTURAL REVOLUTION -? Early 1965 to Early 1969 . . . . . . . . . 39 V. PROSPECTS FOR. A "CHINESE SOLUTION"! . . . . . 43 SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 SECRET PEKING-TAIPEI CONTACTS: TIME QUESTION OF A POSSIBLE "CHINESE SOLUTION" Summary It should be noted at the outset that this study must of necessity be highly speculative. The evidence is firm only on occasion. At times the U.S. Government has been informed by Chiang Ching-kuo of approaches to Chinese Nationalist figures by Chinese Communists; at other times we have learned of such contacts only through our own clandestine means; at still other times some contact must be assumed. It seems clear that in such contacts to date there has been neither much Chinese Communist expectation nor significant Chinese Nationalist vulnerability. But the accelerating decline of the GFr's fortures -- and raison d'etre -- is bringing new forces into play which b Tx this shadowy "Chinese solution" question more to center stage. The first known Chinese Nationalist-Communist contacts, after theNationalist expulsion from the mainland, took place in 1955-1956. The apparent causes were various checks at that time upon overt Chinese Communist advances in the Taiwan Strait: the conclusion of a US-GRC Mutual Defense Treaty (December 1.954); Peking's turn (April 1955) to a new, "peaceful" foreign policy course, overall; and the initiation ;August 1955) of the US-Chinese Communist SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 SECRE'1 talks in Warsaw. It was in this context of reduced military pressures and of Peking's shift to a professed interest in negotiating a "peaceful" settlement of the Taiwan issue with the GRC, that Peking began to supplement its public overtures to Taipei by a series of private letters to Nationalist leaders -- over a period of seven years. During the same period Chinese Communist agents and officials instigated false rumors of peace talks between the two regimes. Peking also sought in various ways to entice Nationalist and unaligned Chinese leaders abroad to return "home." These "peaceful liberation" initiatives of 1955 apparently had several related objectives: to give Peking an appearance of r,iasonableness in the eyes of the world, to generate mutual suspicion between Washington and Taipei, to disturb and dis- credit GRC leaders, and to encourage betrayals. The relative emphasis on these several objectives seemed to vary from time to time. Open psychological warfare -- radio broadcasts, rumors, and written propa an da -- was predominant in early 1957 SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET 'Tr.e mop: t not. wworthy role in these Communist ir.itia t i,,F-- , 1955-4962, was perhaps that of a rather disreput.abl-. Hoag Kong character named Tao Chu-jen, who wrote i Car ous letters of enticement to Chiang Chin k " *- g?-? uc 0 C-. a period of several years. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET In any event, Ching-kuo reported Tsao's approaches to US authorities, and all of these -- and all other knova' overtures for negotiations in the years i955- 1962 -- were reportedly ignored or flatly rejected by the GRC. There is no credible evidence to the con- trary. The Nationalists apparently not only rejected the idea of peace talks but resented the notion that they might consider seriously such a course. In late 1958 GRC Vice President Chen Cheng publicly confirmed rumors and press reports that GRC leaders had privately been receiving proposals for negotiations from the Chinese Communists. The Vice President denounced these initiatives and other peaceful "liberation" gestures as attempts to divert attention from Peking's failure to interdict the offshore islands in 1958, and to create distrust between Taipei and its US ally. The GRC took this step, three years after Peking's effort began, only after deciding that the post-Taiwan Strait crisis rumors about peace talks required an official denial. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 S 'RFT When in January 1964 France recognized the Peking regime, the Chinese Communists, including some of the senior leaders, sought to create a snowball diplomatic effect by hinting at improved prospects for a settlement with the GRC. In late 1965 Peking received an unprecedented degree of support in the General Assembly for admission to the United Nations. But by early 1966 Peking's diplomatic activity was interrupted by the Cultural Revolution, and the disorder on the mainland during the next few years reversed the trend of international. acceptance of the Chinese Communist regime. During those years -- 1965 to early 1969 -- no Peking approaches to Taipei are known to have been made, other than some tentative, approaches made in Europe through various in'(:er::iat;ional organizations. As for motives, Peking's 1955-56 "peaceful liberation?' talk was moderately effective in gulling certain governments, and probably was viewed by the Chinese Communist leadership as worth the low-priority effort expended, The "reasonable" pooture resulted in improved public relations and diplomatic gains. Some of the initiatives probably sharpened Nationalist (:R FT Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 sensitivity to the ambassadorial talks in Warsaw between the US and Peking There was one significant "return" -- in 1965, of the aged former GRC Vice President, Li Tsung-jen -- ich was probably a product of Pekin 's ef.f , Vice President Chen Cheng's death in 1965 removed the only apparent threat to Chiang Cliing-kuo's primacy after the death or retirement of his father. There were, no consequent defections by GRC leaders, in response to the Communist enticements, no apparent major demoralization among the Nationalists, and no app;-eciable disturbance of the Taipei-Washington relationship. In the spring of 1969 the mainland situation began to stabilize - more or less - and Peking moved to rehabilitate its diplomacy. Again, the Chinese Communists were interested in appearing reasonable and in encouraging the belio,f that the "peaceful liberation" of Taiwan was not only desirable but probable. Diplomatic successes in late 1970 and 1971 have facilitated Peking's strategy of affecting patience and moderation about Taiwan, and of trying to generate distrust between Taipei and Washington. Chinese Conimunis;, figures have meanwhile been busily spreading reports that the GRC is nearing the end of the road and that Taiwan will eventually be assimilated back into China. Indeed, Peking's expectations have duubtiess been raised sharply by events of the past year or so. Communist China is in the process of enjoying the breakthrough in international status which it has SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 long coveted, and Mao and (:hou En-lai must judge that the dimensions of this breakthrough will markedly improve Peking's political and psychological leverage against the Nationalists. Chinese Communist figures have made certain statements of late apparently aimed at capitalizing on rising vulnerabilities, and we must assume that these statements are being paralleled -- or shortly will be -- by attempts to make private contact with Nationalist figures or intermediaries. We should fi.rther assume that Peking may sweeten its offers somewhat, in the expectation that the GRC will have virtually no place to go, and that time may work to Peking's advantage. Even so, it would seem unlikely that Mao or his successors will offer any deal in which the small print adds up to much more than honorific status for ex-Nationalists. For its part, in accelerating diplomatic isolation, and apparently uncertain of US intentions, the GRC is faced with ueclining morale, and doubtless will experience increased uneasiness over Taiwanese assertiveness, some greater internal security problems, and heightened individual Nationalist mainlander interest in various "worst case" options. Although disgruntled or despairing Nationalist figures who have left Taiwan thus far have for the most part settled in Hong Kong, Southeast Asia, or the USA, some may come to choose the China mainland -- or defection in place. To important measure, the degree of receptiveness which develops among the Nationalists to Peking will depend upon the feasible options open to them which circumstance and numerous variables bring. For the near term -- so long as the Chi.angs and their mainlander colleagues have no reason seriously to doubt that the US will defend Taiwan against attack -- it seems likely that the respective personal and collective benefits to them SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SI~, CIRF.'1' of a model Taiwan province (still called "China") would outweigh any enticements Mao or his heirs would offer. Indeed, Nationalist resistance to a deal will probably tend to remain generally staunch as long as certain circumstances prevail: retention of the GRC's still-formidable economic, administrative, and security capabilities; Taiwanese disorganization and political prudence; some continued international status and role fo_ the Republic of China; and, above all, reasonable confidence in a US defense guarantee of Taiwan. But some of those may give way. And, additional variables will be at work: the longevity of Generalissimo Chiang Kai-shek now 35) and of Chiang Ching-kuo ; the. attrition of time upon mainlander dominance of the great Taiwanese majority; and the existence of certain other options probably open to some main- lander Nationalists. / by and large, the Taiwanese will want independence, not still another. -- and worse -- master. To the degree that an effective Taiwanese independence movement arises, we can expect it to become not only an increasing object of Peking's concern, but in effect a source of pressure upon Peking to undermine the will of the GRC before Taiwanese independence -- possibly backed by Japan -- becomes a realistic threat to Peking's objectives. The long-term prospect -- as well as can be judged at this time -- may be one of increased Taiwanese assertiveness; some resulting GRC crackdown; some decline in stability on Taiwan; and some move toward investigating SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET options other than dependence upon the US -- e.g., seeking increased support from Japan, the USSR, or other outside countries; making the best of things on Taiwan; individual flight abroad; or individual accommodation to Peking. In the event, however, that US or other outside guarantee of Taiwan's security should come to appear uncertain, then the long-term and troubled outcome may remain to be worked out between the great weight of China and the insular entity of Taiwan. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Since the founding of the Chinese People's Republic in 1949, the Chinese Communists have never deviated from the position that Taiwan is an inter- nal question to be settled by the Chinese themselves. The Communists have been careful to foreclose none of the options about the means to the "liberation" of Taiwan. They have shared consistently with the Government of the Republic of China (GRC) in Taipei the unqualified position that Taiwan is a part of China, and from t ii,ie to time they have re-emphasized the legal and historical basis of that position. Peking views any advocacy o f . Taiwan's autonomy -- e . g . , the Taiwan Independence Movement -- as an "imperialist" intrigue, while Taipei has suppressed Taiwan indepen- dence leaders as a threat to Nationalist power on Taiwan and subversive of the GRC claim to be the government of all China. Prior to the defeat of Japan in 1945, the Chinese Communists favored independence for Taiwan, but when the GRC accepted Japan's surrender on the island and occupied it, the Communists shifted to advocacy of an "autonomous" Taiwan within China. It was not until 1949, when Chiang Kai-shek's exiled control of Taiwan posed a continuing challenge to the legitimacy and security of the People's Republic of China, that the Chinese Communists adopted the uncompromising position they hold now. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 51;CRET The legal status of Taiwan is arguable. Following China's defeat in the Sino-Japanese War, it was ?_eded to Japan. During World War II the Allied Powers unequivocally committed themselves in the Cairo Declaration of 1943 to restore Taiwan to China. In the peace treaties Japan signed with the Allied Powers in 1951 and, separately, with the GRC in 1952, Japan renounced sovereignty over Taiwan but did not hand it specifically to the GRC. Thus while Poking and Taipei hold the Cairo Declaration to be an unchallengeable basis for their claims, Taiwanese independence leaders, citing political developments since 1945, including the denial of Taiwanese freedom under the GRC, argue that legal sovereignty is still to be determined in the absence of Japanese disposition of the territory. These advocates point out also that Article 103 of the United Nations Charter provides for self-.determination as a principle in fixing the status of former colonial territories. However, sirce 1949 the political and military realities of Natior;,!i t control have eclipsed the juridical ambiguities about Taiwan's status. U?i'A:I 1955 Peking's pronour,ccements about try "iibera.tior." of Taiwan were belligerent. The out.l:,rE:ak of' th?: Korean VYar in 1950 and the neutrali- zation of. Taiwan had nullified Communist aspirations regarding a military takeover of the island, but Peking continued to address the question in threaten- ing language. When in December 1954 the US signed a Mutual Defense Treaty with the GRC, the risk of any move against. Taiwan became clearly unacceptable, especially since Peking's Soviet ally had in the Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET meantime indicated that support for Peking's claim to Taiwan did not extend to military support for 'liberation" of it by Peking's resort to force?. In light of the military impossibility of -seizing Taiwan, Peking shifted to the political tactics of sowing Suspicion between Washington and 'Taipei and of trying; to defect prominent Nationalists. This paper surveys the most important Communist-initiated letters which are known to be authentic probes, and will offer an analysis of their role in the struggle between Peking and Taipei over the past two decades. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 71Sl~Kl, l 1. THE CAMPAIGN FOR PEACEFUL "LIBERATION" BEGINS - Spring 1955 to Fall 1958 A. Public Overtures and Private Approaches On several occasions during the spring of 1955 Chinese Communist Premier Chou En-tai offered publicly to negotiate the status of Taiwan with the "Taiwan authc 'ities.1' As the first hint of seeming flexibility in Peking's position on the issue, Chou's overture was calculated to give Peking an appearance of reasonable- ness and to portray the US as the intransigent and offending party. The offer was ignored officially by the CRC, but in July 1955 it was rejected by a cabinet- rank spokesman in Taipei who requested anonymity in conversation ;pith foreign journalists. Referring implic.:}; v to the forthcoming US-Peking talks in Warsaw, the spokasma.n said that Chinese Communist double talk might fool some Americans but not the Chinese people.* Since '.;hat time, the themes of Chinese Communist perfidy and of CRC disdain for those who failed to understand it *w~ej"s"sock ?Iimes, 31 July 1955. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET have never been absent from comments about dealing with Peking which Taipei has issued publicly, and which GRC leaders have made privately to US officials. Between August and December 1955 and coinci- dent with. Peking's public enticements, a Hong Kong Journalist, Tsao Chu-jen, sent three secret letters to Chiang Ching-kuo, President Chiang Kai-shek's son and likely successor and then Deputy Secretary General of the GRC National Defense Council. No aspect of Peking's peaceful "liberation" campaign from 1955 to the early 1960's is more puzzling than the role of this Tsao, whose secret communications to Chiang Ching-kuo in 1955 anticipated Chou En-lai's formal declaration in 1956 by almost a year. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 SECRET Tsao's three letters to Chiang Ching-kuo in late 1955 asked Chiang to send a representative to Hong Kong to receive "important information" about a Peking-Taipei reconciliation. The existence of these letters was leaked to the press, probably by the writer hir;-self; only after the leak did Chiang divulge the letters to US representatives in Taipei. Origina- ting with a dubious figure like Tsao, this initiative was clearly not a serious approach to Taipei. It may have been encouraged by Peking's Hong Kong apparatus as a no-cost fishing expedition that might if nothing else embarrass Chiang Ching-kuo, making it appear that SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 in Peking's eyes he was susceptible to such a suggestion. By reporting the letters to US officials, Chiang, who had spent 12 years in the USSR and had temporarily joined the Communist Party there, showed sensitivity to possible US suspicions and called attention to his rejection of the approach. It is noteworthy that a US journalist had published a report that Chiang had sent an emissary to Hong Kong who returned with an offer from Peking of "autonomous" status for Taiwan and a high position for Chiang Ching-kuo; Chiang now dismissed this as a fabrication, which undoubtedly it was. In June 1956 Peking formally established i+ "peaceful liberation" posture. Chou En-lai, addrc s- ing the National People's Congress in Peking on 28 June, made an authoritative declaration of Peking's basic negotiating po, H it ion on Taiwan. This declara- tion was to be cited later by P'eng Te-huai, Chinese Communist Minister o National Defense, when he announced the suspension of the bombardment of Chin- men (Quemoy; in early October 1958. Chou En-lai said in June 1956: "Now on behalf of the Government I formally state: we are willing to negotiate with the Taiwan authorities on specific steps and terms for the peaceful liberation of Taiwan, and we hope that the Taiwan authoritie3 will send their representatives to Peking or another appropriate place, at a time which they consider appropriate, SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 D.Lflitr, .1 to begin these talks with us. In order to unite all patriotic forces to realize at an early date the complete unification of our motherland, I wish here to declare once again that all patriotic people, regardless of whether they joined the patriotic ranks earlier or later, and regardless of how great the crimes they committed in the past may have been, will be treated in accordance with the principle that patriots belo.ig to one family and with the policy of no punishment for past mis- deeds. They are all welcome to perform meritorious services for the peaceful liberation of Taiwan, and will be duly rewarded accord- ing to the degree of their merits and provided with appropriate jobs." This patronizing statement, committing Peking to nothing, was a strong reaffirmation of Chinese Communist "reasonableness" on the question of Taiwan. It was consistent with the relatively moderate style of policy at the time -- at home and abroad. It was designed to gain a wider and more attentive interna- tional audienc(, for Peking's attempt to set the claims of the family if the Chinese people against the alleged interference and aggression of outsiders. Chou provided no details about the shape of a political accommodation with the GRC, but a diverse assortment SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SFC`,R T of specific proposals was to be communicated privately to GRC leaders over the next few years. The tone of Chou's declaration and its basic themes -- forgive- ness, flexibility, leniency, patriotism, and partici- pation -- characterized overtures from the Communist side from that time on. The declaration set the stage for Peking's effort during the following decade to appear "reasonable," to promote distrust between the GRC and the US, to weaken Chinese Nationalist morale, to sow suspicion within the GRC leadership, and to encourage defections and betrayals in Taipei. There was nothing in Chou En-lai's statement to suggest the expectation of a positive response, and there was in fact no response at all. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 le Next 2 Page(s) In Document Denied STAT Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 S FC`.12 F r In early 1957, at about the time Tsao Chu-Jen was writing to Chiang Ching.-kuo and the others, Peking stepped up its propaganda directed to Taiwan and its efforts to defect ex-mainlanders in Hong Kong. Radio broadcasts carried a large number of personal appeals by mainland residents to individual Nationalist leaders and their families. These appeals tried to 9xploit homesickness and stressed patriotism and reconcilia- tion. Rumors were planted concerning high-level discussions between Peking and Taipei, and there was an attempt to generate pressure for peace negotiations on the GRC among overseas Chinese communities. This 1957 campaign began to disturb the GRC leadership. Taipei, dependent upon the US and seeking US support for eventual recovery of the mainland, did not want to be taken too much for granted, but neither did it want suspicion of GRC intentions to develop in Washington. The rumors of peace talks were starting- to find foreign believers, even in embassies and foreign offices around the world where the rumors were traded and reported on. A sense of the atmosphere at the time is suggested by the fact that US diplomatic and intelli- gence officers in Taipei and Hong Kong were urged periodically to evaluate the possibility that GRC- Peking negotiations were about to occur, or were already in progress. President Chiang Kai-shek was personally concerned, and the question of counter-psychological Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 warfare was discussed at Kuomintang Central Committee meetings. But no counter-campaign was launched -- not then -- probably because of a judgment that any formal reaction would give the rumors a measure of credibility, of serious Nationalist concern. GRC leaders, when asked about peace talks with Peking, simply dismissed the idea as preposterous. And it was preposterous, but GRC sensitivity to the impact of the rumors was real, just as Chiang Ching-kuo's personal sensitivity to the letters from Tsao Chu-jen had induced him to divulge the letters to US officials and to affirm his rejection of the suggestion they contained. B. Hard-Line Interruption of the Campaign By the early summer of 1957 the Chinese Commui.ist leadership was shaken and disillusioned by the discon- tent that surfaced during the Hundred Flowers Movement. In June the "anti-rightist" campaign began, and domestic developments eventuated in the assertive hard-line measures of a year later, the "people's communes" and the Great Leap Forward. Foreign affairs meanwhile moved toward significantly hardening Chinese positions with respect to the Soviet ally. Meanwhile, in November 1957, Chou En-lai granted an interview in Peking to the editor of Suddeutsche Zeitung, the leading Munich daily.* Chou reaffirmed *Issue of 19 November 1957. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 the Taiwan issue as an internal Chinese question, stating that Peking might be willing to recognize Chiang Kai-shek's position as "leader on Taiwan." Thus he compromised the private approaches made during the previous year and cast President Chiang in the role of a powerless supplicant.. Chou in this interview accused the US of Pursuing a Two-China concept, which he said Peking would never accept., and he asserted that the US would never allow a Nationalist attack on the mainland. Therefore, according to Chou, Chiang Kai-shek would have to choose a way out, and nothing but the date (of a deal with the Chinese Communists) was left for him to decide. When asked by the editor whether Peking had any confidential connections with Chiang or his inner circle, Chou seized the opportunity to feed possible US suspicions of GRC intentions: "If we had any official (connections), the US would let Chiang down." Peking generally ignored Taiwan during the momentous events of 1958, until 23 August, when main- land batteries in Fukien Province began the shelling of Chinmen Island, Mao Tse-tung a few -weeks later denounced the "US occupation of Taiwan." By September Peking had retreated to a face-saving pretense that the "liberation" of the offshores or of Taiwan by force had never been its intention -- Peking having been compelled to back off by effective, US-supported GRC counteraction, and by having learned that Moscow was not about, to bail Peking out. in the, event, of a major confrontation with the US, SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 II. PEKING RESUMES A "REASONABLE" POSITION - Fall 1958 to 1963 A. Peking's Agents Persist In September 1958 -- during the offshore island crisis but prior to the Chinese Communists' backing- off -- Tsao Chu-jen appeared once again, sending letters in that month from Hong Kong In any event, Tsao proceeded to leak the story about the conditional bombardment suspension to a Singapore newspaper, possibly a self-serving indiscretion but more likely a Peking-inspired effort to amplify publicity favorable to the pose of decency and conciliation. Tsao Chu-jen's September 1958 letters contained terms for the "peaceful liberation" of Taiwan, terms which Tsao said had the approval of the Peking author- ities. These included the retention of Chiang Kai-shek's SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 control of civilian and military affairs on Taiwan, Chinmen to become a trading center after the with- drawal of Nationalist troops, Taiwan to become an autonomous area "like Tibet and Sinkiang" (:) on a date to be determined, and the Kuomintang to remain an independent political party. Tsao described mainland progress as "terrific" and urged a GRC delegation to visit, Communist China on an inspection trip. Tsao's letter to Chiang Ching-kuo said that Peking viewed Chiang as the logical eventual leader of post-settle- ment Taiwan, and that Vice-President Chen Cheng was also highly regarded by the Chinese Communist leader- ship. These terms, like those offered by Tsao more than a year earlier, may have been formulated by him- self., but were almost certainly based on Tsao's dis- cussions with persons within, or close to, the Chinese Communist leadership. They reflected Peking's interest in re-establishing an ostensibly reasonable stance -- in fact a tough, though face-saving, one for the GRC - - on a Taiwan solution, and this was paralleled at the time by Peking's demonstration of interest in renewing the talks with the US in Warsaw. Public expression was given to the shift in Taiwan policy by Peng Te-,huai when he referred on 6 October 1958 to Chou En-lai's earlier (1956) declaration, and when later, on 25 October, he said, "Chinese problems must be settled by us Chinese alone. If they are diffi- cult to settle for the time being, things can be talked over at length." In any event, when Chiang Ching--kuo showed Tsao Chu-jen's September 1958 letters to US officials, he said his father would never enter into direct negotia- tions with Peking and that the Nationalist leadership SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85TOO875RO01000010045-7 preferred any status in the free world to selling out to the Communists. Ching-kuo quoted a Chinese proverb, "It is better to be a cracked piece of jade than a whole piece of common clay." He also said that the letters would be ignored, and that the GRC leadership wanted to make certain that the US knew about these approaches lest Peking succeed in creating distrust between Washington and Taipei. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 B. Taipei Denounces the Peace Offensive By early November 1958, the Chinese Nationalists had become convinced of the need to clear the air of a new flurry of rumors about possible negotiations with Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Peking. the GRC considered Tsao Chu-,7 en and Chang Shih-chao as Communist psychological warfare agents and their letters only one element of an overall program aimed at dividing the Chinese Nationalists, eroding Nationalist morale, and rupturing the GRC-US relationship. The GRC leaders were relatively unconcerned about Tsao Chu- jen, whom they considered an "opportunist" without authentic Peking credentials, but they believed Chang Shih-chao to be a bona fide agent whose reputa- tion and influence should be 'dee`stroyed. Accordingly, in mid-November 1958, GRC Vice President Chen Cheng, in an interview with a Central News Agency correspondent, acknowledged that Nation- alist officials had been receiving letters from Peking representatives urging peace talks. He referred to radio broadcasts to Taiwan and to the spreading of rumors in Hong Kong. He denounced the Chinese Communist campaign as typically treacherous and said it was calculated to cover up both the failure of Peking's attack on Chinmen and the mainland "internal crisis." Another objective, Chen said, was to confuse the people of the world and drive a wedge between China and the US. He answered a question about US Government knowledge of the situation by saying, "The Chinese and US governments have been exchanging in- formation and opinions regularly on the peace rumors of the Communist bandits. Therefore, both the Chinese and US governments have a clear understanding of such peace rumors and have confidence in each other... " This was doubtless intended not only to reassure Wash- ington, but to give Peking a clear statement that the letters from its agents - - in case there was any doubt -- were being divulged to the US and that it was no use trying to corrode the Taipei-Washington SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 relationship. The interview was given a moderate amount of press coverage on Taiwan during the suc- ceeding two days. All papers unreservedly praised the statement, the independent papr;~rs rather more strongly than the official press. We know that in December: 1958 TsaoChu-jen said privately that Peking's peace overtures were "finished" because of the lack of any response from Taipei. (In fact, however, they were resumed in 1959.) Tsao described Peking's purpose during the three-year campaign of direct approaches as that of simply persuading the GRC to communicate, and he said that the Chinese Communists would accept "almost any terms." Since it was clear that Peking had been driving a hard bargain with Taiwan -- Tibetan status being no great new status for Chiang Kai-shek -- and knew that the Nationalists were not about to accept, Tsao's remark was doubtless another attempt to spread the idea of Peking's "reasonableness." C. Peking's Approaches, Including Some From "High Levels", Continue For a brief period in 1959 Peking reduced the level of its public attention to Taiwan. References to the hope for "peaceful liberation" became in- frequent, and routine propaganda about Taiwan de- clined. There was a corresponding decline in mainland appeals for individual defections. The GRC had ac- knowledged publicly the private approaches from Peking and had denounced these moves, and the rumors of peace talks, in a strong statement aimed at deflating the SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET effect of additional overtures and rumor campaigns. If Peking had hoped. that any of its private initia- tives, withheld from the US by the GRC but surfaced by Chinese Communist agents, might create suspicions in Washington, 'hen Cheng's statements would have liquidated such hope. Moreover, continuing preoccupa- tion with Taiwan would have called attention to Peking's inability, demonstrated during the Taiwan Strait crisis, to do anything but talk about the Taiwan question. Finally, economic and political problems on the main- land diverted the leadership's energies to more im- mediate concerns. Nevertheless, Tsao Chu-jen once again sent letters -- urging peace negotiations -- to Chiang Ching-kuo in early January and in late April 1959. In the April letter he proposed that Chiang Ching-kuo and Chen Cheng govern Taiwan jointly after a settlement with Peking. Again the proposition fell on deaf ears. In late 1959 Peking seemed ready to re-open the "peaceful liberation" campaign on a large scale. The release -- after a decade -- of 30 Kuomintang "war criminals" was announced on 4 December, and Peking beamed a special broadcast to Taiwan about this event. Chiang Ching-kuo told a US official that he regarded the release of prisoners as an extremely significant development, foreshadowing a new peace campaign. He said he had evidence that Peking's agents were again in Hong Kong to promote peace talks. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 QVC4 DIP I" Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 The only new idea in the purported Chou mes- sage was the offer of mainland help to Taiwan in case of "need." This could have been a hint to Chen Cheng of Peking's interest in dealing with him directly and privately. The Nationalist disclosure of Chou's message to US officials indicated that the GRC would treat -- and SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 would regard -- the initiative in the same way as previous private approaches from lesser Chinese Com- munists. Whether or not Chou En-lai himself was in fact behind this initiative, the message was appar- ently intended to exploit rivalry between the Vice President and Chiang Ching-kuo and to stimulate suspicion of US policy concerning the offshore islands. SFC;RFT Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET Beginning in mid-1960, Peking was concerned or wanted to appear concerned -- about possible US support for the Taiwan Independence Movement and had hoped that GRC sensitivity on this issue was increasing. Fei I-min in Hong Kong seemed pre- occupied with the question in September 1960 when he contended, erroneously, that Thomas Liao, the leader of the Taiwan Independence Movement in Japan, would, soon visit the US. Expecting his remarks to reach the GRC leadership, Fei said there would be an "almost unconditional approach" from Peking to Taipei and that although the Communist flag would have to fly over Taiwan and foreign affairs be handled by Peking, the GRC leaders otherwise could "do as they pleased." This was of course an excessively charitable statement of Chinese Communist policy to- ward Taiwan once the island had, like Tibet and Sinkiang, become "autonomous." In November 1960 Chou En-lai, discussing the issue of Taiwan with Edgar Snow said: Since it has been possible for China and the US to hold ambassadorial talks in Geneva and Warsaw, talks can also be held at the same time between the Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET Central Government of China and the Chiang Kai-shek clique. This was the public component -- designed to persuade international opinion that Peking considered negotia- tions with Taipei feasible -- of Chinese Communist approaches to the G RC during the previous year. There were no additional overtures to Taipei until July 1961, when the Kennedy Administration had been in office about six months. SECRET 25X1 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 SF ,RF171, Also in July 1961, Tsao Chu-jen sent another letter to Chiang Ching-kuo containing the proposal that Chinmen and Amoy be joined as a "buffer zone" and a "free port." Then in November 1961 and again in March 1962, Tsao wrote Chiang Ching-kuo urging a Nationalist investigation of mainland conditions. All of these letters were brought to the attention of US officials by Chiang Ching-kuo, who reaffirmed his intention to ignore them.* D. Evidence of Peking-Taipei Agent Contacts In Au-just 1962 the London Observer published a story by Dennis Bloodworth alleging is Peking and the "family of Chiang Kai-shek" had reached a secret agreement on the future of Taiwan. Bloodworth re- ported that during the previous three months Taipei representatives had been contacting Hong Kong "peace brokers" regularly. The reported agreement, undoubt- edly false and denounced as such by the GRC, could have been inspired in part by supporters of GRC Vice *Tsao s 1e ters of 1959-62 tended to ramble and to elaborate on minor points in a way suggesting pure invention on his part. Peking by early 1959 may have given up on Tsao as an effective instrument of psycho- logical warfare, and probably was no longer briefing him. Tsao probably wrote most of the letters during this period largely on his own, as a means of keeping a personal stake in any possible consequences of Peking's effort to disturb US-GRC relations. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET President Chen Cheng. There was evidence at the time that Chen was maneuvering to prepare for a power struggle with Chiang Ching-kuo following the death or retirement of President Chiang. The reference to the "family of Chiang Kai-shek," as Peking's counter- part in the alleged agreement, su gested an effort to embarrass the younger Chiang. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 in late June 1962 the US assured Peking through the ambassadorial talks in Warsaw that Washington would not support, and was opposed to, GRC military action. The Chinese Communists, obviously relieved, acknowledged publicly their satisfaction with the US assurances. The GRC leadership had no illusions in 1962 about the US policy of avoiding a crisis with Com- munist China. But to hear Peking tell the world that it had received confirmation privately from the US must have infuriated Taipei even though its visible reaction was, as always, low-keyed. President Chiang complained to US officials about the effect on Nation- alist morale. It may be conjectured that at this point the GRC, probably at the personal instigation of Chiang Ching-kuo, decided to set up contacts at a low level in Hong Kong. As Chang Shih-chao had pointed out several years earlier, the US was talking to Peking in Warsaw and allegedly was prepared to see Peking have the offshore islands. Then why, asked Chang Shih-chao, should not Peking and Taipei keep in touch? It was a suggestion to which Chiang Ching- kuo could have been susceptible in the summer of 1962. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Although the GRC doubtless had no intention of negotiat- ing with Peking, nor even of acknowledging any peace- ful settlement approaches from Peking's agents, Nation- alist leaders might have seen a low-level channel to Peking as a posse a means of checking on US reports to the Nationalists about the ambassadorial talks in Warsaw. In any case, after 1963 no further reporting was received on contacts between these two agents in Hong Kong. E. Peking's Last Known Private Overture In late January 1963 the third purported letter from Fu Tso-i, delivered to Chen Cheng via his sister- in-law in Tokyo, pursued the alleged "Two Chinas" threat and introduced the question of Sino-Soviet relations. It said: "at present China's foreign debts are just about paid up... In the past some people persisted in saying China was a fellow traveler with others. Now no one would believe such remarks." There was other evidence at about this time that Peking was interested in signalling privately to the Nationalists that it was free of Soviet domination and that the GRC ought to break with the US (as though the situations were parallel) and negotiate the unification of a wholly independent China. Later in 1963 an influential Chinese Communist journalist told a Hong Kong resident about to leave for Taiwan where he expected to see GRC officials, that Mao Tse-tung had never accepted Soviet control, ?;ind that China was being "oppressed" by Khrushchev, just as the GRC was being "oppressed" by the US. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 On the margin of this 1963 letter, in what Chiang Ching-kuo told US officials was Chen Cheng's hand, was written the word "never" beside a passage which offered a third period of cooperation between the Nationalists and the Communists. This no doubt reflected the true attitude of GRC leaders. The purported Fu Tso-i letter of 1963 to Chen Cheng ended, as far as is known, the seven-year pro- gram of Chinese Communist approaches to the GRC. Peking's proposals in these overtures focused on an attempt to persuade the Nationalists that union with the mainland under Peking's sovereignty would not deprive the Taipei power structure of most (or any) of its local privileges. Peking's control over foreign relations was consistently stated as a con- dition, and just as consistent was the offer to ar- range for a delegation of Nationalist observers to travel the mainland to "see for themselves." The emphasis here was always on the secrecy and security of such a delegation, although suggestions were oc- casionally offered as to its possible composition. The letters projected attitudes of patience, under- standing, and sensitivity to the dignity of GRC leaders. The GRC ignored the letters, and there is no evidence that Peking really expected much more than probing Nationalist sensitivities and attempting to sow suspicions. The initiatives and the rumors had not split the: leaders in Taipei, nor subverted the Taipei-Washington relationship, but they had compelled the GRC to issue denials from time to time and in late 1958 to confirm the Communist campaign, thus acknowledgin its possible impact on public opinion on Taiwan. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 The reason why no Chinese Communist letters have come to light since January 1963 is not clear. Others could have been sent which Chiang Ching-kuo withheld, as some evidence suggests he may have done prior to 1963. If Chiang did in fact fail to divulge later communications, knowing that the US might learn of them in other ways, then his decision to accept this risk would have indicated reduced sensitivity to pos- sible US suspicions. Perhaps -- regardless of whether additional letters were received -- Chiang wanted the US to suspect him of holding out as implicit retaliation for his own suspicions, real or pretended, about the substance of the ambassadorial talks in Warsaw. But it is equally possible that Peking abandoned the private letter device after early 1963 as no longer worth the effort. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 SFC;R FT III. PEKING EXPLOITS ITS IMPROVED INTERNATIONAL PROSPECTS - Early 1964 to Late 1965 A. Consequences of French Recognition In January 1964 France recognized the PRC -- a serious; setback for the GRC, which closed its embassy in Paris and severed all contacts with France. It was apparent that Peking viewed French recognition as a milestone in its effort to supplant the GRC in the world community and as a new weapon in its psychologi- cal offensive against Taipei. An editorial in the Chinese Communist-controlled Hong Kong daily Wen Wei Pao, in February 1964 had SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 q1RCID Uri-, hinted at a Possible new move in Peking's peaceful "liberation" campaign: "The Kuomintang on Taiwan does not need to be an empty shell. If it reforms, casts off us control, becomes independent, one would not need to speak of its returning to the bosom of the motherland to cooperate for the third time. To avoid being a completely empty shell it is only necessary for the Kuomintang to cast off the US Two-Chinas plot." This was the first time a Chinese Communist organ had intimated that Taiwan could have any future other than a return to Peking's control. The statement "one would not need to speak of its returning to the bosom of the motherland" seemed calculated to provoke discussion of a possible revision of Peking's claim to Taiwan. The inspiration for this trial balloon is unknown, but it was probably related to the high hopes induced by France's major diplomatic decision the previous month. Chairman Mao himself appeared to confirm the pose of a generous attitude toward the GRC when he talked a few months later to a visiting Italian delegation. On that occasion he spoke bitterly of Khrushchev.and, by feigned contrast, mildly of Chiang Kai-shek, stating that Chiang could be the governor of an "autonomous" Taiwan under Peking's sovereignty. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SFC, R F.T B. Return to Peking of Li Tsung-jen In July 1965 former KMT leader Li Tsung-jen with his wife flew to Paris and then to Peking, where he was to remain until his death in 1969. Li's possible defec- tion had been rumored intermittently for years and his arrival in Peking produced a (Chinese) Roman carnival. At a large press conference in Peking in late September, Li appeared in a boiler suit and recited the Chinese Com- munist line on Soviet revisionism, US "aggression" in Viet- nam, and other issues. His "bombshell" was an incredible allegation that a US "Republican bigwig" had approached him to arrange an anti-Chiang Kai-shek coup d'etat on SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Taiwan. In any event, Li Tsung-jen's return, contrary to Peking's apparent hopes at the time, did not stimu- late others. We know that Li and his old associates in Hong Kong tried to encourage additional returns or defections through private approaches, but no significant consequences are known to have resulted. After the first flush of excitement and publicity, Li was reduced to the status of a museum piece, without any official position:, living quietly and apparently in comfort, talking with old friends in Peking, and writing letters to other Chinese friends abroad, the US included. There is inconclusive evidence that Li Tsung-jen's return was motivated by personal rather than political considerations. His wife was terminally ill in Jul 1965 -- she died in Peking less than a year later SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 IV. THE CULTURAL REVOLUTION - Late 1965 to Early 1969 From late 1965 to the spring of 1969, the Cultural Revolution on the mainland interrupted Peking's psycholo gical warfare against the G RC and against th e latter's relationship with the US. Rumors heard dur ing those ye ars about Peking-Taipei peace talks were eve n less cre dible than before, and whatever agent-lev el con- tacts be less lik tween the two regimes may have occurred w ely than ever to imply any movement towar ere d 25X1 negotiations. No significant new approaches to the GRC are known to have been made by Peking during the Cultural Revolution. By late 1966 the Chinese Nationalists were observing mainland disorder with interest and hope. The spectacle of a strong revolutionary party and bureaucracy in the process of self-liquidation obviously lent force to the Nationalist argument about Chinese Communist impermanence. Chiang Kai-shek reacted to prospects for effective anti-Peking operations, but he warned his supporters that the Chinese Communist possession of nuclear SF.rR FT Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 SECRET weapons required a cautious policy. Chiang's hope was to isolate Mao Tse-tung and encourage factionalism and suspicion on the mainland. GRC propaganda used the slogans "those who are not our enemies are our friends" and 'only Mao is the enemy." In March 1967 President Chiang called for the establishment both on Taiwan and the mainland of an "anti-Mao National Salvation United Front." GRC radio broadcasts, letters, and air-dropped leaflets invited defections to the Nationalists and encouraged guerrilla warfare on the mainland. Echoing a theme from Chou En-lai's 1956 speech, the GRC told potential mainland defectors "we will not reckon past accounts." F Nationalist spokesmen, seeking to drive a wedge between Mao and his chief lieutenants, hinted willingness to do business with Chou En-lai but never with Mao Tse-tung. There is no evidence that the Nationalist attitude toward negotiating with the Chinese Communists had changed; the GRC's objective was simply to create trouble for Peking, just as Peking's various overtures had tried earlier to discredit GRC leaders in the eyes of the US and provoke suspicion in Taipei of US intentions. During 1967 and 1968 GRC hopes for significant Communist defections and the political fragmentation of the mainland were disappointed. Disorder continued, but Mao and the People's Liberation Army maintained control, few significant defections occurred, and the GRC's return to the mainland seemed as distant a possibility as ever. However, the bitter Peking-Moscow SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 quarrel persisted, and the GRC, again on the defensive, ceased its attacks on the USSR and opened discreet contacts with Victor Louis, a Soviet overseas agent. In March 1969 Chiang Kai-shek appealed for Japanese support, and again for mainland defections, in a published interview with a Japanese journalist. Once more Chiang borrowed from Peking's line by promising friendly treatment to Chinese Communist cadres who chose freedom and came to Taiwan. He repeated the familiar slogan, "only Mao is my enemy," but said that there was no possibility of accommodation and cooperation with the Chinese Communists. This last assertion -- denying the possibility of an accommodation with Peking -- seems to be the basic guideline of Chiang's policy. There is no evidence in recent materials that he has changed this thinking in any degree. Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 V. PROSPECTS FOR A "CHINESE SOLUTION" The central problem at hand now is of course whether the present precipitous decline of the GRC's world fortunes will appreciably change Chinese Nationalist lack of interest to date in overtures: from Peking. There is no historical inevitability about the unii ication of Taiwan and the mainland. "Return to the Mainland" has long been largely a ritualistic slogan resembling "next year in Jerusalem" in its political and psychological content. Peking's slogan, "liberation of Taiwan," has little more level of realism, at least while the US defense commitment is still intact. There are no grass-root passions on either the Communist or GRC sides to outlast successor leaderships and sustain the issue of unification-by-force as a political or emotional. urge; both in Peking and among mainlander Nationalists, the motivation to risk other equities over the unification question may well weaken over the long term. Nonetheless, the salvaging of some status and fortune under Peking, as part of a great new China, would -- in extremis --?almost certainly have more appeal to some mainlander Nationalists than would a future of taking one's chances with aspiring and perhaps vengeful Taiwanese overlords. The chief keys to this problem at the moment, at least, are probably President Chiang Kai-shek and the state of his confidence that the US will protect Taiwan. So long as he has no reason seriously to doubt the latter, the chances of any deal with Peking on his part seem remote. He is a proud man -- in his eyes, a great world figure; the loss of face and the implicit SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875R001000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 admission of past faults that would be involved in his accepting some kind of figurehead status with Peking are sizable forces among those holding him from accommodation. Further, he still believes in the Nationalist profession of a "Return to the Mainland." For President Chiang this watchword has taken on the quality of an article of faith, the mainland to be redeemed eventually by largely political means -- if need be by his GRC successors. There is no way of judging with confidence how that slender thread of hope would be affected in the event he should come to feel that the US security guarantee of Taiwan were no longer a reasonable certainty. A more significant actor -- and factor -- for the future is the Generalissimo's putative de facto successor, Chiang Ching-kuo. Primarily to create sus- picion in Washington of possible Chinese Nationalist opportunism, Peking in its efforts over the years has sought to promote the expectation that the younger Chiang will be "more flexible" after his father dies or retires. The possibility cannot of course be excluded that Chiang Ching-kuo, himself a "pragmatist," might feel that he could deal with a Chinese Communist leadership whose revolutionary impulses had been replaced by bureaucratic stability and low-risk policies. Such a regime, perhaps resembling in at least some aspects his own rule on Taiwan, might be managed by men whom Ching-kuo could understand SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 and -- by calculated risk -- trust. Peking has for many years targeted Ching-kuo in its peace offensives and other contacts as the key to the "peaceful liberation of Taiwan," and we must assume that the prudent Ching-kuo has secretly kept open the option of a deal, however far-out or remote this contingency. To some degree, at least, a future mainland China and he would have something of value to offer each other, the basis for settlement being Peking's sovereignty over Taiwan, in return for the guarantee of Nationalist proconsular viability on Taiwan -- and over the Taiwanese. Peking otherwise could not gain this sovereignty except by force; and, other than by a deal with Peking, Chiang Ching-kuo might have to rely on a precarious hold, over growing political pressures from the majority Taiwanese, to displace mainlander KMT rule on the island. Having raised this contingency, it should be emphasized that the chances of any such eventuality will doubtless be slight so long as Chiang Ching-kuo remains reasonably confident of US defense of Taiwan . He has a realistic appreciation of the worth of Peking's promises. The personal and political rewards of being the model boss of a model kingdom -- albeit one reduced in international status -- would doubtless outweigh his expectations from some kind of museum-piece status (even as a PRC Vice President) under the Chinese Communists. His carefully-structured apparatus on Taiwan will probably remain a fairly potent one for some time to come, until eroded over the long term by his death, extreme GRC adversities, and/or eventual mainlander decline in the face of Taiwanese fecundity. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Somewhat similar considerations would seem likely to obtain in the event that Chiang Ching-kuo should predecease his father. Ching-kuo has developed a broad and efficient cadre of lieutenants in the GRC administrative, military, and internal security establishments; and, given reasonable confidence on their part in the continuing US protection of Taiwan, they would for the most part doubtless remain loyal to President Chiang, and might be able for some time to deflect or neutralize Taiwanese pressures. A serious situation would arise, nonetheless, with the passing as well of Chiang Kai-shek. In such event, political stability might well fragment, and receptiveness to Peking mount -- the outlook for US protection of Taiwan probably remaining the principal operative factor. Beyond an interim such period, much would depend upon the particular GRC successors -- whether a collegium or not, the degree to which they were able to hang together, and especially the degree to which they were to change some fundamental attributes of Chinese Nationalist rule and begin sharing significant national authority with the Taiwanese. Upon that outcome would heavily rest Taiwan's subsequent stability, viability, and, not least, susceptibility to Chinese Communist siren songs. In the meantime, and short of such contingency, Taiwanese interest in what Peking has Lo offer will also grow, in almost any event, though to lesser extent than in the case of individual mainlander Nationalists. We know that the Chinese Communists have been successful in recruiting some Taiwanese abroad. Peking's agents also conduct various low-scale pamphlet and other psychological warfare efforts on Taiwan, and we must assume that there is a certain SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7 5L' VKL'1' susceptibility among Taiwanese students, intellectuals, and possibly military personnel to Chinese Communist themes. We know that there is some vicarious pride, among such groups, in certain of Peking's achievements of recent years. Also, Taiwanese independence aspira- tions and political organization appear overall to be somewhat fuzzy and future-tensed in nature, not items creating intense and immediate pressures. Nonetheless, Peking does not have a very fertile field in which to sow enticement among the Taiwanese. That population is fairly well aware of the relative conditions of life and opportunity in China and Taiwan, and in the main seem clearly more interested in some day creating a going Taiwanese state than in trading their not intolerable present fortunes for something like the Peking-proffered Tibetan status. Further speculation is fruitless at this time, as the Nationalist-Communist future is so much the product of so many significant unknowns. Suffice it to. say, what was the general setting of this game is now radically changed. What was a far-out contingency has become a much more relevant question -- and one deserving of close US intelligence watch -- to all the principal players. For the Chinese Communists, present circumstances doubtless expand and strengthen expectation and long-term confidence. For the respective populations on Taiwan, present circumstances now make unavoidable the long-evaded question of feasible alternatives, including even a "worst case" future of one with Peking. Not least, there are new questions of moment for the US. SECRET Sanitized Copy Approved for Release 2010/07/29: CIA-RDP85T00875RO01000010045-7