PROBABLE DEVELOPMENTS IN TAIWAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A003500090004-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 27, 2016
• Document Release Date: July 29, 2013
• Sequence Number: 4
• Publication Date: March 14, 1949
• Content Type: REPORT

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COP/ NO.
FOR THE ASSISTANT DIRECTOR
FOR REPORTS AND ESTIMATES
UNETIK T
45013
CA/
PROBABLE DEVELOPMENTS IN TAIWAN
ORE 39-49
Published 14 March 1949
This document has been
approved for releaselhrough
the HISTORICAL PROGRAM of
the Central Intelligence Agency.
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AGENCY ARCHIVES,
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ORE 39-49 SNOPIR'T
PROBABLE DEVELOPMENTS IN TAIWAN
SUMMARY
1. Communist control of Taiwan and consequent Soviet access to the island in war-
time would have seriously unfavorable strategic implications for the US.
2. From the legal standpoint, Taiwan is not part of the Republic of China. Pend-
ing a Japanese peace treaty, the island remains occupied territory in which the US has
proprietary interests.
3. The native population of Taiwan would welcome release from Chinese control,
but is not now strong enough to stage a successful revolt. The Taiwanese are increas-
ingly restive, however, because of the influx of Nationalist officials and military forces,
and will become more susceptible to Communist influence.
4. Assuming US inactivity, Taiwan will eventually pass under the control of the
Chinese Communists. In any US program to prevent this, the advantages to be gained
from the strategic military viewpoint would have to be weighed against unfavorable
political consequences, the extent of which would vary depending upon the selection
and timing of measures for implementing the program.
At the present time there appears to be no realistic means for preventing the early
establishment of a Communist-dominated government over all China. It can be as-
sumed that such a government would strive to establish its authority in Taiwan. There
is evidence that even now the Chinese Communists are seeking to extend their control
to that island, and they may be expected to continue these efforts. The Chinese Com-
munists will not finally secure their prospective victory in China until they control
Taiwan, inasmuch as the present National Government is now developing Taiwan as
a principal base for continuing the struggle against Communism. It is assumed in this
discussion that the orientation of the Chinese Communists will remain pro-Soviet, and
that a government established by them would be a wartime ally of the USSR.
Note: The intelligence organizations of the Departments of State, Navy, and the Air Force have
concurred in this report; the Intelligence Division, Department of the Army, had no com-
ment. The information herein is as of 25 February 1949.
1 SEORfffr
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PROBABLE DEVELOPMENTS IN TAIWAN
I. STRATEGIC IMPORTANCE OF TAIWAN TO THE US.
The strategic implications of Chinese Communist control of Taiwan with the
prospect of consequent Soviet access to the island, would be seriously unfavorable to
the security of the US.
Communist victories in China will probably in the near future deny US access to
all the strategically valuable areas of the Chinese mainland. This circumstance will
increase the potential value to the US of Taiwan, in the event of war, as an area for
staging troops, as a base for strategic air operations, as a naval base for controlling sea
routes between Japan and the south, and as an important link in the US defense chain
of mutually supporting islands.
Assuming that a new Communist Government in China will be oriented toward the
USSR, and would be a wartime Soviet ally, Communist control of Taiwan would allow
Soviet access to the island in the event of war. Military exploitation of Taiwan by the
USSR would increase Soviet capability for disrupting sea and air communications in
the Western Pacific area, and for conducting operations against the Ryukyus and the
Philippines.
Taiwan does not possess any significant quantities of strategic materials nor does
it have a large industrial potential. The island, nevertheless, would be an economic as-
set rather than a liability to any occupying power. Taiwan currently produces export-
able surpluses of rice, sugar, and other foods which could play an important role in the
food-deficit economies of either China or Japan. If sufficient fertilizer were available,
agricultural production could be increased substantially. Although the industrial plant
of Taiwan is small in comparison with that of Japan, its very existence in the indus-
trially backward Far East gives it a significance out of proportion to its actual size.
If Taiwan's rice and sugar were available to Japan, it would lighten the US burden
in that area by partially relieving Japan's dependence on more distant and less de-
pendable sources in Southeast Asia. The textiles and other consumer goods as well
as industrial equipment which Japan could supply Taiwan could be profitably absorbed
by the island's economy. Thus it is very probable that the separation of the economy
of Taiwan from the Chinese mainland and the re-orientation of that economy toward
Japan would under present circumstances be beneficial to Taiwan, Japan, and the US.
2. INTERNATIONAL STATUS OF TAIWAN.
At the present time Taiwan is not legally a part of the Chinese Republic. Its status
remains to be determined in the peace treaty with Japan. The island has, however,
been under Chinese administration since the Japanese surrender in 1945. China's po-
sition in Taiwan rests on (1) military control, and (2) the Cairo Declaration of No-
vember 1943, in which the US and the UK as well as China announced their purpose to
restore Taiwan and the Pescadores to the Republic of China. The US and the UK
reaffirmed the Cairo Declaration at Potsdam on 26 July 1945. Subsequently the USSR
adhered to the Potsdam Proclamation, and thereby to the Cairo Declaration. However,
2
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eBeitirr
neither the US, nor any other power, has formally recognized the annexation by China
of Taiwan, the legal status of which, until the conclusion of a Japanese peace treaty,
is that of an occupied territory in which the US, as well as the other participants in the
war against Japan, still have proprietary interests.
3. PROBABLE DEVELOPMENTS IN TAIWAN.
There is strong sentiment in Taiwan favoring autonomy, but the situation is com-
plicated by the conflicting interests of the native Taiwanese and Chinese Nationalist
elements. The Taiwanese bitterly resent the performance of the Nationalist adminis-
tration on Taiwan since VJ-day. The Chinese rulers have exploited the native popu-
lation to the limit, without regard for their welfare or the preservation of the island's
resources. The explosive nature of the Taiwanese problem was dramatically demon-
strated in the abortive insurrection of 1947.
a. Taiwanese Aspirations and Capabilities.
The native population of Taiwan would welcome release from their domination
by mainland Chinese. The Taiwanese probably do not have strong aspirations for im-
mediate independence, but could be expected to favor a trusteeship status under the
UN or some form of US protectorate.
A successful Taiwanese rebellion against the Chinese Government in the near
future is quite improbable, owing to lack of effective organization and leadership and
the presence of Nationalist military forces on the island. It is quite probable, how-
ever, that the Taiwanese may resort to acts of violence and sabotage at any time in
protest against the current influx of mainland Chinese. These outbreaks may be
prompted, not so much by hope of success as by a desire to draw the attention of world
opinion to the Taiwanese problem. Furthermore, even if a non-Communist Taiwanese
regime were established, its ability over a long period of time to withstand pressure from
the Communist-dominated mainland would be slight, in view of the lack of govern-
mental experience of potential Taiwanese leaders and the economic problems which
would confront their regime.
b. Nationalist Remnants in Taiwan.
With the disintegration of the National Government on the mainland, Chinese
Nationalist leader's have made significant progress in the development of Taiwan as a
base for continued resistance and as a final refuge. The families and properties of a
number of highly placed Nationalists as well as some important officials have already
moved to Taiwan. In addition, the government has transferred to the island the major
part of its gold bullion resources. The government may have as many as six divisions
now in training on the island, a number which may be increased by withdrawal of addi-
tional troops from the mainland. The equipment and ammunition supplies of these
troops have been augmented by recent shipments of war materials from the US at the
Taiwanese port of Keelung. Moreover, Taiwan is being prepared as the principal base
for the Chinese Navy and Air Force.
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SECRET
Some Nationalist elements apparently contemplate continuing resistance
to the Communists from the southeast provinces of the mainland, perhaps coordinated
with other resistance offered by non-Communist elements in the southwest and western
provinces. In this plan, Taiwan will serve as a principal military and economic base,
and, as a last resort, the seat of a rump National Government driven off the mainland.
The importance attached to Taiwan is indicated by the recent appointment of former
Chief of Staff Chen Cheng as governor. There are many indications that Chiang Kai-
shek, who still retains the title of President, may himself move to Taiwan. Nationalist
leaders have publicly proclaimed their intention of making the island an anti-Com-
munist bastion for the rejuvenation of the Chinese nation, and have privately suggested
to US officials that ECA aid be diverted there, and that trade relations between Japan
and Taiwan be resumed.
A Nationalist rump government on Taiwan cannot be relied upon to prevent
the Communists from gaining control of the island. The Nationalist Army, Navy, and
Air Force are not only inefficient, but their loyalty and will to fight are questionable.
In addition, such a refugee regime would be unstable because of the hostility of the
local population which, in these circumstances, would be increasingly susceptible to
Communist influence.
c. Communist Capabilities with Respect to Taiwan.
Although Communist strength on Taiwan has not yet attained significant pro-
portions, it is apparent that the Communists plan to extend their control to the island;
they have, in fact, named Taiwan among the sixteen major centers of resistance which
they intend to occupy. In the next few months the Communists may acquire main-
land ports and shipping which will provide the opportunity for a military assault on
Taiwan, but this could probably be repulsed by the Nationalists so long as the navy and
air force remained loyal. The Communists, therefore, will probably try to extend their
influence among the Taiwanese by infiltration and by political means, instead of at-
tempting to take the island by direct assault. Through infiltration, the Communists
could provide effective leadership and arms for the Taiwanese insurgents; and through
political means, such as offering amnesty or even rewards to Nationalist leaders assist-
ing a Communist triumph, the Nationalist will to resist could be reduced. Thus, the
Chinese Nationalist administration, unless supported by US military force, would
eventually be deposed by a Communist-led native movement.
There is also some prospect that the Communists might acquire control over
Taiwan by political means alone, through a Nationalist-Communist agreement as a
part of peace negotiations on a national or local scale. It is unlikely that the Com-
munists would agree to any settlement on a national scale unless the Communists, by
its terms, were assured control over the government military forces and resources in
Taiwan.
Assuming US inactivity, Taiwan will eventually but probably not immediately
pass under the control of the Chinese Communists.
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4. CONSEQUENCES OF US MEASURES TO DENY TAIWAN TO COMMUNIST DOMINATION.
Any US measures to implement a program of denying Taiwan to eventual Com-
munist domination would have some unfavorable political consequences.
a. It is unlikely that the US, in any course of action, can avoid incurring the
hostility of either the Chinese Nationalists or the Taiwanese, each of whom would resent
and resist any US effort to support the other. US acquiescence in Nationalist control
of Taiwan is resented by the Taiwanese. Positive support to the Nationalists would
probably drive the Taiwanese toward the Communists. On the other hand, US support
to Taiwanese aspirations would require taking over authority from the established
Nationalist regime.
b. US measures to affect the course of events in Taiwan would provide the USSR
and the Chinese Communists with additional material for their anti-US propaganda.
c. Anti-US sentiment probably would increase in China, where the return of
Taiwan to the Republic of China is accepted as a fact, although the extent would vary
depending on the nature of the measures adopted by the US. This issue could win
increased popular support for a Communist regime in China.
d. It would probably preclude the US maintaining normal diplomatic and con-
sular relationships with a Communist government in China, if such relations were de-
sired. This would certainly be the case if the US supported or was accused of support-
ing a rump National government on Taiwan.
e. Depending on the nature of the US program, the Taiwanese problem might
be raised in the UN to the embarrassment of the US.
On the other hand, some courses of US action might produce results beneficial
to US interests. The will to resist Communism in Japan, in Korea, in the Philippines
and elsewhere throughout the Far East, including the southeast coastal areas of China,
might be strengthened. A definite US program toward Taiwan would be viewed as an
indication of US determination to check the advance of Communism in the Far East
wherever practicable to do so. Favorable reaction might develop if the US program
were developed in such a way as to secure local stability and contentment in Taiwan and
to satisfy Taiwanese sentiment in favor of autonomy. The program would have to be
supplemented by an informational campaign designed to demonstrate that the US was
favorable to Far Eastern nationalist aspirations. If not, the political consequences
throughout the Far East could be distinctly unfavorable to the US.
5. CONCLUSION.
The situation in Taiwan is steadily growing more critical for the US because of
Taiwanese discontent, Chinese Nationalist preparation of the island as a last bastion,
and increasing Chinese Communist interest in and capabilities toward the island. As-
suming US inactivity, Taiwan will eventually pass to the control of the Chinese Commu-
nists. The strategic implications to US security of such a development would be seri-
ously unfavorable. In any US program to prevent Communist control of Taiwan, the
advantages to be gained thereby from the strategic military viewpoint would have to be
weighed against unfavorable political consequences, the extent of which would vary
depending upon the selection and timing of measures for implementing the program.
5 MONET
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