Statement by the President: United States Policy Toward China.

LAST DECEMBER I made a statement of this Government's views regarding China.¹ We believed then and do now that a united and democratic China is of the utmost importance to world peace, that a broadening of the base of the National Government to make it representative of the Chinese people will further China's progress toward this goal, and that China has a clear responsibility to the other United Nations to eliminate armed conflict within its territory as constituting a threat to world stability and peace. It was made clear at Moscow last year that these views are shared by our Allies, Great Britain and the Soviet Union. On December 27th, Mr. Byrnes, Mr. Molotov and Mr. Beyin issued a statement which said, in part:

"The three Foreign Secretaries exchanged views with regard to the situation in China. They were in agreement as to the need for a unified and democratic China under the National Government for broad participation by democratic elements in all branches of the National Government, and for a cessation of civil strife. They affirmed their adherence to the policy of non-interference in the internal affairs of China."

1 See 1945 volume, this series, p. 543.

The policies of this Government were also made clear in my statement of last December. We recognized the National Government of the Republic of China as the legal government. We undertook to assist the Chinese Government in reoccupation of liberated areas and in disarming and repatriating the Japanese invaders. And finally, as China moved toward peace and unity along the lines mentioned, we were prepared to assist the Chinese economically and in other ways.

I asked General Marshall to go to China as my representative. We had agreed upon my statement of the United States Government's views and policies regarding China as his directive. He knew full well in undertaking the mission that halting civil strife, broadening the base of the Chinese Government and bringing about a united, democratic China were tasks for the Chinese themselves. He went as a great American to make his outstanding abilities available to the Chinese.

During the war, the United States entered into an agreement with the Chinese Government regarding the training and equipment of a special force of 39 divisions. That training ended V-J Day and the transfer of the equipment had been largely completed when General Marshall arrived.

The United States, the United Kingdom and the Union of Soviet Socialist Republics all committed themselves to the liberation of China, including the return of Manchuria to Chinese control. Our Government had agreed to assist the Chinese Government in the reoccupation of areas liberated from the Japanese, including Manchuria, because of China's lack of shipping and transport planes. Three armies were moved by air and eleven by sea, to central China, Formosa, north China and Manchuria. Most of these moves had been made or started when General Marshall arrived.

The disarming and evacuation of Japanese progressed slowly--too slowly. We regarded our commitment to assist the Chinese in this program as of overwhelming importance to the future peace of China and the whole Far East. Surrendered but undefeated Japanese armies and hordes of administrators, technicians, and Japanese merchants, totalling about 3,000,000 persons, had to be removed under the most difficult conditions. At the request of the Chinese Government we had retained a considerable number of American troops in China, and immediately after V-J Day we landed a corps of Marines in north China. The principal task of these forces was to assist in the evacuation of Japanese. Only some 200,000 had been returned to Japan by the time General Marshall arrived.

General Marshall also faced a most unpropitious internal situation on his arrival in China. Communications throughout the country were badly disrupted due to destruction during the war and the civil conflicts which had broken out since. This disruption was preventing the restoration of Chinese economy, the distribution of relief supplies, and was rendering the evacuation of Japanese a slow and difficult process. The wartime destruction of factories and plants, the war-induced inflation in China, the Japanese action in shutting down the economy of occupied China immediately after V-J Day, and finally the destruction of communications combined to paralyze the economic life of the country, spreading untold hardship to millions, robbing the victory over the Japanese of significance to most Chinese and seriously aggravating all the tensions and discontents that existed in China.

Progress toward solution of China's internal difficulties by the Chinese themselves was essential to the rapid and effective completion of most of the programs in which we had already pledged our assistance to the Chinese Government. General Marshall's experience and wisdom were available to the Chinese in their efforts to reach such solutions.

Events moved rapidly upon General Marshall's arrival. With all parties availing themselves of his impartial advice, agreement for a country-wide truce was reached and announced on January 10th. A feature of this agreement was the establishment of a unique organization, the Executive Headquarters in Peiping. It was realized that due to poor communications and the bitter feelings on local fronts, generalized orders to cease fire and withdraw might have little chance of being carried out unless some authoritative executive agency, trusted by both sides, could function in any local situation.

The Headquarters operated under the leaders of three commissioners-one American who served as chairman, one Chinese Government representative, and one representative of the Chinese Communist Party. Mr. Walter S. Robertson, Charge d'Affaires of the American Embassy in China, served as chairman until his return to this country in the fall. In order to carry out its function in the field, Executive Headquarters formed a large number of truce teams, each headed by one American officer, one Chinese Government officer, and one Chinese Communist officer. They proceeded to all danger spots where fighting was going on or seemed impending and saw to the implementation of the truce terms, often under conditions imposing exceptional hardships and requiring courageous action. The degree of cooperation attained between Government and Communist officers in the Headquarters and on the truce teams was a welcome proof that despite two decades of fighting, these two Chinese groups could work together.

Events moved forward with equal promise on the political front. On January 10th, the Political Consultative Conference began its sessions with representatives of the Kuomintang or Government Party, the Communist Party and several minor political parties participating. Within three weeks of direct discussion these groups had come to a series of statesman-like agreements on outstanding political and military problems. The agreements provided for an interim government of a coalition type with representation of all parties, for revision of the Draft Constitution along democratic lines prior to its discussion and adoption by a National Assembly and for reduction of the Government and Communist armies and their eventual amalgamation into a small modernized truly national army responsible to a civilian government.

In March, General Marshall returned to this country. He reported on the important step the Chinese had made toward peace and unity in arriving at these agreements. He also pointed out that these agreements could not be satisfactorily implemented and given substance unless China's economic disintegration were checked and particularly unless the transportation system could be put in working order. Political unity could not be built on economic chaos. This Government had already authorized certain minor credits to the Chinese Government in an effort to meet emergency rehabilitation needs as it was doing for other war devastated countries throughout the world. A total of approximately $66,000,000 was involved in six specific projects, chiefly for the purchase of raw cotton, and for ships and railroad repair material. But these emergency measures were inadequate. Following the important forward step made by the Chinese in the agreements as reported by General Marshall, the Export-Import Bank earmarked a total of $500,000,000 for possible additional credits on a project by project basis to Chinese Government agencies and private enterprises. Agreement to extend actual credits for such projects would obviously have to be based upon each Government's policy as announced December 15, 1945. So far, this $500,000,000 remains earmarked, but unexpended.

While comprehensive large scale aid has been delayed, this Government has completed its wartime lend-lease commitments to China. Lend-lease assistance was extended to China to assist her in fighting the Japanese, and later to fulfill our promise to assist in re-occupying the country from the Japanese. Assistance took the form of goods and equipment and of services. Almost half the total made available to China consisted of services, such as those involved in air and water transportation of troops. According to the latest figures reported, lend-lease assistance to China up to V-J Day totaled approximately $870,000,000. From V-J Day to the end of February, shortly after General Marshall's arrival, the total was approximately $600,000,000--mostly in transportation costs. Thereafter, the program was reduced to the fulfillment of outstanding commitments, much of which was later suspended.

A considerable quantity of civilian goods has also been made available by our agreement with China for the disposal of surplus property which enabled us to liquidate a sizable indebtedness and to dispose of large quantities of surplus material. During the war the Chinese Government furnished Chinese currency to the United States Army for use in building its installations, feeding the troops, and other expenses. By the end of the war this indebtedness amounted to something like 150,000,000,000 Chinese dollars. Progressive currency inflation in China rendered it impossible to determine the exact value of the sum in United States

currency.

China agreed to buy all surplus property owned by the United States in China and on seventeen Pacific Islands and bases with certain exceptions. Six months of negotiations preceded the agreement finally signed in August. It was imperative that this matter be concluded in the Pacific as had already been done in Europe, especially in view of the rapid deterioration of the material in open storage under tropical conditions and the urgent need for the partial alleviation of the acute economic distress of the Chinese people which it was hoped this transaction would permit. Aircraft, all nondemilitarized combat material, and fixed installations outside of China were excluded. Thus, no weapons which could be used in fighting a civil war were made available through this agreement.

The Chinese Government cancelled all but 30,000,000 United States dollars of our indebtedness for the Chinese currency, and promised to make available the equivalent of 35,000,000 United States dollars for use in paying United States governmental expenses in China and acquiring and improving buildings and properties for our diplomatic and consular establishments. An additional sum of 20,000,000 United States dollars is also designated for the fulfillment of a cultural and educational program.

Before General Marshall arrived in China for the second time, in April, there was evidence that the truce agreement was being disregarded. The sincere and unflagging efforts of Executive Headquarters and its truce teams have succeeded in many instances in preventing or ending local engagements and thus saved thousands of lives. But fresh outbreaks of civil strife continued to occur, reaching a crisis of violence in Manchuria with the capture of Changchun by the Communists and where the presence of truce teams had not been fully agreed to by the National Government.

A change in the course of events in the political field was equally disappointing. Negotiations between the Government and the Communists have been resumed again and again, but they have as often broken down. Although hope for final success has never disappeared completely, the agreements made in January and February have not been implemented, and the various Chinese groups have not since that time been able to achieve the degree of agreement reached at the Political Consultative Conference.

There has been encouraging progress in other fields, particularly the elimination of Japanese from China. The Chinese Government was responsible under an Allied agreement for the disarmament of all Japanese military personnel and for the repatriation of all Japanese civilians and military personnel from China, Formosa and French Indo-China north of the sixteenth degree of latitude. Our Government agreed to assist the Chinese in this task. The scope of the job was tremendous. There were about 3,000,000 Japanese, nearly one-half of them Army or Navy personnel to be evacuated. Water and rail transportation had been destroyed or was immobilized. Port facilities were badly damaged and overcrowded with relief and other supplies. The Japanese had to be disarmed, concentrated and then transported to the nearest available port. In some instances this involved long distances. At the ports they had to be individually searched and put through a health inspection. All had to be inoculated. Segregation camps had to be established at the ports to cope with the incidence of epidemic diseases such as Asiatic cholera. Finally, 3,000,000 persons had to be moved by ship to Japan.

American forces helped in the disarmament of Japanese units. Executive Headquarters and its truce teams were able to make the complicated arrangements necessary to transfer Japanese across lines and through areas involved in civil conflict on their way to ports of embarkation. American units also participated in the inspections at the port, while American medical units supervised all inoculation and other medical work. Finally, American and Japanese ships under the control of General MacArthur in Japan, and a number of United States Navy ships under the Seventh Fleet transported this enormous number of persons to reception ports in Japan.

At the end of last year, approximately 200,000 Japanese had been repatriated. They were leaving Chinese ports at a rate of about 2,500 a day. By March of this year, rapidly increased efforts on the part of the American forces and the Chinese authorities involved had increased this rate to more than 20,000 a day. By November, 2,986,438 Japanese had been evacuated and the program was considered completed. Except for indeterminate numbers in certain parts of Manchuria, only war criminals and technicians retained on an emergency basis by the Chinese Government remain. That this tremendous undertaking has been accomplished despite conflict, disrupted communications and other difficulties will remain an outstanding example of successful American-Chinese cooperation toward a common goal.

Much has been said of the presence of United States armed forces in China during the past year. Last fall these forces were relatively large. They had to be. No one could prophesy in advance how well the Japanese forces in China would observe the surrender terms. We had to provide forces adequate to assist the Chinese in the event of trouble. When it became obvious that the armed Japanese would not be a problem beyond the capabilities of the Chinese Armies to handle, redeployment was begun at once.

The chief responsibility of our forces was that of assisting in evacuation of Japanese. This task was prolonged by local circumstances. Provision of American personnel for the Executive Headquarters and its truce teams has required a fairly large number of men, particularly since the all important network of radio and other communications was provided entirely by the United States. The Executive Headquarters is located at Peiping, a hundred miles from the sea and in an area where there was the possibility of local fighting. Hence, another responsibility was to protect the line of supply to and from Headquarters. Another duty our forces undertook immediately upon the Japanese surrender was to provide the necessary protection so that coal from the great mines northeast of Tientsin could reach the sea for shipment to supply the cities and railroads of central China. This coal was essential to prevent the collapse of this industrial area. Our Marines were withdrawn from this duty last September. Other units of our forces were engaged in searching for the bodies or graves of American soldiers who had died fighting the Japanese in China. Still others were required to guard United States installations and stores of equipment, and to process these for return to this country or sale as surplus property.

At peak strength a year ago we had some 13,000 soldiers, sailors and marines in China. Today this number is being reduced to less than 12,000, including some 2,000 directly concerned with the operations of Executive Headquarters and will be further reduced to the number required to supply and secure the American personnel of Executive Headquarters and the air field and stores at Tsingtao.

Thus during the past year we have successfully assisted in the repatriation of the Japanese, and have subsequently been able to bring most of our own troops home. We have afforded appropriate assistance in the reoccupation of the country from the Japanese. We have undertaken some emergency measures of economic assistance to prevent the collapse of China's economy and have liquidated our own wartime financial account with China.

It is a matter of deep regret that China has not yet been able to achieve unity by peaceful methods. Because he knows how serious the problem is, and how important it is to reach a solution, General Marshall has remained at his post even though active negotiations have been broken off by the Communist Party. We are ready to help China as she moves toward peace and genuine democratic government.

The views expressed a year ago by this Government are valid today. The plan for political unification agreed to last February is sound. The plan for military unification of last February has been made difficult of implementation by the progress of the fighting since last April, but the general principles involved are fundamentally sound.

China is a sovereign nation. We recognize that fact and we recognize the National Government of China. We continue to hope that the Government will find a peaceful solution. We are pledged not to interfere in the internal affairs of China. Our position is clear. While avoiding involvement in their civil strife, we will persevere with our policy of helping the Chinese people to bring about peace and economic recovery in their country.

As ways and means are presented for constructive aid to China, we will give them careful and sympathetic consideration. An example of such aid is the recent agricultural mission to China under Dean Hutchison of the University of California sent at the request of the Chinese Government. A joint Chinese-American Agricultural Collaboration Commission was formed which included the Hutchison mission. It spent over four months studying rural problems. Its recommendations are now available to the Chinese Government, and so also is any feasible aid we can give in implementing those recommendations. When conditions in China improve, we are prepared to consider aid in carrying out other projects, unrelated to civil strife, which would encourage economic reconstruction and reform in China and which, in so doing, would promote a general revival of commercial relations between American and Chinese businessmen.

We believe that our hopes for China are identical with what the Chinese people themselves most earnestly desire. We shall therefore continue our positive and realistic policy toward China which is based on full respect for her national sovereignty and on our traditional friendship for the Chinese people and is designed to promote international peace.