FE files, lot 55 D 480, “Communist China”

No. 353
Memorandum by the Special Assistant for Intelligence (Armstrong) to the Secretary of State1

secret

Subject:

  • Intelligence Note: The New Sino-Soviet Agreements

The most striking feature of the Sino-Soviet communiqué of October 11 [12,] 19542 is its apparent intent to portray Communist China as an equal partner of the USSR and to emphasize the agreement of the two powers on Communist policy in the Far East, particularly with respect to Japan. It is also notable for its attempt to exaggerate what is in effect a niggardly Soviet program of economic aid to the Chinese Communist regime.

Comparison of the present agreement with the Sino-Soviet Treaty of 1950 reflects the elevation of Communist China’s status in the Communist orbit. This agreement was negotiated in Peiping rather than Moscow and it provides for the liquidation of the last formal Soviet rights in China (the Soviet military base in Port Arthur and the Sino-Soviet Joint Companies). The 1950 agreement provided for Soviet technical assistance to Communist China; the present agreement provides for a mutual interchange of technical data and specialists, thus crediting Communist China with far more technical competence than it possesses. Finally, the emphasis given to “unity of views,” “cooperative support of peace,” and “consultation” on questions of common interest, particularly in matters of foreign relations is far greater than in the documents of 1950, and suggests that lack of sufficient consultation was a problem in past Sino-Soviet relations.

The $130 million credit granted by the USSR to China is probably a five-year loan. Thus the annual proceeds ($26 million) will not even be enough to amortize the 1950 credit of $300 million, payment on which is to begin in 1955 ($30 million annually plus interest). Soviet equipment for the construction of plants in China is treated as additional assistance, but in fact will probably be paid for by Chinese Communist exports. However, the agreement provides for the construction of two new rail lines that will shorten the rail distance from the USSR to Communist China and relieve the present Manchurian rail bottleneck.

[Page 777]

The communiqué only mildly endorses the present Chinese Communist campaign regarding Taiwan and calls for a new international conference on Korea. The separate section on Japan is noteworthy because it reinforces recent Soviet statements implying a willingness to deal with even a conservative Japanese Government. Although the declaration characteristically specifies that Japan must take the initiative, it is less specific than previous statements as to the degree of independence Japan must achieve from the US in order to restore diplomatic relations with the Communist bloc. The promised withdrawal of Soviet military forces from Port Arthur by May 1955 may also be viewed as a possible overture to Japan, since the Communists have previously stated that Soviet troops would remain in Port Arthur until a peace treaty was concluded with Japan.

A similar memorandum has been sent to the Under Secretary.

  1. The source text is the copy of this memorandum which was sent to the Bureau of Far Eastern Affairs.
  2. See footnote 9, Document 337.