893.00/3–1146: Telegram
The Counselor of Embassy in China (Smyth) to the Secretary of State
[Received 8:05 p.m.]
464. Political scene dominated by present situation in Manchuria. Uncertainty as to ultimate Russian intentions in northeast and increasing suspicion with regard to Chinese Communist connection therewith tend to retard and jeopardize recent progress toward settlement of internal political and military problems.
Even after discounting sensational aspects of American correspondents’ early stories from Manchuria, there can now be little doubt but that large scale Russian stripping of the Manchurian industrial plant, at least in the Mukden and Anshan areas, has occurred. Reasonable explanation would seem to be that Soviet Union does not intend annexation or creation of satellite state, but has removed heavy industry war potential and will demand domination of future industrial development in Manchuria for security reasons.
On the other hand Russians appear to be adopting attitude of obstruction toward Central Govt. in Manchuria although Chinese Communists seem to enjoy at least Russian tolerance which has effect of tacit support. Chinese Communists have failed to explain satisfactorily their phenomenal Manchurian expansion since V–J Day and avoid question of source of arms for 300,000 men referred to in Manchurian [Page 539] policy statement of Feb. 14 mentioned in Embtel 357, Feb. 23 and despatch 1166, Feb. 28. (No unbiased estimates of Communist strength in Manchuria are available.) Furthermore in recent weeks Chinese Communist press and radio have shown more marked tendency toward closer adherence to Soviet Party line concerning Asiatic-Pacific questions than was evident previously. General effect in China proper has been to alienate good will developed by Communists in liberal quarters during recent successful negotiations and to strengthen position of disgruntled rightist elements of Kuomintang who wish to obstruct implementation of PCC resolutions and military agreement.
Heated discussion of Manchurian issues at current plenary session of Kmt Central Executive Committee has frequently interrupted meetings devoted by regular agenda to other topics. It has been reported to the Embassy by a well-informed Chinese source that there has been sharp criticism of the caliber and integrity of Central Govt. officials sent to Manchuria and of failure on the part of the govt. to take sufficiently into account strong regional consciousness in Manchuria. The same source indicated that newly appointed northeastern officials are largely adherents of the so-called CC92 clique interspersed with agents of Gen. Tai Li and neither hearty welcome by Manchurian Chinese nor Communist cooperation could be expected.
A movement for Kuomintang reformation from within the party which was launched by extreme rightist members, largely of the CC clique, on Feb. 10 has been widely interpreted as a potential attack on the authority of the Generalissimo and an attempt to obtain a reversal of his position regarding the PCC resolutions and military reorganization. Thus far there are no indications of any serious challenge to the Generalissimo’s authority or of any change in his apparently firm stand for full implementation of the PCC resolutions and military reorganization agreement.
At the CEC session the main point at issue now seems to be the question of constitutional revision. The session is reported to be adamant in demanding presentation of the May 5 draft constitution to the National Assembly without revision. With this possible exception it may be anticipated that the CEC will approve the resolutions of the PCC. Any exception, however, will be unfortunate inasmuch as it will offer the central committee of the Communist Party, scheduled to meet at Yenan in late March, an excuse to bring forward exceptions of its own.
Meanwhile the signing of the military reorganization agreement93 has received nation wide press acclaim as a major forward step toward [Page 540] lasting peace and national unity and stability. The more responsible newspapers, however, point out the need for continued good will and cooperation from all groups and factions if the paper plan is to be made effective. But in the non-Communist press there is growing an implied scepticism with regard to the entire reform program as the Manchurian problem becomes more acute and forces in opposition to any change embrace the national security issue raised thereby as a means to foster their own desires for preservation of power. In this connection, CC clique has elected a majority of the presidium of Central Executive Committee.