893.00/8–1347
Memorandum by the First Secretary of Embassy in China (Ludden) to General Wedemeyer 94
Politically south China is in much the same position as other major regions of Central Government controlled China. For all practical purposes the government and the Kuomintang party machinery remain in substantial control of the situation but there is widespread and growing discontent with government activities and policies which has brought about repressive measures by the government, particularly against student movements and the press. In Canton repressive measures have been as stringent, if not more so, than in other areas of China. This is explained in some degree by the fact that south China has been largely denuded of troops to satisfy the needs of the northern fronts.
In south China there is the added factor of the position of Hong Kong. Hong Kong, as a British Crown Colony, has become the last refuge for politicially dissident elements, taking the place of the foreign concessions and international settlements of the extraterriorial era in China. Hong Kong, in addition to being a political refuge, is also a refuge for Chinese capital which has an important effect upon [Page 716] the economy of south China, particularly with regard to the remittances of overseas Chines, but these points will be covered by Mr. Adler95 and Mr. Anderberg.96
At the present time Hong Kong offers the only point in south China where there is any freedom of publication. It is, therefore, only natural that there are a variety of publications extending politically from pro-Government to Communist but it is the non-government papers which are the most important to consider. The Democratic League and the Communists, being unable to publish in China proper have established printing establishments in Hong Kong from whence their publications find their way into China. These papers are distributed not only in south China, but also find their way northward along the coast through a variety of means, but a good deal of the distribution is carried out through normal postal channels. The Embassy has good reason to believe, however, that in the cast [case] of Communist publications, the Chinese Seamen’s Union offers an excellent channel for coastwise distribution of Communist literature from Hong Kong. Of course this distribution is not confined to the Chinese Seamen’s Union, but is carried on by sailors on foreign vessels as well. For example, a few months ago an American representative of the CIO who was in China investigating the use of CIO funds allocated to the Chinese Federation of Labor, made the point that seamen and miners always tend to be the most radical of all workers and he found that there was considerable traffic in anti-government literature along the coast between Hong Kong and Shanghai in the hands of American seamen.
Along the coast of south China there is a widespread smuggling trade being carried on and this offers an additional channel for the movement of non-government newspapers and tracts into China proper. In addition to the open publishing effort at Hong Kong by elements in opposition to the government, there are also numerous political “outs” who have sought refuge in Hong Kong and can be assumed to be ready actively to intrigue against the government whenever opportunity offers. Perhaps the most outstanding of these is Li Chi-shen, who but a few days ago was expelled from the Kuomintang for the third time in his career for his outspoken anti-government position. The presence of these political dissidents in Hong Kong gives rise from time to time to a variety of reports with regard to separatist movements in southeast China. Because of the presence in Hong Kong of anti-government elements it has been reported on a number of occasions that the British are actively supporting separatist [Page 717] movements in southeast China on the theory that an autonomous regime in the southeast would be less likely to press for the rendition of Hong Kong than the National Government. There has been no substantive proof put forth that the British are engaged in any such activity and it is unlikely that any such proof ever will be obtained. However, one must not lose sight of the fact that a strong and united China is not in immediate British interests vis-à-vis Hong Kong. It may be assumed that a strong and unified China would immediately demand and obtain the rendition of the Crown Colony. It may be expected that with regard to the rendition of Hong Kong the British will employ delaying tactics for as long a period as possible and it would therefore be in their immediate interests to have a local regime in effective control of south China friendly to them. It is inconceivable that the British are unaware of the trend of events in north China and Manchuria and therefore they may well be mending their fences in south China with a view to the protection of substantial British investments in the area and the development of overseas trade which they so badly need at the present time.
The British at Hong Kong, in accordance with their laws, maintain that they are allowing freedom of publication and freedom of residence so long as activities are not carried out which are inimical to the relations between Great Britain and China. The position of the British in Hong Kong in attempting to carry out well-known British democratic principles is a very difficult one in the face of constant Chinese protests with regard to the activities of anti-government Chinese in the area.
The question of separatist movements in southeast China is a very nebulous one. Several weeks ago the Embassy was informed categorically by no less a person than Cheng Kai-min, Chief of the Military Intelligence Department of the Ministry of National Defense, that Li Chi-shen had declared the independence of Kwangtung and Kwangsi, had established a headquarters in Kwangsi and that a special committee had been set up in Hong Kong on which there were Communist members. Upon investigation this story proved to be completely false.
There can be little question, however, that as the power and prestige of the Central Government declines there will occur separatist movements in the peripheral areas of China and it is very likely that one of these areas will be south China and probably embrace the provinces of Kwangtung and Kwangsi. When or how such a development will occur is difficult to estimate. In this connection there has been much speculation with regard to the position of General Chang Fa-kwei, the Generalissimo’s personal representative at Canton. It is the [Page 718] general consensus that Chang Fa-kwei is faithful to the Generalissimo and will remain so. However, it is possible, even probable, that if the power of the Central Government declines to such a point where control of south China is impossible or if the Generalissimo falls, Chang Fa-kwei could be expected to attempt to take over the area and to establish an independent regime in the interests of the area. In Kwangtung province at the present time there is a certain amount of alleged Communist activity but most observers tend to believe that it is largely local banditry stemming from economic dislocations. During the period of the Marshall mediatory mission the greater part of the Communist East River Column was evacuated from south China to Shantung. There are still remnants of this column in the East River area offering a rallying point for other dissident elements but it is still on a very small scale and confined largely to local and largely unimportant raiding. There is also a small amount of Communist and/or bandit activity in the Liuchow peninsula area and on Hainan Island. General Chang Fa-kwei maintains that banditry could be eliminated easily had he sufficient troops to police the area.
Reports from Kwangsi are conflicting but recent travelers from that area report the countryside generally quiet with little or no bandit activity. It must be borne in mind, however, that economic dislocations and recent floods will create conditions making for the development of local banditry which may be made use of by Communist organizers to spread their influence. This situation is probably more true in south Hunan than it is in Kwangtung and Kwangsi because of the near famine conditions which have prevailed there for some time.