Foreign Relations of the United States, 1961–1963, Volume XXII, Northeast Asia

31. National Intelligence Estimate⁰

NIE 43-61

Washington, June 20, 1961.

PROSPECTS FOR THE GOVERNMENT OF THE REPUBLIC OF CHINA¹

The Problem

To estimate the prospects for the Government of the Republic of China (GRC) over the next two or three years, with particular reference to its international position.

Conclusions

1. The GRC is likely to be faced this year with abandonment or failure of the UN moratorium on discussion of the question of Chinese representation. It does not necessarily follow, however, that Peiping would replace the GRC or achieve any representation in the UN this year. Many countries are moving towards a preference for a two-Chinas formula. Both Taipei and Peiping have rejected such a formula and each has stated that it will not accept dual representation. If any Chinese Communist membership in the UN appeared imminent to the GRC, the latter would threaten to withdraw. If Communist China achieved membership in both the General Assembly and the Security Council, we believe the GRC would withdraw from the UN. In less drastic cases however, the GRC might not carry out the threat to withdraw, if only to attempt to prevent Peiping’s actually filling a proffered seat. (Paras. 12-15, 27)

2. The GRC’s principal objective will continue to be to regain control of the mainland. The GRC leaders believe that now is a good time to agitate the question of taking probing actions against the mainland in order to capitalize on the economic distress and other sources of discontent there. Although we doubt that they would commit forces to such a mission in the face of specific US objections, the possibility cannot be ruled out that they might, without consulting us, undertake airdrops or raids at any time. (Para. 25)

3. Most GRC leaders now believe that their best chance of regaining the mainland would come in the wake of a war between the US and Communist China. We believe, however, that there is only a remote chance of their trying to provoke such a war. (Para. 23)

4. Politically conscious Taiwanese are generally opposed to GRC rule of Taiwan, but inadequate leadership and organization minimize their threat to the regime. GRC security forces are almost certainly more than adequate to cope with any domestic troubles. Mainlander-Taiwanese relations will almost certainly come under increasing strain. (Paras. 30-33)

5. With the help of large-scale US aid, the GRC has made substantial economic progress, and economic development has acquired momentum. Some negative factors such as growing unemployment, an extremely rapid population growth, and a recent decline in productive investment threaten this trend. Whether sufficient economic growth can be maintained over the long run depends largely on the course of US policy and aid and on the ability and willingness of the leadership to adapt to the requirements of prolonged existence on Taiwan. (Paras. 34-38)

6. Over the next few years the GRC will probably suffer setbacks, particularly those growing out of the enhanced international position of Peiping. The ability of the GRC to ride out these next few years will depend largely upon the manner and pace at which the setbacks come and in considerable degree upon the role of the US. We believe that, as long as US economic support and military protection are assured, the GRC can survive these setbacks and can adjust, however reluctantly, to a gradual series of changes. (Para. 28)

7. If the GRC leaders were faced with a major change in US policy such as a US decision to use the extreme pressures that would be necessary to force the evacuation of the offshore islands, advocacy of the acceptance of a two-Chinas formula, or formal recognition of Communist China, the bitterness and psychological shock would be profound, whatever guarantees or explanations the US might give. Some mainlanders on Taiwan would seek accommodation with the Communists, or advocate precipitating a war with Communist China, or seek refuge elsewhere in the Free World; however, we believe that most would resign themselves to making the best of a future on Taiwan. The surviving government would probably be less disciplined and more corrupt and less stable than the present one; Communist subversion would probably become a problem. However, given continued US aid and protection, Taiwan would probably continue as a part of the Free World. (Paras. 39-46)

[Here follow paragraphs 8-48, comprising the Discussion portion of the estimate, in five sections entitled “Introduction,” “International Problems,” “GRC Reactions to Its Changing International Status,” “Domestic Problems,” and “Contingencies,” and Appendix A, “Military,” Appendix B, “Political Tables,” and a map of East China and Taiwan showing army strengths.]

0. Source: Department of State, INR/EAP Files: Lot 90 D 110, NIE 43-61. Secret. According to a note on the covering sheet, the Central Intelligence Agency and the intelligence agencies of the Departments of State, the Army, the Navy, the Air Force, and the Joint Staff participated in the preparation of this estimate. All members of the USIB concurred in this estimate except the representatives of the AEC and the FBI, who abstained on the grounds that the subject was outside their jurisdiction.
1. Intelligence Board document USIB-D-15.2/73, June 21, titled “Post-Mortem on NIE 43-61,” states that on June 20 the Board noted findings set forth therein and requested members of the Board to take such action as they deemed appropriate. The findings state that production of the economic section of NIE 43-61 had caused great difficulty; interpretations of Taiwanese economic developments varied “substantially” both in the field and in Washington. The major remaining gaps concerned such questions as GRC intentions with respect to unilateral use of GRC forces to exploit discontent on the mainland, the possibility of an attack on the mainland intended to embroil the United States in war, the genuineness of GRC threats to “go it alone” rather than give up the back-to-the-mainland policy, and the succession question. (Ibid.)