Office of the Historian

337. Memorandum of Conversation0

Washington, June 21, 1961.

SUBJECT

  • Sino-Japanese Relations

PARTICIPANTS

The President acknowledged the importance of Japan’s relationship with the United States, for which reason we watch closely internal developments there. At present the pull toward neutralism, the attraction of Communist China, the desire for non-involvement in the East-West struggle, and the influence of communism and socialism pose a challenge to the Government of Japan. The President assured the Prime Minister that the United States intended to adopt policies which would not embarrass his regime or expose it to political danger. He is aware that American policy decisions do affect free world governments, for example, a decision to resume nuclear tests would have a most serious effect not only in Japan but also in Britain. Therefore, the effect of every American act on the nations of the Free World must be considered most closely. [Page 697] The President pointed out that Communist China poses the most difficult problem faced by his Administration in terms of its internal consequences.

The President recalled that Peiping had attempted to license certain “friendly” companies in Japan for trade and asked the Prime Minister for his assessment of the attraction exerted toward Japan by Communist China. The Prime Minister, in reply, denied that this attraction is as great as the Japanese press indicates. He reassured the President that the great majority of Japanese people are most friendly toward the United States. Even the press favors strong ties between Japan and the United States. In fact at a recent round-table discussion of foreign policy problems by journalists Japanese recognition of Peiping under present conditions was rejected.

None of Japan’s big companies has been licensed by Peiping to trade with her; only small and medium size firms with leftist tendencies have been so licensed. The Japanese Government hopes to establish an export-import organization to trade with Communist China under government subsidy in an attempt to prevent that regime from channeling Sino-Japanese trade through selected friendly companies.

The Prime Minister characterized the attraction of Communist China as one of “mood”. He asserted that Japan does not wish to disturb her economic relations with the United States merely for trade with Peiping, for such a move would lead to a Japanese economic collapse. He reviewed the Chinese Communist attempt to license “friendly” firms for trade in the same way some British firms are so licensed. He felt that this type of classification of trading firms as “friendly” and by implication “unfriendly” would divide the business community of Japan much as Korea is divided by the 38th parallel.

He explained that Japanese trade with the Peiping regime through private companies is of slight scale and value. Since the big companies, such as those in the steel industry, experienced an arbitrary cancellation of contract by China in 1958 there need be no concern about their position on the resumption of trade.

The Prime Minister reaffirmed the Japanese Government’s position on the China problem, which he had explained on June 20.1 He expected that concrete discussions would take place between Foreign Minister Kosaka and Secretary Rusk.2 He also pointed out that the Foreign Minister would shortly visit London to exchange views with Prime Minister Macmillan, who is scheduled to visit Japan in September of this year. He hoped that a mutually agreeable policy could be achieved by that time. In any event, he promised to continue to consult fully on this matter.

[Page 698]

The President explained that the United States views the problem of recognition of Outer Mongolia with gravity. Since the USSR insists on Outer Mongolian admission to the United Nations as a quid pro quo for Mauritania’s admission, the Republic of China stands to lose at least 6 or 7 African votes in the General Assembly should she veto the admission of that regime. Unfortunately, the GRC has already announced her intention to veto Outer Mongolia’s application for admission.

The Prime Minister suggested that the Republic of China must somehow be brought to view this matter in proper perspective. He recalled that the legal status of the island of Formosa was not determined at the San Francisco Peace Conference, at which Japan merely renounced her sovereignty. He repeated a suggestion he had made to Ambassador Stevenson, that a conference of those nations which attended the San Francisco Conference be called to determine the legal status of Formosa.

The President commented that both Mao and Chiang are bitterly opposed to any “two-Chinas” solution and expressed doubts that both parties could be brought to agree to a solution.

  1. Source: Department of State, Central Files, 693.94/6-2161. Secret. Drafted by Wickel and approved in S and by the White House on August 11. See the source note, Document 335.↩
  2. See Document 330.↩
  3. See footnote 1, Document 330.↩