Title: The legacy of the Korean War: Impact on U. S. Taiwan relations. Authors

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The legacy of the Korean War: Impact on U.S.-Taiwan relations.


Lin, Cheng-yi


Journal of Northeast Asian Studies; Winter92, Vol. 11 Issue 4, p40, 18p

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*KOREAN War, 1950-1953

UNITED States -- Foreign relations
TAIWAN -- Foreign relations

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Focuses on the impact the Korean War had on the United States' (U.S.) relationship with Taiwan. Information on the military aid which was provided by the U.S. to Taiwan; Indepth look at the deterioration of the Republic of China's international status; Discussion on the economic aid the U.S. gave to Taiwan.

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The legacy of the Korean War: Impact on U.S.-Taiwan relations.


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If there had not been a Korean War, the Chinese Communists would probably have invaded Taiwan in 1950. After the outbreak of the Korean War, the United States began to reverse its hands-off policy toward the Chinese Nationalists on Taiwan. The Korean War first compelled the United States to grant military aid to Taiwan and then put the island under U.S. protection. The war forestalled the deterioration of the ROC's international status, but the legal status of Taiwan became undetermined in the eyes of U.S. policymakers. U.S. economic aid prevented Taiwan from sliding into an economic depression in the 1950s, and greatly contributed to the island's later economic takeoff.

The former Republic of China (ROC) ambassador to the United States, Wellington Koo, once drew a parallel between the Korean War and Pearl Harbor because both hit Washington by surprise, and in both cases U.S. decision-makers disregarded prior warnings from the Chinese.1 Both attacks compelled the United States to go to war, and on both occasions this simultaneously saved the Kuomintang (KMT) from total defeat. One high-ranking KMT official even described the Korean War as the Sian incident in reverse- an unexpected twist of fate that saved the KMT from total annihilation.[ 2] Before the outbreak of the Korean War, KMT-controlled Taiwan (then called Formosa) fell outside the U.S. defense perimeter, and the Truman administration had assumed the final defeat of the KMT to be only a matter of time. Immediately after the outbreak of the war, President Harry S. Truman decided to neutralize Taiwan, both to protect it from communist invasion and to prevent the MT from using it as a base to mount an assault on the mainland. The Korean War also forced President Truman and Secretary of State Dean Acheson to resume their entanglement with the KMT.

In the three sections of this article, the author will analyze the military, political and economic dimensions of relations between the United States and the ROC following the Korean War to determine whether the war marked a new beginning for the ROC.

1. From Taiwan Abandoned to Taiwan Neutralized

On December 9, 1949, the KMT under Generalissimo Chiang Kai-shek established its anti-communist bastion in Taipei. Two weeks later, the U.S. State Department sent a telegram to its overseas embassies indicating that Taiwan was expected to fall into the Chinese Communist hands and that the island held "no special military significance" to U.S. security.[ 3] On December 29, 1949, the National Security Council (NSC) decided that "no further action would be taken to assist the Chinese Nationalists to hold Formosa.[ 4]

On January 5, 1950, President Truman announced that the United States would "not provide military aid or advice to Chinese forces" on Taiwan.[ 5] A week later, Secretary of State Acheson declared in a later controversial speech delivered before the National Press Club in Washington that the U.S. defense perimeter ran from the Aleutian Islands to Japan, the Ryukyu Islands, and south to the Philippines.[ 6] Acheson's speech was criticized as one of the key reasons for the outbreak of the Korean War, but it is unfair not to point out that on March 1, 1949, General Douglas MacArthur said the same thing in an interview but reversed the geography.[ 7] What separates MacArthur from Acheson is that he and the joint chiefs of staff (JCS), by the end of 1949 strongly urged the implementation of a "modest, well-directed and closely supervised program of military aid" to Chiang Kai-shek, while Acheson believed that "the Nationalists would not fight in Formosa any harder than they had fought for the mainland.[ 8] The State Department and the NSC, with the endorsement of President Truman, gained the upper hand in U.S. policy toward the shaky Chiang Kai-shek regime.

President Truman compared the North Korean invaders with Hitler, Mussolini, and the Japanese, and firmly believed that there would be a domino effect if the invasion was allowed to go unchallenged.[ 9] On June 27, 1950, Truman approved State and Defense Department recommendations and "ordered the Seventh Fleet to prevent any attack upon Formosa," calling upon "the Chinese Government on Formosa to cease all air and sea operations against the mainland.[ 10] The KMT agreed to Truman's request in principle but asserted that its sovereignty over Taiwan should not be challenged.[ 11] The Chinese Communist leaders Mao Zedong and Zhou Enlai saw Truman's statement as an act of aggression and intervention against China, as it sought to block their "liberation" of Taiwan.[ 12]

Secretary of Defense Louis Johnson and the JCS seized upon the evolving crisis in the Far East to reverse the position of the State Department and NSC toward Taiwan. In a NSC meeting on July 27, 1950, President Truman approved "the granting of extensive military aid to Nationalist China; a military survey by MacArthur's headquarters of the requirements of Chiang Kai-shek's forces; and the plan to carry out reconnaissance flights along the China coast to determine the imminence of attacks against Formosa.[ 13] However, President Truman made it clear on August 30, 1950, that the United States was ready to withdraw the Seventh Fleet as soon as peace was restored in the Korean Peninsula.[ 14]

It should be noted that Truman did not grant the all-out support to Taiwan that the KMT had expected. The president adopted a "three-nos" policy toward Taiwan-no U.S. fighter squadrons to be based on Taiwan, no U.S. forces to be based ashore on the island, and no U.S. defense commitments to be extended to the offshore islands.[ 15] Against this backdrop, Truman was furious to learn about MacArthur's remarks to the annual gathering of Veterans of Foreign Wars (VFW):

As a result of its geographic location and base potential, utilization of Formosa by a military power hostile to the U.S. may either counter-balance or overshadow the strategic importance of the central and southern flank of the U.S. front line position. Formosa in the hands of such a hostile power could be compared to an unsinkable aircraft carrier and submarine tender ideally located to accomplish offensive strategy and at the same time checkmate defensive or counter-offensive operations by friendly forces based on Okinawa and the Philippines .... Nothing could be more fallacious than the threadbare argument by those who advocate appeasement and defeatism in the Pacific that if we defend Formosa we alienate continental Asia.[ 16]

President Truman to MacArthur's suggestion of a "military policy of aggression" and he had deliberately rejected President Chiang Kai-shek's offer to send 33,000 Nationalist troops to assist South Korea because "it would be a little inconsistent to spend American money to protect an island while its natural defenders were somewhere else.[ 17]

The People's Republic of China's (PRC) intervention in the Korean War struck the U.S. Eighth Army and X Corps a heavy blow in November 1950, and the JCS began to question President Truman's military neutralization of Formosa. On November 20, 1950, the JCS sent the Department of Defense a memorandum, to which acting Secretary of Defense Robert Lovett concurred, arguing that military neutralization of Formosa would:

a. Considerably improve the Communists' strategic position and release some of their defense forces for building-up elsewhere; and

b. Substantially reduce our [America's] own strategical position in the area and would restrict freedom of action in the event the military situation requires that an armed attack against the Chinese Communists on the mainland be mounted.[ 18]

The JCS then emphasized "the strategic importance of Formosa" and suggested that "it would be desirable to have port facilities and airfield on Formosa available to the United States," if a full-scale war should develop against Communist China and the Soviet Union[ 19] The new Secretary of Defense George C. Marshall, who was not as supportive of the KMT as his predecessor Louis Johnson, argued that Taiwan was "of no particular strategic importance" in U.S. hands, but it "would be of disastrous importance if it were held by an enemy.[ 20] In December 1950, Truman indicated to British Prime Minister Clement Attlee that Chiang Kai-shek intended to get the United States involved militarily on the Chinese mainland. Under pressure from the U.S. Senate, Truman stated the United States would not allow Formosa to fall into Communist hands.[ 21]


By January 1951, Taiwan had received military hardware worth US $29 million, and the U.S. Department of Defense, responding to reports on Taiwan by Major General Alonzo P. Fox's military survey group, requested President Truman to allocate US $71.2 million for Formosa for FY 1951.[ 22] Later that same month, the State Department instructed the U.S. embassy in Taipei to exchange notes with the ROC Ministry of Foreign Affairs, which led to a Mutual Defense Assistance Agreement (MDAA) between the two governments.[23] The MDAA was designed to legitimize the use of incoming U.S. military aid to Formosa for the island's internal security and self-defense.

In March 1951, the departments of State and Defense urged the establishment of a Military Assistance Advisory Group (MAAG) on Formosa, and soon after appointed Major General William C. Chase as chief of MAAG, Formosa.[ 24] The responsibilities of MAAG, Formosa included checking military aid shipments on receipt, control of distribution, and advising the KMT on military training and reorganization.[ 25] The U.S. minister to the ROC, Karl Rankin, recommended an increase in U.S. MAAG personnel in 1951, but it was not until 1952 that his recommendation was acted upon and the number was increased to about 770.[ 26] The MAAG advised the ROC government to reorganize its armed forces into twenty-one army divisions (originally thirty-one divisions), a small modern air force, and a navy capable of little more than coast patrols.[ 27] However, MAAG, Formosa failed to convince President Chiang Kai-shek to abolish the system of political commissars in the armed forces.[ 28]

2. Deneutralization of Taiwan and the U.S.-Taiwan Defense Pact

President Truman's neutralization policy was discarded when Dwight D. Eisenhower was elected president in November 1952. Even before the inauguration, Eisenhower and Secretary of State-designate John Foster Dulles conveyed to British Prime Minister Winston Churchill in January 1953 their intention to revise Truman's policy toward Taiwan.[ 29] The British believed the new move would have "great international political repercussions," and suggested "consultation among the interested powers.[ 30] However, Eisenhower announced on February 2, 1953, in his first State of the Union address to Congress that since the Chinese Communists had consistently rejected the Korean armistice proposals, he was issuing "instructions that the Seventh Fleet no longer be employed to shield Communist China.[ 31] On February 3, 1953, President Chiang, who had been notified two days earlier of Eisenhower's public statements, praised the new U.S. move as "judicious" and "militarily sound." In addition, Chiang Kai-shek requested closer "organized cooperation" between the U.S. and ROC armed forces and that U.S. protection be extended to the ROC-held offshore islands.[ 32]

On February 5, the MAAG, Formosa Chief William Chase suggested to ROC Chief of General Staff Chou Chih-jou that the ROC draw up plans to blockade the mainland and increase the frequency of raids against the Chinese Communists.[ 33] MAAG, Formosa requested the ROC not to utilize aircraft in raids on the mainland and to consult with them beforehand about "significant attacks" (any raids participated in by more than five hundred men) on the mainland.[ 34]

According to KMT estimates, there were approximately 1.5 million antiCommunist guerrilla forces on the mainland at the end of 1950.[ 35] After the Chinese Communist intervention in Korea, the U.S. Central Intelligence Agency (CIA) became involved in training the KMT to conduct guerrilla-style commando raids against the mainland from the ROC-held offshore islands and northern Burma.[ 36] By the end of 1952, such Nationalist hit-and-run raids had immobilized Chinese Communist forces of at least 200,000 in Southeast China, and killed or wounded 41,727 Communist troops.[ 37] The Truman administration made it clear in NSC 48/5 (May 1951) that if the PRC started conducting aggression outside Korea it was ready to incorporate the ROC forces and impose a blockade on the mainland coast.[ 38] President Eisenhower's policy of unleashing Chiang Kai-shek was thus achieved in an incremental way.

Chiang Kai-shek was "unleashed" by Eisenhower and Dulles's deneutralization of Taiwan, but Chiang's commitment not to invade the mainland was a requirement of the U.S. transfer of jet aircraft to the island. In an NSC meeting on April 8, 1953, Eisenhower approved a proposal that:

( 1) The U.S. Commander-in-chief of the Pacific should be instructed to expedite obtaining a commitment from the Chinese Nationalist Government that Chinese Nationalist forces will not engage in offensive operations considered by the United States to be inimical to the best interests of the United States.

( 2) Pending such a commitment, further shipments to Nationalist Government of jet planes from the United States should be stopped and the transfer to the Chinese Nationalist Government of jet planes already shipped should be delayed.[ 39]

On April 23, Chiang Kai-shek pledged not to "alter patterns and tempo of operations" against the mainland and on June 19, the ROC Air Force received its first allocation of U.S. F-84 jet aircraft. On July 16, the Nationalists launched a large-scale amphibious attack against Tungsban Island in Fukien Province, and later made an air strike to cover withdrawal from the island. Prior U.S. clearance of such air strikes was required, but proved impractical in actual engagement. Nevertheless, ROC Chief of Staff Chou Chih-jou later assured the MAAG that it would not happen again.[ 40]

After persistent requests from Nationalist China, the United States decided in July to extend its military aid and training program to the offshore islands, such as Quemoy and Matsu.[ 41] The NSC meeting on July 23, approved the transfer of two additional U.S. destroyers or destroyer escorts to the ROC.[ 42] This implied that the United States was encouraging the KMT to hold the offshore islands. In the meantime, Admiral Felix Stump, the U.S. Navy commander-in-chief, Pacific, divided the offshore islands into two categories. The Ta-chen island groups, in the low priority category, were regarded as "not essential to defense of Formosa and Pescadores."[ 43]

If the Korean War was the salvation of the ROC, an armistice in Korea could naturally complicate the U.S.-Taiwan security relationship. On March 19, 1953, ROC Ambassador Wellington Koo explored the question of a U.S.-ROC mutual security pact, but received a cold response from Secretary of State Dulles.[ 44] In June 1953, Chiang Kai-shek wrote at least two letters to President Eisenhower probing the possibility of U.S.-initiated Asian multilateral mutual security pacts.[ 45] Although Eisenhower believed that a mutual security arrangement must come from the Asian nations themselves, by August 1953 the United States had concluded mutual defense treaties with Japan, South Korea, the Philippines, Australia, and New Zealand.

The ROC government took the initiative and handed a draft U.S.-ROC mutual security pact to U.S. Ambassador Rankin on December 18, 1953. The Eisenhower administration was unwilling to include the offshore islands in the security treaty, and delayed any consideration of such a treaty until the conclusion of the Geneva Conference (April 1954) and Manila Conference (September 1954).

Immediately after the first offshore island crisis, precipitated by the heavy CCP bombardment of Quemoy on September 3, 1954, what proved of greatest concern in U.S. NSC meetings was not a security treaty with the ROC but rather a cease-fire proposal to be raised by New Zealand in the United Nations.[ 46] On October 7, 1954, President Eisenhower revealed to Dulles that he had decided to conclude a security treaty with the ROC provided that Generalissimo Chiang was prepared to assume a defensive posture on Taiwan.[ 47]

On October 13, 1954, Chiang Kai-shek complained to Assistant Secretary of State for Far Eastern Affairs Walter Robertson about the connection between the offshore islands crisis and the U.S. postponement of negotiations for a mutual defense treaty with the ROC. President Chiang also expressed his misgivings about the New Zealand cease-fire proposal.[ 48] It was not until October 18, 1954, that Eisenhower and Dulles began to work out a list of congressional leaders to consult with concerning the security treaty with the ROC.[ 49]

From November 2 to 23, 1954, ROC Foreign Minister George Yeh, Ambassador Koo, Assistant Secretary of State Walter Robertson, and Walter P. McConaughy, director of the State Department Office of Chinese Affairs, held a total of nine intensive meetings. On November 23, Yeh and Dulles initialed the Mutual Defense Treaty and related diplomatic notes.

Under the Mutual Defense Treaty, the United States obtained "the right to dispose such United States land, air and sea forces in and about Taiwan and the Pescadores as may be required for their defense." The offshore islands were not covered by the treaty in order to keep the CCP guessing as to U.S. commitments. In the exchange of notes related to the Mutual Defense Treaty, the ROC government was forced to agree that it could not unilaterally remove "military elements which are a product of joint efforts" by the two countries from Taiwan and the Pescadores. George Yeh requested that the United States not make the notes public simultaneously with the release of the contents of the treaty, out of concern for the public fury that might be unleashed in Taiwan by the U.S.-imposed limitations on KMT military maneuvers in the Taiwan Strait.[ 50]

In a memorandum to President Eisenhower, Secretary of State Dulles specified that "the Chinese (Nationalists) will not use force from either Formosa, the Pescadores or the offshore islands without our agreement and will not transfer military equipment and the like from Formosa to the offshore islands without our agreement."[ 51] Such a treaty could not involve the United States in a war with the CCP but did guarantee Taiwan's protection by an international agreement rather than by the previous unilateral statement.

In January 1955 when the Mutual Defense Treaty between the United States and the ROC was pending ratification by the U.S. Congress, PRC forces attacked some small offshore positions, including the I-chiang and Ta-chen islands. At a NSC meeting on January 20, Dulles suggested the United States grant logistical support to the ROC to evaluate the Ta-chen islands and that President Eisenhower be authorized by Congress to use forces in the Taiwan Strait if necessary.[ 52] On January 29, Congress voted favorably on the so-called Formosa Resolution authorizing Eisenhower to "employ the Armed Forces of the United States for protecting the security of Formosa, the Pescadores and related positions and territories of that area.[ 53] The Formosa Resolution implicitly granted protection to Quemoy and Matsu.

After the evaluation of the Ta-chen islands, Dulles, misjudging PRC intentions in the Taiwan Strait, recommended to President Eisenhower the practicability of using tactical atomic weapons to deter Beijing.[ 54] In NSC meetings on March 10, 24, and 31, 1955, JCS Chief Arthur W. Radford and President Eisenhower agreed with Dulles's judgment, and the nuclear threat was made known to the PRC.[ 55]

After the outbreak of the Korean War, the U.S. policy of protecting Taiwan's security, whether under the Truman or Eisenhower administrations, was built up step-by-step rather than the result of a sudden wholehearted commitment or dramatic change. The United States was ready to withdraw from Taiwan in May 1950, but by 1955 Taiwan's security was guaranteed by the mutual defense treaty and the Formosa Resolution in Congress; The Eisenhower administration even went to the brink of nuclear war against the PRC. It is no wonder that Eisenhower admitted that the Formosa crisis constituted one of the "most serious problems" of his administration.[ 56]


1. Undetermined Status of Formosa

On April 15, 1949, Michael J. McDermont, special assistant to the secretary of state for press relations, publicly stated that "the status of Taiwan is exactly the same as that of the Kurile Islands during the war and their final status will be determined by the peace treaty if and when we get one" with Japan.[ 57] This is the origin of the so-called undetermined status of Taiwan. George F. Kennan, director of the State Department Policy Planning Staff, also upheld his argument and suggested the establishment of a provisional "international or U.S. regime" on Taiwan, and that at some time in the future, a plebiscite be conducted to "determine the ultimate disposition of Formosa and the Pescadores."[ 58]

President Truman, however, did not accept this argument, and on January 5, 1950, he referred to the Cairo Declaration of 1943 and the Potsdam Declaration of 1945 and stated that the United States had "accepted the exercise of Chinese authority over the island (Formosa)."[ 59] However, in May 1950, John Foster Dulles, then consultant to the secretary of state, and Dean Rusk, assistant secretary of state for Far Eastern affairs, both believed that the legal status of Taiwan was "undetermined by any international act" and the United States should "neutralize Formosa."[ 60]

Immediately after the outbreak of the Korean War, President Truman finally and publicly adopted the suggestion to neutralize Taiwan, declaring:

The determination of the future status of Formosa must await the restoration of security in the Pacific, a peace settlement with Japan, or consideration by the United Nations.[ 61]

By being vague on the status of Taiwan, the United States or the United Nations could not only preserve freedom of action, but could also reject the CCP claim of sovereignty over the island. Also, the presence of the Seventh Fleet in the Taiwan Strait could not then be interpreted as intervention in the Chinese civil war.

The KMT was uneasy about the undetermined status of Taiwan, and pointed out on June 28, 1950, that Truman's statement should not alter "the status of Taiwan as envisaged in the Cairo Declaration, nor should it in any way affect China's authority over Taiwan."[ 62] Even though President Truman emphasized that the United States had "no predatory designs on Formosa" and "no desire to obtain special rights or privileges or to establish military bases on Formosa at this time," the legal status of Taiwan was not certain to U.S. decision-makers until the Shanghai Communique was signed in 1972. The United States acknowledged in that communique that "all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China.[ 63]

Due to the undetermined status of the island, proposals such as those for a plebiscite or UN trusteeship leading to an independent Taiwan or two Chinas were advocated intermittently by U.S. opinion leaders or overseas Formosan Independence Movement (FIM) members as solutions to the future status of Taiwan. For example, Senators Wayne Morse (D.-Oregon) and Estes E. Kefauver (D.-Tennessee) proposed UN trusteeship for Taiwan as a way to defuse the 1955 Taiwan Straits crisis.[ 64] In 1959, Robert A. Scalapino suggested in the Conlon Report that after the establishment of "the Republic of Taiwan," a plebiscite would be necessary to increase the legitimacy of the new independent country.[ 65] FIM leaders, such as Thomas W. I. Liao and Lung-chu Chen, favored a UN-supervised plebiscite on Taiwan.[ 66]

The other possible outcome for Taiwan was a two-Chinas formula. On January 19, 1955, President Eisenhower revealed in a press conference that recognition of the KMT and Chinese Communist Party (CCP) regimes as separate independent states was constantly studied by the United States, and that the United States favored UN efforts to arrange a cease-fire for the offshore islands.[ 67] The announcement came one day after the CCP seized the KMT-held I-chiang Island. The United States was repeatedly entrapped in conflicts over the offshore islands, and the two-Chinas formula, which was endorsed by the British Commonwealth, was seen as a way of internationalizing the Taiwan issue and also winning the support of U.S. allies. Nevertheless, KMT, CCP, and FIM representatives rejected the two-Chinas concept vehemently.

2. The Diplomatic Outlook for the Nationalists

After the Korean War, Taiwan's status became undetermined in the eyes of U.S. policymakers. On the other hand, whatever the status of Taiwan, the United States had no choice but to block the PRC from entering the United Nations, and, as a result, the ROC's status in the UN faced few challenges from the newly established PRC. The United States was first anxious to initiate UN resolutions condemning and imposing sanctions on the PRC. In February 1951, the UN General Assembly condemned the PRC as an aggressor against Korea, and, in May 1951, recommended an embargo on the shipment of arms, ammunition, and other materials of strategic value to the PRC. Under such circumstances, the United States naturally took a pro-ROC position in the United Nations.

In March 1950, before the Korean War, UN Secretary General Trygve Lie lobbied for the admission of the PRC to the United Nations. Responding to Lie's call, Secretary of State Dean Acheson made it explicit that the United States would not vote for the PRC's entry, but would refrain from using its veto and accept the majority decision of the United Nations.[ 68] At that time, the ROC's status in the UN was in jeopardy because five out of the eleven Security Council members, the USSR, the United Kingdom, India, Norway, and Yugoslavia, had recognized the PRC. A U.S. veto on the Chinese representation question could prevent the ROC's expulsion from the United Nations.[ 69]

The fifth General Assembly session decided in September 1950 to appoint a seven-country committee, including Canada, Ecuador, India, Iraq, Mexico, the Philippines, and Poland, to investigate the Chinese representation question, and it was suggested in October 1951 that no substantive action be taken on the issue. Meanwhile, the CCP representative Wu Xiuquan, in the UN Security Council, accused the United States of aggression against Taiwan, and declared that at least sixteen countries endorsed the PRC's admission to the United Nations. This episode further complicated the Chinese representation issue.[ 70] Counterbalancing the Soviet proposal to exclude the ROC, Thailand, in November 1951, proposed in the General Committee to postpone consideration of Chinese representation at the sixth session of the General Assembly, which later voted 37 to 11 with 4 abstentions to adopt Thailand's proposal.[ 71] Such a "moratorium" resolution was endorsed and afterwards applied by the United States to postpone discussion of Chinese representation by simple majority votes every year until 1960.

From 1951 to 1971, resolutions against the PRC's admission to the United Nations were adopted each year by the U.S. Congress.[ 72] The Committee of One Million Against the Admission of Communist China to the United Nations began organizing in 1953. Assistant Secretary of State Dean Rusk, on May 18, 1951, stated explicitly why the United States adopted such a position:

The Peiping regime may be a colonial Russian government-a Slavic Manchukuo on a larger scale. It is not the Government of China. It is not entitled to speak for China in the community of nations.

We recognize the National Government of the Republic of China, even though the territory under its control is severely restricted. We believe it more authentically represents the views of the great body of the people of China, particularly their historical demand for independence from foreign control.[ 73]

In 1952, the United States also modified its previous chilly attitude toward the ROC proposal which accused the Soviet Union of violating the Sino-Soviet Treaty of Friendship and Alliance of 1945. The ROC representative to the United Nations, Dr. Tingfu Tsiang, submitted two draft resolutions to the UN General Assembly, one in September 1949 and another in September 1950, accusing the USSR of obstructing "the efforts of the National Government of China in reestablishing Chinese national authority in Manchuria after the surrender of Japan," and in giving "military and economic aid to the Chinese Communists against the National Government of China."[ 74] The draft resolution was finally adopted by the General Assembly on February 1, 1952, and, according to ROC accounts, the United States, Cuba, and Peru were the three member countries that gave the strongest support to the ROC on this matter.[ 75]

The U.S. position on the voluntary repatriation of prisoners of war in the Korean War truce negotiations resulted in the defection of 14,000 Chinese Communist soldiers, approximately three-quarters of all Chinese POWs, to the on Taiwan.[ 76] The ROC's morale and international status was greafiy boosted when these anticommunist patriots arrived in Taiwan in January 1954. The ROC proclaimed January 23 as Freedom Day, and initiated the establishment of the Korea-based Asian People's Anti-Communist-League in 1954.

That the ROC's official relations with other countries were not greatly harmed by the loss of the mainland might be attributed to the CCP intervention in Korea. Apart from the Communist countries, only a few European democracies, such as Denmark, the Netherlands, Norway, Sweden, Finland, Switzerland, and the United Kingdom, and fewer still Asian countries such as India, Pakistan, Indonesia, Burma, Ceylon, and Israel, switched diplomatic recognition to the PRC. By 1952, the ROC government had diplomatic relations with forty countries, compared with only twenty-four countries recognizing the regime in Beijing. What was more important was that Formosa, under U.S. good offices, was able to conclude a peace treaty with Japan in 1952.[ 77]

After the outbreak of the Korean War, John Foster Dulles, then a State Department consultant, had requested ROC opinion regarding the Japanese Peace Treaty. The question of which China, the ROC or the PRC, should be represented at the San Francisco conference troubled the United States and the United Kingdom, and they decided to invite neither China. In a statement on June 18, 1951, Chiang Kai-shek protested any discriminatory treatment, and reaffirmed that "the Republic of China can only participate in the conclusion of such a treaty on an equal footing with other allies."[ 78]

The United States differed from the United Kingdom in its attitude toward Japan's signing a bilateral treaty with the ROC. The British did not want Japan to make its decision on the China question until the San Francisco Peace Treaty took effect.[ 79] John Foster Dulles, together with Senators John Sparkman (D.Alabama) and Howard Alexander Smith (R.-New Jersey), encouraged Japan to conclude a bilateral treaty with the ROC to assure Senate ratification of the Multilateral Japanese Peace Treaty.[ 80] Although Japan hesitated in accepting the ROC as the representative of all of China, the ROC, as a member of the UN Security Council, was capable of rendering Japan a great deal of assistance in its applications for membership in international organizations. CCP intervention in the Korean War and the 1950 Sino-Soviet Treaty of Friendship, Alliance and Mutual Assistance further dissuaded Japan from concluding a bilateral treaty with the PRC.

On December 24, 1951, Prime Minister Shigeru Yoshida sent a letter drafted by Dulles himself to Dulles, expressing Japan's intention to sign a bilateral treaty with the ROC. The U.S. State Department believed that the Yoshida letter removed major obstacles to a ROC-Japan bilateral peace treaty and hoped Taipei could "appreciate" U.S. efforts.81 On February 8, 1952, a week before the bilateral treaty was negotiated in Taipei, Secretary of State Dean Acheson instructed Ambassador Karl Rankin that if necessary the United States would consider "using its good offices to endeavor to complete the agreement."[ 82] Without the United States, the ROC could not have smoothly concluded the bilateral peace treaty with Japan in April 1952.


On January 5, 1950, President Truman announced that the United States would not provide military aid to Formosa, but economic aid to the island would continue. However, the categories of U.S. economic assistance were limited in scope, causing Senator William F. Knowland (R.-California) to complain to Secretary of State Acheson that all Economic Cooperation Administration (ECA) aid to Formosa "other than the fertilizer and rural rehabilitation programs" had been stopped at the beginning of 1950.[ 83]

Even after the outbreak of the Korean War in August 1950, Secretary of State Acheson was still cautious in confining ECA activities and functions in Formosa. In a telegram to the U.S. embassy in Formosa, Acheson pointed out:

In conducting United States aid programs on Formosa, it is not desired to establish enlarged U.S. participation in and assumption of responsibility for the administration of the island. For example, it would be unwise for ECA to become involved in any formal joint responsibility with the Chinese Government which might symbolize a U.S. commitment to underwrite the economy of the island.[ 84]


By November 1950, the United States delivered only about $21 million to Taiwan as part of the larger ECA program under the China aid of 1948 but Taiwan's deficit in international payments was approximately $90 million.[ 85] U.S. policy on economic assistance to Taiwan was not revised until the ECA Director William C. Foster visited the island in November 1950. Foster was the first high official in the Truman administration to visit Taiwan after the outbreak of the Korean War, and, after his visit, U.S. economic assistance to Taiwan not only increased, but also developed new forms.[ 86] From 1951 to 1965, the United States provided at least US $1.4 billion in economic aid and US $2.5 in military aid to the ROC.[ 87]

Without U.S. economic assistance in the early 1950s, Taiwan's economy might possibly have collapsed. In 1950 alone, retail prices in Taiwan rose 58 percent, from mid-1949 to 1951 wholesale prices rose 400 percent, and by early 1951, ROC-held gold and foreign exchange reserves were nearly exhausted.[88] Shortage of foreign exchange forced the shutdown of some overseas consulates, particularly in the Middle East and Latin America; by June 1951 the ROC also owed the United Nations and the World Bank membership dues of about US $5 and US $3 million respectively.[ 89] Approximately 80 percent of the national budget went to the military, so the island's economy could be sustained only with external assistance. An NSC report pointed out that "had it not been for increased MSA [Mutual Security Agency] aid during the fiscal years 1951 and 1952, a serious inflationary situation would have developed which might have well led to complete economic collapse."[ 90]

From FY 1951 to 1955, at least $507 million in U.S. economic aid was obligated to Taiwan, an average of almost $100 million per year. U.S. aid continued to pour into Taiwan until President Johnson put the ROC on an aid "graduation list" in 1965. According to Neil Jacoby, "Taiwan received 15 to 25 percent of U.S. regional aid obligations in most years and as much as 47 percent during 1954, at the apex of the post-Korean defense build-up."[ 91]

In 1952, the ECA was replaced by the Mutual Security Agency, which had a mission in Taiwan. The MSA mission carried out the U.S. economic aid program to Formosa with at least four objectives: ( 1) to maintain economic stability; ( 2) to lend economic support to the U.S. military assistance program; ( 3) to increase agricultural production and improve conditions of the farm population; and ( 4) to rehabilitate and further develop basic utilities and industries, thereby providing the means for making Formosa more nearly self-supporting.[ 92] The ROC counterparts of the U.S. MSA mission included the Council for United States Aid (CUSA), the Economic Stabilization Board (ESB), and the Sino-American Joint Commission on Rural Reconstruction (JCRR).

In 1952 for example, U.S. economic assistance could be classified into four categories: ( 1) the commodity program (58.35 percent; ( 2) the industrial program (23.54 percent; ( 3) common use items (15.74 percent); and ( 4) technical assistance and the JCRR program (2.37 percent).93 Formosa's low foreign exchange reserves resulted in commodity shortages, which threatened to produce radical fluctuations in prices. In the early period of U.S. economic assistance, the MSA mission in Formosa gave priority to the financing of commodity imports, such as textiles, soybeans, wheat and flour, fertilizers, soap ingredients, and medical supplies into the island.

U.S. aid to industry was aimed at establishing and expanding such areas as power generation, railways, highways, telecommunications, harbor facilities, shipbuilding, coal mining, and water conservancy. "Common use" items referred to commodity imports, such as aviation gasoline, lubes, and construction materials for airfields and barracks, consumed directly by the ROC armed forces. The technical assistance program was designed to enable Taiwan to better utilize U.S. economic aid, and the JCRR program focused on agricultural improvement projects, the setting up of farmers' organizations, irrigation engineering, rural health, and land tenure reform.

U.S. aid to the ROC on Taiwan from 1951 to 1965 provided the island with a solid foundation for its later economic, political, and social development. As Jacoby has said:

Aid more than doubled the annual rate of growth of Taiwan's GNP, quadrupled the annual growth of per capita GNP, and cut thirty years from the time needed to attain [the] 1964 living standard. Without aid, it was calculated that the GNP would have grown only 3.5 percent a year until 1983. The GNP in 1964 would have been only 58 percent of the actual amount. The actual GNP of 1964 would not have been attained until 1980. Actual per capita GNP of 1964 would not have been produced until 1985.[ 94]

During the U.S. aid period, industry replaced agriculture as the major source of output, and private emerged to take a dominant role in the industrial sector. Almost no foreign investment flowed into the island before 1961; nearly half of the investment Taiwan needed in this period was provided by U.S. aid.[ 95] From 1953 to 1962, wholesale prices in Taiwan rose at an annual rate of only about 7.6 percent.[ 96] Once U.S. aid had brought inflation under control, political stability on Taiwan became possible.

Although U.S. aid was a key factor in Taiwan's economic success, it would not have been possible without the hard work of Taiwan's population, the efficient development strategies of the Nationalist government, and the foundation laid by Japan during its 1895-1945 occupation period.[ 97] However, the U.S. aid mission failed to "measure the military burden on the Taiwan economy rigorously" and did not "study the political and social effects of aid."[ 98] As a result, the ROC has since become a country that maintains one of the world's highest ratios of military expenditure to total central government expenditure.[ 99] Meanwhile, political development in the ROC has not kept pace with economic progress.

Its effective use of aid made the ROC the first U.S. aid "graduate" country. In 1961, before aid was terminated, the ROC initiated "Operation Vanguard," a program of agricultural assistance to African countries aimed at winning their support in the UN.[ 100] Most recently in 1988, Taipei set up the Overseas Economic Cooperation Development Fund as its foreign aid channel.[ 101] Taiwan's economic development and its foreign aid policy demonstrate how successful the U.S. aid program was to Taiwan.


If there had not been a Korean War, the CCP would probably have invaded Taiwan in 1950. At that time, KMT policymakers were worried that their already-begun reorganization programs and the land reform would not come to fruition.

At the beginning of 1950, the Truman administration was ready to abandon the KMT regime, and the United States reversed its position on Taiwan only after the outbreak of the Korean War. The war first compelled the Truman administration to grant military aid to Formosa, and then to dispatch the Seventh Fleet to the Taiwan Strait. U.S. policymakers then decided to establish a MAAG on Taiwan, and to utilize the Nationalist forces, if necessary, to blockade the mainland and deter Chinese Communist expansion in Southeast Asia. It was the Chinese Communist intervention in Korea and its stubbornness in the armistice talks that persuaded the Eisenhower administration of the necessity of a defense pact with Formosa. The outbreak of the Korean War further forestailed the deterioration of the ROC's international status. The legal status of Taiwan became undetermined in the eyes of U.S. policymakers, but this posed hardly any challenge to KMT rule over the island. The PRC's intervention in the Korean War prevented its admission into the United Nations, and forced the United States to recognize the ROC as the sole legal government of China. The KMT chose national security rather than political liberalization, and in an effort to block any challenge to its rule, forbade the formation of any U.S.-supported opposition party.

U.S. economic aid prevented Taiwan from sliding into economic depression in the 1950s, and greatly contributed to the island's later economic takeoff. The U.S. economic assistance program, which was diversified as a result of the Korean War, was aimed at stabilizing Taiwan. The U.S. government encouraged the KMT to introduce political liberalization, but Washington policymakers refrained from threatening to halt economic aid as a sanction against KMT violations of human rights. To both the KMT and the United States, a militarily secure and economically viable Taiwan was a higher priority than a democratic Taiwan during the Korean War era.


1. Gu Weijun, Gu Weijun Huiyilu (Memoirs of Wellington Koo), vol. 8 (Beijing: Zhonghua Books, 1989), pp. 1-2. See also Allen S. Whiting, China Crosses the Yalu (Stanford, CA: Stanford University Press, 1960), pp. 62-68.

2. Guo Tingyu, Jindai Zhongguo Shigang (An Outline of Chinese Modern History), (Hong Kong: Chinese University of Hong Kong, 1976), p. 792. See also Jon W. Huebner, "The Abortive Liberation of Taiwan," The China Quarterly, no. 110 (June 1987), pp. 256-75; He Di, "The Last Campaign to Unify China: The CCP's Unmaterialized Plan to Liberate Taiwan," Chinese Historians, vol. 5, no. 1 (Spring 1992), pp. 1-16.

3. China: U.S. Policy Since 1945 (Washington, DC: Congressional Quarterly, 1980), p. 88.

4. Omar Bradley and Clay Blair, A General's Life (New York, NY: Simon and Schuster, 1983), p. 533.

5. China: U.S. Police Since 1945, p. 88.

6. Dean Acheson, President at the Creation (New York, NY: W.W. Norton & Company, 1969), p. 357.

7. Ibid.

8. Bradley and Blair, A General's Life, pp. 528-529.

9. Harry S. Truman, Memoirs, Vol. 2, Years of Trial and Hope (Garden City, NY: Doubleday & Company, 1956), p. 333.

10. Ibid., p. 339.

11. Taipei Zhongyang Ribao (Central Daily), June 29, 1950, p. 1.

12. Weidade Kangmei Yuanchao Yundong (Great Resist-America-and-Aid-Korea Movement), (Beijing: People's Publishers, 1954), pp. 3-4. See also Jonathan D. Pollack, "The Korean War and Sino-American Relations," in Harry Harding and Yuan Ming (eds), Sino-American Relations, 1945-1955 (Wilmington, DE: Scholarly Resources Inc., 1989), pp. 213-37.

13. Truman, Years of Trial and Hope, p. 349.

14. Gu Weijun Huiyilu, vol. 8, p. 119.

15. Truman, Years of Trial and Hope, p. 354; Gu Weijun Huiyilu, vol. 8, p. 41.

16. U.S. Department of State, Foreign Relations of the United States (hereafter cited as FRUS), 1950, vol. 6, East Asia and the Pacific (Washington, DC: Government Printing Office, 1976), p. 452.

17. Truman, Years of Trial and Hope, pp. 342, 348, 354; Douglas MacArthur, Reminiscences (New York; NY: McGraw-Hill Book Company, 1964), p. 339; Acheson, Present at the Creation, pp. 422-423; Gu Weijun Huiyilu, vol. 8, p. 94.

18. FRUS, 1951, vol. 7, China and Korea (Washington, DC: Government Printing Office, 1983), p. 1475.

19. Ibid.

20. Truman, Years of Trial and Hope, p. 408.

21. Ibid., p. 403.

22. FRUS, 1951, vol. 7, p. 1509; Gu Weijun Huiyilu, vol. 8, p. 274. 23. FRUS, 1951, vol. 7, pp. 1521-1522.

24. Ibid., pp. 1615, 1627.

25. Ibid., pp. 1593, 1650.

26. China Handbook, 1953-1954 (Taipei: China Publishing Company, 1953), p. 205; Karl Rankin, China Assignment (Seattle, WA: University of Washington, 1964), p. 105.

27. FRUS, 1952-1954, vol. 14, China and Japan (Washington, DC: Government Printing Office, 1985), p. 69.

28. FRUS, 1951, vol. 7, p. 1731.

29. FRUS, 1952-1954, vol. 14, p. 126.

30. Ibid., p. 129.

31. Ibid., p. 140.

32. Ibid., p. 135; Ziyou Zhongguo (Free China), vol. 8, no. 4 (February 16, 1953), p. 113.

33. FRUS, 1952-1954, 14, p. 144.

34. Ibid., p. 161.

35. Zhongyang Ribao, November 26, 1950, p. 4; December 13, 1950, p. 1.

36. William Blum, The CIA: A Forgotten History (London: Zed Books, 1986), pp. 18-19; Gu Weijun Huiyilu, vol. 8, pp. 344-345.

37. New York Times, December 7, 1952, p. 1.

38. FRUS, 1951, vol. 6, Asia and the Pacific (Washington, DC: Government Printing Office, 1977), p. 37.

39. FRUS, 1952-1954, vol. 14, p. 182.

40. Ibid., pp. 193-194, 231. pp. 233,240-241. p. 237.

41. Ibid., 233, 240-241.

42. Ibid., p. 237

43. Ibid.

44. Ibid.,p.158.

45. Ibid., pp.204, 213.

46. Ibid., p.613

47. Ibid., pp.708

48. Ibid., p.750

49. Ibid., p.613

50. Ibid., p.925

51. Ibid., p. 929; Ziyou Zhongguo, vol. 11, no. 12 (December 16, 1954), p. 373.

52. FRUS, 1955-1957, vol. 2, China (Washington, DC: Government Printing Office, 1986, pp. 71-72, 80-81.

53. Stephen P. Gibert and William M. Carpenter (eds.), America and Island China: A Documentary History (Lanham, MO: University Press of America, 1989), p. 130.

54. He Di, "Formosa Strait Crises and Formation of China's Policy toward Quemoy and Matsu," American Studies (Beijing), no. 2 (1988), p. 47.

55. FRUS, 1955-1957, vol. 2, pp. 347, 390, 433.

56. Dwight D. Eisenhower, The White House Years: Mandate for Change, 1953-1956 (New York, NY: Doubleday, 1963), p. 459.

57. FRUS, 1949, vol. 9, The Far East: China (Washington, DC: Government Printing Office, 1975), p. 328.

58. Ibid., p. 357.

59. Raymond Dennett and Robert K. Turner (eds.), Documents on American Foreign Relations, vol. 12, Millwood, NY: Kraus Reprint Company, 1976), p. 492.

60. FRUS, 1950, vol. 6, p. 350.

61. Truman, Years of Trial and Hope, p. 339.

62. China Handbook, 1951 (Taipei: China Publishing Company, 1951), p. 115.

63. Gibert and Carpenter, America and Island China, p. 113.

64. New York Times, January 23, 1955, p. 3; April 3, 1955, p. 2.

65. U.S. Congress, Senate, Committee on Foreign Relations, United States Foreign Policy, compilation of studies, prepared under the Direction of Committee of Foreign Relations, 86th Congress, 2nd Session, vol. 1 (Washington, DC: Government Printing Office, 1960), pp. 5549-51.

66. Thomas W. I. Liao, "Formosa and China," Far Eastern Economic Review, May 15, 1958, p. 620; Lung-chu Chen and Harold D. Lasswell, Formosa, China, and the United Nations (New York, NY: St. Martin's Press, 1967), pp. 150-155.

67. New York Times, January 20, 1955, p. A3; Arthur Dean, "United States Foreign Policy and Formosa," Foreign Affairs, vol. 33, no. 3 (April 1955), pp. 360-375.

68. China: U.S. Policy Since 1945, p. 89.

69. Gu Weijun Huiyilu, vol. 7 (Beijing: Zhonghua Books, 1988), p.702.

70. Weidade Kangmei Yuanchao Yundong, p. 48.

71. U.N. Yearbook, 1951, p. 265; Kuo-chang Wang, U.N. Voting on Chinese Representation (Taipei: Institute of American Culture of Academia Sinica, 1984), p. 26.

72. China: U.S. Policy Since 1945, p. 94.

73. FRUS, 1951, vol. 7, p. 1672.

74. China Handbook, 1952-1953, p. 131.

75. Ibid., p. 130; Department of State Bulletin, February 11, 1952, pp. 219-224; Gu Weijun Huiyilu, vol. 8, p. 161.

76. Rankin, China Assignment, pp. 188-189.

77. China Handbook, 1952 (Chinese edition), p. 362.

78. China Handbook, 1952-1953, p. 160. See also Gu Weijun Huiyilu, vol. 9, pp. 115-138.

79. FRUS, 1952-1954, vol. 14, p. 1082.

80. Ibid., pp. 1074, 1076, 1078, 1080.

81. Ibid., p. 1087; FRUS, 1951, vol. 6, Asia and the Pacific (Washington, DC: Government Printing Office, 1977), pp. 1445-1446, 1466-1467.

82. FRUS, 1952-1954, vol. 14, p. 1146.

83. FRUS, 1950, vol. 6, p. 261.

84. Ibid., p. 436.

85. FRUS, 1952-1954, vol. 14, p. 1056; Rankin, China Assignment, p. 70.

86. China Handbook, 1951, p. 116; Rankin, China Assignment, p. 75.

87. K.T. Li, The Evolution of Policy behind Taiwan's Development Success (New Haven, CT: Yale University Press, 1988), p. 55.

8. FRUS, 1952-1954, vol. 14, pp. 56-57, 325.

89. Gu Weijun Huiyilu, vol. 8, pp. 88, 385, 387.

90. FRUS, 1952-1954, vol. 14, p. 57.

91. Neil H. Jacoby, U.S. AM to Taiwan (New York, NY: Frederick A. Praeger, 1966), p. 11.

92. FRUS, 1952-1954, vol. 14, p. 54.

93. China Handbook, 1952-1953, p. 301.

94. Jacoby, U.S. Aid to Taiwan, p. 152.

95. Samuel P.S. Ho, Economic Development of Taiwan, 1860-1970 (New Haven, CT: Yale University Press, 1978), p. 115.

96. Taiwan Statistical Data Book, 1989 (Taipei: Council for Economic Planning and Development, 1989), p. 181.

97. Walter Galenson (ed.), Economic Growth and Structural Change in Taiwan: The Postwar Experience of the Republic of China (Ithaca, NY: Cornell University Press, 1979), pp. 371378.

98. Jacoby, U.S. Aid to Taiwan, p. 242.

99. World Military Expenditures and Arms Transfer, 1988 (Washington, DC: U.S. Arms Control and Disarmament Agency, 1989), p. 38.

100. George T. Yu, "Peking Versus Taipei in the World Arena: Chinese Competition in Africa," Asian Survey, vol. 3, no. 9 (September 1963), pp. 439-453.

101. Asia Wall Street Journal, April 21, 1988, p. 1.


By Cheng-yi Lin

Cheng-yi Lin is an associate research fellow at the Institute of European and American Studies, Academia Sinica, Taipei, Taiwan. He is the author of The Taiwan Security Triangle (Taipei: Laureate Publishing Company, 1989).

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