Mr. Dulles' recent statements on American negotiations with the Peking Government suggest that U.S. policy on China may be moving more rapidly than we had supposed or expected.¹²¹ The attitude of Senator George is only slightly less significant. It might be noted also that the New York Times of July 27 stated:

"Meanwhile at the Capitol the strongest backers of President Eisenhower's foreign policy were confident that a Foreign Ministers' meeting was on the way. There was no doubt of this in the mind of Senator Walter F. George, Democrat of Georgia, chairman of the Senate Foreign Relations Committee."

In spite of Mr. Dulles' pious talk about remaining loyal to the Nationalist Chinese ally it does seem possible that, deliberately or not quite consciously, preliminary steps to at least de facto recognition are being taken. In view of the extreme delicacy of the question in domestic politics, it is also possible that the U.S. will not be able to discuss its policies very frankly with its friends and we shall, therefore, have to guess at what they might have in mind.

2. In view of these new developments, or assumed developments, we should perhaps have a new look at Canadian policy. It is by no means certain, of course, that the U.S. will in the near future recognize the Peking Government, but there is a good chance that it will do so, and we should be prepared for such an eventuality. If the U.S. does recognize Peking, I presume that Canada and most other countries will do likewise. The question arises, therefore, whether we wish to do so before or after the U.S. step is taken.

3. I presume that there would be less opposition to the move within Canada if it were taken after the U.S. than if it were taken before. There are, however, objections to our following the Americans or even to our joining in some prearranged simultaneous move with the U.S. and other Western countries. It has all too frequently been alleged that we have in our policy on recognition humbly followed the U.S. and not taken a position of our own. We have constantly denied this charge and have pointed to the clear differences in many ways between our policy towards China and that of the U.S. However, if we delay recognition until a short time after the U.S. or even till the same time, we should confirm in the minds of most people that the charge had been correct. Perhaps it does not matter very much what the Paraguayans or the Portuguese think of our policy, but it is of some importance that the Indians and the Chinese themselves respect and recognize our independence of approach.

4. Perhaps there is another argument for our preceding the Americans. Our policy has, I think, been based on the belief that recognition at some time was more or less inevitable. This view has been implied in public statements by the Prime Minister and yourself. If it is inevitable, there is a good deal to be said for getting on with it in order to clear the air and establish relations essential for at least co-existence. It is, of course, recognition by the U.S. which really matters. Recognition by Canada is of much less importance in the international scene. However, recognition by Canada could have an important effect in starting a process which might hasten considerably recognition by the U.S. You will recall a suggestion some time ago from Mr. Casey that Canada, Australia and New Zealand might at some suitable time take the important step of recognition and that in the right circumstances such a step would be welcomed secretly by at least some elements in the administration in Washington. It would probably be followed by similar action on the part of countries like France, Belgium, Mexico, Germany, Japan and prepare the way for the much more difficult step by the U.S.

5. Recognition by Canada would, of course, have the right effect in Washington only if it were not premature. Up to the present there has been good reason to think that it would be premature. American opinion would have reacted strongly against our recognition during the height of the Formosa crisis of last spring or in the emotional excitement over the American prisoners. We ourselves would have appeared inconsistent with our own declarations, furthermore, if we had recognized while the Chinese were still behaving in an obviously aggressive manner. The present period of détente, however, might be an appropriate time in which to settle this embarrassing question. Even if the situation should deteriorate later we need not regret having recognized because we would have taken the step necessary for us to deal more adequately with crises. We have not supported the theory that recognition means approval, and we have found diplomatic relations with other Communist countries like the Soviet Union useful in periods of emergency.

6. No one would be so bold as to say that the Chinese Communists have now clearly abandoned all aggressive intentions. Their behaviour at the moment, however, is less obviously offensive than it has been for some time in the past. They have been quiescent in Korea for some time. They may well be violating the Armistice Agreement in Korea by re-enforcing the North Koreans; these charges have never been clearly proved, though I suppose we must accept that the North Koreans are receiving military assistance from China. As for Quemoy, Matsu and Formosa, they have not renounced their intention to use force, but they have been for some time less aggressive in their statements. Chou En-Lai, for instance, has been putting increasing emphasis on seeking a peaceful solution to the Formosa dispute. The present Chinese position is that the question is an internal Chinese matter, which does not concern the United States, but which is capable of solution by negotiation. On July 30, Chou proposed negotiations with the provincial authorities of Formosa, a proposal which represents the first explicit admission by the Chinese Communists that the dispute could be settled by negotiation with a governmental agency more or less closely associated with Chiang. There is also a good case to argue that their intentions vis-à-vis former Chinese territories must be considered in a different category from their behaviour towards Korea and Indochina. It is not certain in fact that this can be properly described as aggression. As for Indochina I think that on the whole it would be difficult to prove that the Chinese, during the past year, have misbehaved badly with regard to the Geneva Agreement. We have had good reason to complain against North Vietnamese behaviour, but in spite of what we know about the central control of international Communist policy we can hardly pin the blame on Peking. As for the importation of war materials from China into Vietnam, it would be difficult for Canada to charge that this has taken place. We suspect that there may have been movements, but the Commission has found no evidence and we have received no reliable proof from other sources.

7. None of this adds up to a clear argument to prove the virtue and innocence of the Peoples' Republic of China. It merely suggests that the arguments against recognition are no longer as strong as they were. We should be careful not to get ourselves into a position where we seem to be demanding positive proof of utter purity from any state we recognize. We do after all recognize the Bulgarians who behave like barbarians.

8. Another argument for recognition at this point is that this direct Canadian contact with China may serve some specific useful purposes. We know that the Chinese do look upon us as somewhat more reasonable and trustworthy than other Western powers without, at the same time having any doubt as to where we stand on major issues. The Indians, the Swedes and the British in Peking have performed useful services, but the Canadians might strengthen the team and perhaps be used for purposes which the others could not so easily perform. The Americans, for example, might rely on our representatives' reports more even than on those of the British. If we were to send so experienced, fluent, and well connected a man as Mr. Ronning it is conceivable that he might achieve a good deal. At the same time it might be valuable to have a Chinese representative in Ottawa whom we could seek to influence, (although we must bear in mind that he would be in a position to influence improperly our Chinese community.) Such contacts might prove particularly valuable over Indochinese questions during the next year when the future of the Geneva Agreement will be in the balance.

9. A very practical, if perhaps slightly sordid, motive for beating the pack to Peking has to do with property. One might assume that the Chinese would give us pretty benevolent assistance in finding places to live and work in Peking and perhaps a reasonable settlement of our property in Nanking if we took a lead in recognizing them. However, if we were to arrive in company with or shortly after several dozen other contenders, we might find ourselves on the top layer of an old pagoda.

10. There are, of course, arguments against such a step. There is the difficulty of breaking relations with the Nationalist Chinese. These relations, however, have been in a twilight state for some time, and it is doubtful if there would be much difficulty in concluding them. Canadian public opinion has never been very enthusiastic about the Chiang Kai-shek régime even when it has been least friendly to Peking. There might also be an argument against taking a move of this kind so soon after the Geneva Conference lest it be thought that we had been moved by a superficial optimism. It is unlikely, however, that any such step could or should take place for a few months at least. Recognition in the near future would raise the ticklish question of acceptance in the United Nations as well. The British, of course, have recognized but not pressed for acceptance in the U.N. and we presumably could do likewise. Nevertheless a step by us now would certainly cause renewed interest in the subject at the forthcoming Assembly, whereas there is a good deal to be said for not debating this issue this year in New York lest it exacerbate the relations between China and the U.S. at the wrong moment.

11. It has become evident recently that the French attitude to the problem is changing rapidly. About two weeks ago, Mr. Pinay said in the Conseil de la République that the Western powers who have not recognized Peking would have to give consideration to a positive decision in the more or less near future. Such action, however, should be taken in concert with all the Western powers concerned, and particularly the United States. In the meantime, the French Government envisages contacts with Peking on the economic and cultural plane. When our Embassy enquired of the Quai d'Orsay what was the background to Mr. Pinay's statement, we were informed that the French Government intends to move cautiously in the direction of closer contacts with China, and that a French Parliamentary delegation would visit Peking at the end of September subject to the agreement of the Peking authorities.

12. If there is a case for Canada's recognition of Peking, it seems that it might be wiser to put off such a step for a few months at least.¹²² Such an important step would presumably have to be preceded by considerable discussions inside the country and with our Commonwealth friends. Concerted action with Australia and New Zealand might be desirable, and this would require some negotiations. It is a step which I presume the Cabinet would wish to discuss, and I presume, furthermore, that it is not a step which the Government would wish to take soon after the adjournment of Parliament. It may not be too soon, however, to look again at our policy on the subject and possibly to begin some tentative conversations with the Australians and New Zealanders.¹²³ In view of the importance of secrecy you might wish to begin by raising the subject in a personal letter to Mr. Casey.¹²⁴

R.M. M[ACDONNELL]