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United States Department of State / Foreign relations of the United States, 1955-1957. China

United States policy with regard to the People's Republic of China and the Republic of China, January-July 1955,   pp. 1-689 ff. PDF (242.1 MB)

Page 617

                                            The China Area     617
the rapid strides being made by Communist China in improving the
road and rail network from the interior to the coast opposite Formo-
    "At the conclusion of Mr. Dulles' above comments, the Presi-
dent said that the Burmese Prime Minister had made a very odd
remark to him at lunch yesterday. He said that the Chinese Commu-
nists were getting absolutely nothing from the outside world that
they were not obliged to pay for. Mr. Dulles said that this was prob-
ably true even of what they obtained from the Soviets, but the sig-
nificant question was the price. The President replied that he under-
stood that all the trade of Communist China was in goods, not cash.
Secretary Dulles called attention to the existence of a Russian loan to
Communist China. Mr. Allen Dulles acknowledged the existence of
this loan, but said that CIA believed that it was pretty well exhaust-
ed. He added that the Chinese were selling rice in order to get rubber
from Ceylon, despite the grave food shortage in Communist China."
    After some unrelated discussion,
    "Secretary Dulles interrupted to say that he wished to put a
question to Admiral Radford. Secretary Dulles said he understood
that the Chinese Nationalists were preparing to send another division
to reinforce the troops already on Quemoy. We had opposed this
move but had apparently been overruled. This was a serious matter,
in Secretary Dulles' view, and the United States had a legitimate
right, based on the exchange of notes in connection with the mutual
defense treaty, to prevent such moves. Secretary Dulles believed that
this Government should give very serious attention to this matter.
    "In reply, Admiral Radford pointed out that no precise time had
been set for the transfer of this division; nor, indeed, had U.S. au-
thorities in Formosa agreed to such a move. The Generalissimo had
simply insisted that the division would be sent. Secretary Dulles
again stressed the right of the United States to block the move. The
President said he would like to be kept informed of developments in
the affair."
     At the conclusion of Director Dulles' briefing, the discussion re-
verted to China:
     "Dr. Flemming said that he wished to revert to Mr. Dulles' anal-
ysis of the build-up of Chinese Communist air capabilities in areas
opposite Formosa. He asked Mr. Dulles if his remarks should be
taken to indicate that the Chinese Communists could launch an
attack on the off-shore islands or Formosa with little or no notice.
The President answered that of course they could if the attack were
launched from the air.
     ""Dr. Flemming then inquired whether any intelligence available
to the U.S. indicated the likelihood of a Chinese Communist attack
in the immediate future. Mr. Allen Dulles replied that the build-up
to which he had referred in his briefing had been a very gradual
build-up, and that there were no intelligence indications of the likeli-
hood of an attack in the near future.
     "Admiral Radford was inclined to take some issue with Mr.
 Dulles' reply to Dr. Flemming. He pointed out that the build-up was

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