Created: 9/16/1958

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The foOowtng mteBlgeitee oroaalraikm,ht prtperetten ol thU titlmott; The Central IntrMietnce Agave? and iht mteUkjeue* oroenuatloni ef the Deportment* ol State, theUe New. tke Ah- Force, ant Tht Jotnt Staff.

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on llS. Conewrlno loot the Duxeto'n-UUVenct andepartment of State; the Aitist-ent ChUI ol Stag lor IntelUeenet, Department ol the Armp; tht Pirn lor oi fatal lateUtgenet: the AuUtant Chitl ol Slaff. MtUigenct. OSAT; Vu Director lor Inteltt-ptnet. The Joint Staff; the aautant te the See>ttarf olSpecialnd tht Director ol the National Secant*ht Atomic Krwep CommUiton Ktprt-tentaltoe to tht IISIB and the AuUtant Director. roSttl Bureau ol /nbCrKciifcrn. abtlained, the tubtrxt being outldt

ef their frUdtdion


DISSEMINATIONtedtMemlnatwl by the Central Intelligence Agency. ThU copy

son, uadt* ^Jurisdictioneed to know basis. Additional es^Ua!may be authxtfized by tbe following officials within their respective der^SsT^

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_ opy may be retained, or destroyed by burning In accordance with aorjll-

etUmed toAgency by arrange-

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Itmay retain

Iteriod not in excess of oney&ri^At the end of tht. period, tt* ZtbZ



National Snvrltr Council Department ot Slate Oepartinuit or Dtffr.sej.vBoard Aiomit Unrig;Federal Burvim or Invoitaallon

rTueatS TTf-fi^ency. or^rinlsslonwithc



To reassess the probable intentions of Communist China and the "Soviet Union with respect to the Taiwan Strait area in the light of the most recent evidence.



e believe tbat the most likely Chinese Communist course of action ln the immediate future is to continue military harassment and mterdiction of supply of Chin men. TheCommunists probably expect this course to make the bland untenable, and thereby to put the neat move up to the US. The USimited range of choices: it can allow theto fail by attrition; it can assist theNationalists to withdraw from theit can agree to Chinese Nationaliston the mainland; It can undertake to maintain resupply of Chinmen byconvoys; or it can itself take the military action necessary to assure resupply of theby the Chinese Nationalists. Any of the latter three courses of action eventually would probably involve US attacks on the mainland, and the US could be charged before world opinion with expanding the scope of armed conflict.

n pursuing this course, it Is likely that the Chinese Communists are willing to takeinvolving considerable risk of major armed conflict with the US. If US ships move close in-shore in the course of escorting Na-

' Thb estimate supplements SNIEevelopments ln the Taiwan SliallS.

tionalist supply convoys, the Communists will probably not desist from their artilleryagainst unloading operations. If the US attempts to prevent by force theof supply, US forces so engaged willcertainly be attacked within the limits of Chinese Commnnbt capabUitles- If the US were to announce that it would resupply Chlruncn with all-American convoysby appropriate combat strength ready to defend against attack) wc believe that the Chinese Communists would probably attack the US force, although therehance that they would not In any event, thewill demand that world opinion condemn US aggression andolitical settlement favorable to Communist China.

n addition to the continued interdiction of Chinmen, the Chinese Communists might seize, with little or no warning, one or more of the smaller offshore Islands. This would be calculated to faU outside the scope of any US commitments to GRC defense and would serve further the Communist objective of eroding the Nationalist position. The effect would be further calculated as not prejudicing theCommunist position of negotiation, but, rather, as Increasing the international sense of urgencyeaceful settlement and. at the same time, placing added politicalon the US.


be Soviet leaders cannot be greatlywith the fate of the onshore Islands, and. having leu directly-at stake than the Chinese Communists, may be tacltned toa more conservative course. Tbeirobjectives are politicalto discredit the US. to comply with the wishes of theirally, and to enhance the power andof the Slno-Sovlet Bloc They believe that the opportunity to put the US In the dockaccusations of Jeopardising peace should be utilised to the maximum, and thatfor the US would be far less than It was in tbe Middle East crisis'- They also believe that If the US backs down from IU position on the onshore Islands or acts In defiance ot world opinion, they will have inflicted apolitical defeat oo the US.

hile the Soviets probably do not wish to see tbe scale of hostilities expanded and the risk of their Involvement magnified, they will be aware that the US may be led by Chinese Communist actions to engage Chineseforces. If such hostilities arebut limited to conventional weapons and confined to the mainland area adjacent to the Taiwan Strait, the Soviets would probably consider that the Chinese Communists did not require direct military assistance and would provide moral, political, and materialThus, they would almost certainly not Intervene militarily, at least in anirect confrontation of Soviet and US forces.

f hostilities continued for long, orif they were expanded in area and scale, et some point the Soviets would probablyfeel that they would have to go further lnof Communist China. With respect to Soviet reactions lo the US use of nuclear weapons, much would depend upon the scale of the US attacks, the extent of territory over which they would be delivered, and thecontext of events. The Soviets might conclude that more could be gained at less cost and risk by exercising military restraint andolitical campaign to condemn the US before world opinion. They would have many supporters. On the other hand.


Soviets might conclude that such acould not be passed by without nuclear retaliation. Particularly If the US extended the area of nuclear attackonsiderable distance Into mainland China, there wouldetter than even chance that the Soviets would provide the Chinese Communists with capabilities for nuclear retaliation undercontrol- And, at some point highcale of Increasing damage and danger to the Chinese regime, the Soviets might directly attack OS forces engaged In China, Including tbe bases from which such forces werein the face ol the attendant risk ofwar.


n each of the contingencies discussed above the USSR will make every effort tothe situation politically and at the same time to prevent the spread of hostilities. The-Chinese Communists are now engaged Inwith the US on the Taiwan Strait question In the ambassadorial talks.they probably hope that world opinion and the continuing military threat to Chin-men will force the US to agree to higher-level discussions, suchilateral foreignconferenceultilateral conference, possibly even at the summit level. They may fear that an attemptolution In the UN would solidity opinion in favor of anof "twoowever, bothand Peiping apparently deem Itto raise the Issue in the Generaleither toS Initiative or In hopes of furthering their sums of pillorying and Isolating the US.

egardles of the forum. It Is clear that the Chinese Communists are In no mood for any negotiated zctUement which wouldthe status quo ante. They will oppose any proposal that smacks of "twohat commits them to accepting the principle that they have no right to "liberate" theheld by the ORC, or that grantsight to Individual or collectivein the Taiwan Strait area. While it Is possible that they wouldemporary cease-fire to develop during the negotiations In order to enhance their propaganda posture, they would be unwilling to commit themselves to an indefinite cease-fire. They wouldany proposal which seemed to tic their hands more than those of the ORC. They might accept some type of "neutralisation" of the offshore islands as an Interim move, hoping that the negative effect on ORCwould be greater than the restriction on Communist activities. However, theycertainly would not regard thisermanent solution. Sino-Soviet insistenceesolution of the entire Taiwanfavorable to Communist China will remain strong, and It Is likely that they will continue toonsiderable risk in utilizingpressureeans of undermining the strength snd determination of the Chinese Nationalists.


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