Med 1189

CONFIDENTIAL

BRITISH EMBASSY,

PEKING.

36

R J T McLaren Esq CMG

AUSS

F CO

√.cc

Dear Robin,

TAIWAN

НКВ огол

2/11

25 October 1989

Mr Gulinore

Mr Paul, HKD

Mr Corps, Why Hanny Stalt

венчи

Mr Walker, Researk byL Cal. office Assessment Shift.

M. Tilligh, FES)

This is

4

usefully comprehenfur litt

& Kunely in view of Mr Haude's reque tra culumission

Ramonu pozicz

should be goulful fra dink repy' ui den

Coure.

1.

In my Despatch "China in Crisis: Britain's Policy" dated 8 August, I undertook to comment separately on British policy towards Taiwan in the light of the events of 4 June. Undoubtedly we shall come under increasing pressure from the "Taiwan lobby" in Parliament and business circles to relax our policy even further towards Taiwan. Much of this pressure will be instigated by the authorities in Taiwan, who must see the ruthless suppression of the protests in Peking as a heaven sent opportunity in their campaign to gain international recognition. In this letter, I shall argue that to succumb to such pressure would be mistaken; that to do so would be to gain minimal, if any, commercial benefit in Taiwan at the cost of considerable damage to our bilateral relationship with the PRC, including both our ability to influence Chinese thinking on Hong Kong and our substantial commercial interests here.

2.

Throughout the first half of this century one of the main aims of all Chinese, including both the KMT and CCP, was the reunification of the motherland with Hong Kong, Macao and Taiwan. This reunification would finally eradicate the remaining evidence of the "humiliations inflicted upon the Chinese nation by the Imperialist powers. With the surrender of Japan in 1945 both the CCP and KMT regarded the return of Taiwan to Chinese sovereignty as an established fact. After taking Hainan island in early 1950, the CCP confidently expected to take Taiwan and end the civil war before the end of the year. The Korean war and Truman's blockade stopped that and, in effect, allowed the Chinese civil war to go on. It does, in a sense, to this day, with two governments claiming to represent China. Peking's

CONFIDENTIAL

/sensitivities

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