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(c) The application of economic sanctions in their
most rigorous form supported by a naval blockade would do little damage in the near future to China's war potential. On the other hand, the repercussions might range from more increased tension to an expansionist war by China in South- East Asia which might well lead in its turn to general war.
(a)
In the best case the actual institution of the blockade would not call for an increase in United Nations forces. In the worst case, however, Chinese overt aggression against Hong Kong, Indo-China, Burma, Siam and Malaya and attack on the forces instituting the blockade would call for an increase in United Nations forces which would prejudice our global strategy.
(e) Russia and the Communist bloc in general would take every opportunity to increase our difficulties.
If the United Nations becomes heavily embroiled in China as a result of economic sanctions Russia may well take advantage of the situation to embarrass the Western Powers elsewhere.
As regard the political implications of full economic sanctions, we have reached the following conclusions:
(1)
(2)
(3)
They would result in heightening international tension in the Far East and would reduce the prospects of an eventual negotiated settlement with China.
India, Pakistan and a number of other Asian countries would not participate in economic sanctions and would almost certainly regard their enforcement as a dangerous step towards war..
The threat to Hong Kong and to Indo-China would be much increased.
(4) Inside China there would be increasi ng pressure to
divert the energies of the Chinese revolution from a policy of economic reconstruction to one of military expansionism.
(5)
(6)
China would increasingly feel compelled to cement, both politically and economically, her already close alliance with the Soviet bloc. (It is perhaps significant that on 5th February Peking announced the conclusion of economic and shipping agreements between China and Poland.)
Drastic economic sanctions would provide China with considerable and effective "anti-Imperialist propaganda"
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