119. Memorandum From the Director of the Bureau of Intelligence and Research (Hilsman) to Secretary of State Rusk ^SourceSource: Kennedy Library, National Security Files, Countries Series, China. Secret; Noforn; Limited Distribution. Filed with a covering memorandum of the same date from Forrestal to Bundy, which reads as follows: “I will check with Averell to see if he agrees with this rather alarmist estimate. I will also ask CIA what its guess is.” A note in Bundy's handwriting on Forrestal's memorandum reads, “Hold for 6 pm meeting.” Reference may be to the June 20 meeting recorded in Document 122.

Washington, June 18, 1962.

• SUBJECT
• Chinese Communist Troop Movements

I. Chinese Communist Intentions

Reports of additional troop movements over the weekend lead us to take a somewhat more serious view of Chinese Communist intentions than we did initially.

In brief, our conclusions are as follows:

1. We still feel that the primary purposes of the reported movements are to deter the Chinese Nationalists from attacking the mainland and to ensure that defenses opposite Taiwan are adequate for all contingencies.

2. However, we are now inclined to believe it is also likely that the Chinese Communists have decided to exploit the troop movements politically by creating a new offshore island crisis. To the Chinese Communists a new crisis may appear useful for several reasons: to exacerbate the visible strains in relations between the U.S. and Nationalist China; to divert attention from domestic economic difficulties and justify stringent measures at home; and to demonstrate that Peiping's power and interests are something the world must reckon with.

3. We cannot rule out the possibility that the Chinese Communists are preparing for a sudden, all-out effort to take either or both Quemoy (Kinmen) and Matsu, perhaps utilizing equipment not available in 1958. However, in the absence of evidence that the Chinese Communists are massing the necessary transport (e.g. motorized junks), we do not think a sudden, all-out attack is either imminent or likely.

II. Implications for the U.S.

This Chinese Communist military buildup opposite Kinmen and Matsu brings to the forefront not only the problem of the offshore islands themselves but also of Chiang Kai-shek's intentions to “counterattack” the mainland. A direct confrontation of the U.S. and Chinese Nationalist interests seems very likely.

If the Chinese Communists attack, the US will be faced with pressure from Chiang, from his friends in Southeast Asia, and from his friends here in the United States to participate in the defense of the islands. A decision will be immediately required on whether or not the attack is a preliminary to an attack on Formosa, as specified in the Formosa Resolution, and Chiang undoubtedly will make public all sorts of “intelligence” designed to show that it is.

If the Chinese Communists do not actually attack, but create a 1958-style politico-military crisis, the situation is only slightly better. Chiang's demands will be urgent, and if support is not forthcoming, they will undoubtedly become both public and strident.

The Chinese Communists have considerable incentive to exacerbate US-Chinese Nationalist relations and can begin at any time. Chiang, on the other hand, has always had among his high priority objectives involvement of the US in reconquest of the mainland. Once the Chinese Communists are in position, he may provoke an attack or in other ways take the initiative to exploit the situation for his own purposes.

Thus the initiative would appear to be with the Chinese, either Communist or Nationalist, once Peiping's troops are fully in position. If preventive or interposing action should be necessary to safeguard US interests, it would appear that such action may be a realistic alternative for only a very limited time.

Tab A attached¹1. Entitled “Kinmen: The Costs of Capture”; not printed. Tab B attachedEntitled “The Situation Viewed from Peiping”; not printed. presents an analysis of political, economic, climatic, and military factors from the standpoint of the Chinese Communists. analyzes the military factors bearing upon Kinmen's vulnerability to invasion and blockade.