893.00B/7–1048: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received July 10—8:30 a. m.]
1260. Embassy wholeheartedly concurs with analysis and observations outlined in Moscow’s 1229, July 2 [1], 1 a. m. [6 p. m.] to Department, [Page 347] repeated Nanking 15. Though action of Yugoslavia will not particularly perturb Chinese Communist rank and file, if indeed it ever comes to their attention, it can hardly help but cause some wonderment among top leadership. If, as has been suggested with some plausibility, there is a schism within the Chinese Communists, or at least potentiality thereof, it should be possible to use the Cominform denunciation of Yugoslavia to assist development of this schism. Certainly this shows possibility of differences of opinion, even violent ones, within Communist parties over major policy questions and that these differences may be susceptible of exploitation.
It is noteworthy that Communist pronouncements during recent months, which have indicated a modification in tactics, have come entirely from prominent Communist leaders within China proper and for most part from leaders within those areas which have now been consolidated into North China Bureau. These pronouncements, which have been reported to Department, have suggested necessity of proceeding with land reform (though this reform is entirely one of land division and makes no mention of collectivization), a relaxation of violence against any except most dangerous opposition elements, need for conciliating middle and even well-to-do peasants, need for conciliating industrial and commercial groups and necessity of uniting all these groups into a common front against Kmt.
This new direction which reverts to doctrine of new democracy is hardly in line of recent Cominform action. Meanwhile there have been no such pronouncements out of Manchuria and such skimpy evidence as is available to us fails to indicate that Manchuria is taking action parallel to that in North China.
Whether this seeming divergence is based on fact or on poor communications remains to be seen. We would, however, be missing an opportunity if we failed through USIS to point out to Chinese Communists implications of Yugoslav situation and warn them of dangers implicit to themselves. Equally important are implications for non-Communist left and liberal groups who out of desperation are driven increasingly to left. It is perhaps indicative of Chinese Communist perplexity that North Shensi radio has so far failed to make any reference to subject.
Sent Department 1260, Department pass Moscow 44.