The Chicago Daily News published June 19 this report by Robert Crabbe from Taipei:
"While carrying out a well-publicized reconciliation with the Communist government of (Red) China in Peking, President Nixon quietly has opened the door to a torrent of American investment and loans on Taiwan, the island base of the rival government headed by President Chiang Kai-shek.
"American businessmen are being encouraged by Washington to set up shop on Taiwan. The unspoken premise seems to be that the 13,886-square-mile-island (the size of Massachusetts and Connecticut combined) will remain outside of communist rule for the long-term future.
"The huge upsurge of American trade, loans and investment comes despite the fact that reunification of Taiwan and (mainland) China is a permanent goal of Peking's foreign policy. Nixon said the United States had 'no quarrel' with reunification provided it was the wish of the Chinese on Taiwan and those on the mainland.
"However, it is obvious Washington does not expect this to happen soon. Taiwan is ruled by a relentlessly anti-communist government. If American warships no longer patrol the Taiwan Straits, separating it from the Chinese mainland, the U.S. Seventh fleet still is never far away. Mr. Nixon also has said that American defense commitments to the nationalists will be honored.
"The growth of recent American involvement in Taiwan is spectacular. At the end of 1971 the U.S. government's export-import bank had about US$500 million in loan Commitments to Taiwan. At the end of 1972, the figure was up to $1 billion.
"The book value of American investment on Taiwan had reached somewhere between $350 and $400 million by the end of 1972, overhauling Hong Kong as a site for American venture capital.
"Last October, U.S. Ambassador Walter P. McConaughy was predicting that two-way trade between the United States and Taiwan would double and exceed $4 billion by 1976. Now McConaughy has upgraded his forecast to $6 billion by 1976.
"Six American banks now have commercial branches in Taipei. Approval of a seventh is expected at any time.
"Several of the banks have set up trust companies in joint ventures with Chinese capital to get into the field of making long-term loans to businesses and industries on the semi-tropical island.
"Actually, Americans started doing business to Chinese rule at the end of World War II.
"What is significant now is the increasing volume of the American commitment.
"The big American industrial arrivals started about 1964. American electronics companies, under fierce pressure from Japanese competitors, flocked in to get the benefits of Taiwan's competent, low-cost labor.
"The thrust of the new American investor is to make things in Taiwan, partly for sale on the local market but mostly for export to Southeast Asia in the post-Vietnam era.
"Taiwan appears headed in the 1970s for explosive economic growth similar to that of Japan in the '60s. Gross national product went from $4.2 billion in 1970 to about $7.2 billion last year, according to U.S. embassy statistics.
"As the build-up continues, Taiwan will be an increasingly attractive market. It will absorb 26,000 motor vehicles this year, compared to 19,000 in 1972.
"The United States also will be deeply involved in supplying machinery to purely Chinese companies for the industrial build-up on Taiwan. Much of the machinery for the China Petroleum Co.'s $600 million petrochemical complex at Kaohsiung City, on the southern part of the island, is coming from America.
"American loans also will help underwrite the development of nuclear generating plants that will add three billion kilowatt hours to Taiwan's generating capacity by the end of the 1970s.
"Without underestimating Peking's importance to the United States, Taiwan seems certain to loom larger to the American businessman than the (Red) Chinese mainland for many years to come." (Full text)
Chicago Daily News - 100 years behind
The Chicago Daily News published on the same day this report by Keyes Beech in Hongkong:
"U.S. exports to (Red) China will hit a record $350 million this year, according to U.S. official estimates, and that figure could double if (Red) China turns to America for grain.
"The driving force behind (Red) China's expanding trade with the capitalist West and Japan is to lay an industrial base that will enable that ancient country to join the 20th Century.
"In this respect, (Red) China is roughly 100 years behind its upstart island neighbor, Japan. (Red) China can produce hydrogen bombs and supersonic jet fighters. But on the farms, where 80 per cent of the people live, some things haven't changed since Christ was born.
"Agriculture sets the pace of the (Red) Chinese economy. And the prospect of a second poor crop year because of bad weather may force Communist economic planners to divert more of their precious foreign exchange to the purchase of foreign wheat.
"If this year's crops are as bad as some experts think they will be, (Red) China may have to purchase as much as $300 million in wheat from the United States - if it's available.
"This may put a crimp in (Red) China's plans for the purchase of Western technology and expansion of heavy industry. Already, there are signs that it has done just that.
"Since (Red) China is chronically short of cash and there is little room for expansion of its traditional exports - mainly foodstuff and textiles - the (Red) Chinese have had to 'redefine' their policy of self-reliance.
"The emphasis still is on self-reliance, party officials say, but that doesn't mean (Red) China doesn't need foreign assistance in the form of credits. For example, (Red) China has contracted for the purchase of 10 Boeing 707 jetliners for $125 million.
"But they are paying for each Boeing on delivery.
"If they have compromised their self-reliance, the (Red) Chinese are doing it on their own terms. Instead of credit, they prefer the term 'deferred payments,' which amounts to buying on the installment plan. Interest charges do not appear as a separate item but are included in the deferred-payment package.
"To guard their economic independence against foreign encroachment - memories of how the Western powers carved China into economic spheres still are vivid - the (Red) Chinese have avoided government-to-government loans.
"Instead, they prefer to do business with private companies, although their purchases may be financed by government loans to the exporter, as is the case with Japan. At the same time, they bargain to keep interest rate down to a level that only a government could afford." (Partial text)
Newsweek - Room for confidence
The Newsweek Asian edition published July 2 this report from Taipei by Sydney Liu: "For a country that was supposed to wither away once it was deserted by its friends, Taiwan is astonishingly active these days.
"At the heart of this optimism is Taiwan's booming economy. While Peking has been busily opening embassies around the globe, Taiwan has discovered that prosperity knows no diplomatic barriers - and that its business men are still welcome even where Taiwan's diplomats are now barred. And when it comes to trade, neither Peking's diplomatic glamour nor its size appears to pose a threat to Taiwan. 'We won't ever need to get into a trade war with Peking,' exults one Taiwanese economist. 'Peking simply cannot produce the goods that we can.'
"As far as trade is concerned, (Red) China does indeed play the role of Taiwan's poor country cousin. Peking's foreign trade last year totaled only $5.7 billion - and most of its exports consisted of the agricultural products and raw materials characteristic of an underdeveloped nation. By comparison, Taiwan, with a population one-fiftieth that of the mainland, boasted $6 billion in foreign trade - and most of its exports were industrial.
"To achieve such rapid growth, Taiwan has had to make a virtue of necessity. Last year when Japan announced that it intended to recognize Peking but continue to trade with Taiwan, the Nationalists were clearly skeptical. 'After Tanaka's betrayal,' says an influential Taiwanese, 'we had great fears about future trade with Japan. But now we realize those fears were groundless.' In fact, trade with Japan has snapped back so strongly that the Taiwanese have launched a major campaign to prevent the Japanese from completely dominating their economy.
"Not surprisingly, Mao's government has reacted vigorously to Taiwan's economic surge. Peking managed to force the cancellation of a Taiwanese trade exhibition in Vienna last May. And in recent weeks, Peking has attempted to pressure the Japanese Government into denying Taiwan's China Airlines landing rights in Tokyo and Osaka. So far, however, this campaign has failed - largely because the Taiwanese have warned that if Tokyo gives in to these strong-arm tactics, Japan Air Lines planes will be banned from flying into or over Taiwan.
"In the final analysis, however, Taiwan's rulers realize that the strength of Taiwan's economy is the most effective weapon they have in their fight for survival. 'For us it is a question of trade or die,' admits one diplomat. 'We must replace diplomacy with trade.' And thus far, Taiwan appears to be doing just that with extraordinary success." (Partial text)
Congressional Record - Peiping and narcotics
Philip M. Crane of Illinois spoke June 12 in the House of Representatives as follows: "There is mounting evidence pointing to the involvement of Communist China in the production and sale of narcotic drugs.
"Recently, the Senate Internal Security Subcommittee held a series of hearings concerning the worldwide narcotics traffic. Among those testifying was former Assistant Commandant of the U.S. Marine Corps, Gen. Lewis Walt. Walt gathered his information for the subcommittee when he visited 15 courtiers during the spring of 1972.
"He testified that there is strong circumstantial evidence leading to the conclusion that Communist China is deeply involved in the production and distribution of narcotics.
"The director of British customs in Hong Kong told General Walt that he was looking for evidence of Communist China shipment of narcotics but, for political reasons, no searches are made of ships or cargo coming out of Communist China. What this adds up to, says Walt, is that:
"'We have no way of knowing whether illicit opiates are coming out of (Red) China...(Red) China's ability to move contraband through Hong Kong and Macao - if she is disposed to do so - is further enhanced by the fact that a large number of ships of Hong Kong registry are operated by companies known to be controlled by the Peking government.'
"In addition, reports General Walt, increasing numbers of Chinese seamen, many of them based in Hong Kong, are being apprehended in the United States and Britain with quantities of heroin. In the case of the Hong Kong seamen, Walt points out:
"'Virtually all of them are members of the Hong Kong Seamen's Union, which is completely controlled by pro-Peking Communists.'
"Communist China, it must be remembered, has not signed the 1961 single conventions on drugs. Consequently, it does not report to the U.N. on its licit opium agriculture, nor does it accept inspection of any kind, nor does it participate in any international drug control operations.
"Recently the New York Daily News published an important series of articles by reporters Frank Faso and Paul Meskil concerning Communist China's involvement in narcotics.
"These reporters revealed a Red Chinese heroin business which flourishes amid espionage, murder, and 'protection' by the Chinese Communist Army and Navy. In one instance, heroin profits were to go to a Maoist youth organization in Seattle. The heroin, they note, is being brought in by ship jumpers, some of whom had what they thought were secret meetings with Communist Chinese personnel at the United Nations.
"Reporters Faso and Meskil find it difficult to understand the silence of official Washington concerning Communist China's role in the narcotics traffic. They write that.
"'The Nixon Administration insists that Peking is not sending drugs or spies to the U.S. But agents of the F.B.I., C.I.A., Immigration and Naturalization Services, Bureau of Narcotics and Dangerous Drugs and other federal agencies are still trying to find out what all those ship-jumping seamen are up to.'" (Partial text)