Category Archives: China

In Taiwan I had to get used to the unusual situation of conducting diplomacy in a country with which America wasn’t supposed to have diplomatic relations. To wit, at AIT [American Institute in Taiwan] we were officially consultants under contract to the State Department working in an unofficial capacity at a nonembassy to advance America’s interests in Taiwan. It was a mouthful, and the semantics and diplomatic gyrations that American representatives in Taiwan had to go through were at times humorous, at times frustrating.

Starting with the mundane, we had to develop a new vocabulary to conduct diplomacy. The embassy became an institute in 1979, and I was its second director, following veteran diplomat and fellow China hand Chuck Cross. At the institute, there were no American flags flying, no national days celebrated, nor Marines in red, white, and blue. Instead of a political section, we had a general affairs section or GAS, perhaps an appropriate acronym for political reporting. Rather than a consular section, there was a travel service section. In our daily lives, we had to be careful to adhere to certain rules. If I were addressed by a Taiwanese journalist as ambassador, I had to ignore him. If at some function or performance we were seated in the special section reserved for diplomats, we had to suggest that this was not quite right. Most of the time we ended up sitting there anyway. Should the agressive Taiwanese press have caught wind of any protocol slipup on our part and used it to trumpet recognition of an upgrading of the relationship, we would have caught hell from both Washington and Peking.

The most frustrating part was that we were prohibited from meeting with Taiwanese Foreign Ministry and Defense officials as well as with the president himself in their offices, nor could they visit us in ours. We could meet with a designated group of Taiwanese foreign service officers who staffed AIT’s counterpart organization on the Taiwan side. But we had to transact the majority of our discussions in other venues, like restaurants, country clubs, golf courses, and private homes. Perhaps the most serious casualty of such restrictions was our waistlines. Dinners and cocktail parties–the staple of most diplomatic posts–took on added importance in Taiwan. A rich Chinese diet can wreak havoc with an American-fed body, as it did with mine.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2004), pp. 238-239

On the business front, the trip with [George H.W.] Bush [in 1977] was more of a success. Hugh Liedtke, the chairman of Pennzoil, met with Minister of Foreign Trade Li Qiang, and during a meeting with Deng Xiaoping at which Bush and I were present, Bush made significant headway in persuading Vice Premier Deng to allow American oil companies to work in China. At that point in 1977, Deng, who had been restored to his posts earlier in the year with the help of powerful backing in the military, was about a year away from introducing his initial plans for economic reform in China. An old oil man himself; Bush “sold” Deng on the concept of a “risk contract” in which U.S. companies would assume the significant costs of exploration for oil in places like the South China Sea and then share the proceeds from production if oil were discovered. Deng liked the idea because it would allow China to bring into the country free of charge the technology and capital needed to exploit oil resources and then still share in the profits. Deng also knew that his own oil people had oversold him on their capabilities, leaving China with semi-submersible rigs that no one knew how to use and jack-up rigs that had turned over in the Gulf of Bo Hai in northeast China. The concept of “risk contracts” became the basis for joint ventures in oil exploration between the United States and China.

Bush’s meeting with Deng built on the acquaintance they had formed during his posting in China and laid the foundation for future meetings, including two more in the next three years that I would also be privileged to attend. In spite of their diminished political statures in 1977–Bush being out of power and Deng having just returned to his government posts from being temporarily purged–I believe that Bush and Deng sized each other up as future leaders. Just as former President Nixon and Henry Kissinger had forged personal ties with Deng’s predecessors, Mao and Chou En-lai, Bush was developing a relationship with Deng that eventually became critical in sustaining U.S.-China ties in troubled times and advancing them in better times. When the two men ascended to the tops of their respective governments, their personal connection facilitated a blending of American and Chinese interests into a workable formula. This congeniality of leaders at the highest levels is, I believe, one of the keys to managing the Sino-American relationship.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2004), pp. 203-204

Maybe not just the Sino-American relationship.

One of my biggest operations involved ensuring a “favorable” outcome in the elections to the National Assembly in 1967. With more attention being focused on the war in Southeast Asia and with the National Assembly in Laos starting to play a larger political role in the country, we thought it was important for Vang Pao to have more of a say in the political governing of the country. We figured out whom to support without letting our fingerprints show. As part of our “nation building” effort in Laos, we pumped a relatively large amount of money to politicians who would listen to our advice. In the election, “friendly” politicians won fifty-four of fifty-seven seats. Ambassador Sullivan referred to me as Mr. Tammany Hall, an allusion to New York City’s prodigious Democratic vote-getting machine of the late nineteenth century.

With the CIA’s mission expanding so rapidly, our intelligence gathering and reporting efforts boomed. As CIA personnel, we had better access to parts of Laos than our State Department colleagues. In fact, few Foreign Service officers were even allowed to visit places like Long Tieng. The major exception was Ambassador Sullivan, who oversaw the whole military effort in Laos. But other than him, during my time in Laos, only a handful of State Department personnel made it up to Long Tieng. Sometimes, we were in the awkward position of “outreporting” our State Department colleagues in the embassy, who were supposed to be the experts in designated fields such as the Lao economy, politics, and culture. In some cases, their best sources for information turned out to be our paid agents. We had to be discreet in handling such touchy situations. Since I had worked with many of the Foreign Service officers at other posts in Asia, I was given the job of smoothing ruffled feathers. Sometimes I succeeded. Sometimes I failed.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2004), p. 120

Hong Kong was the best listening post into “Red China.” It was, as the long-distance telephone ad used to say, “The next best thing to being there.” The island-colony was roiling with action in 1953. Unlike on Taiwan, there were many trade and transportation links to the mainland, and because of its location, Hong Kong was a crossroads for Chinese of all stripes. It was a base for agents from China and Taiwan and, therefore, served as one of the few places where the two sides could rub elbows, and, if the situation called for it, pass on communications to each other’s governments. Wealthy capitalists from Shanghai sought refuge in Hong Kong after the Communist revolution and spent much of their time trying to find a way off the island. Furthermore, refugees were streaming in from the mainland. Since 1949, more than one million Chinese had arrived in the city and its surrounding territories. There were an estimated 300,000 squatters in Hong Kong and its territories. Most of the refugees, the majority of whom were farmers and laborers from southern China, came in search of work and a better livelihood. Amazingly, with its improving economy and free enterprise methods, Hong Kong was able to accommodate most of them….

I started out working with the Pao Mi Chu, Taiwan’s intelligence apparatus. I worked under “deep cover,” meaning that I kept my true identity a secret from the Chinese people with whom I worked. I used aliases when I contacted agents or met with counterparts in Taiwan intelligence. The one I used most often was “John Wright.” I would meet with agents in hotel rooms or in safe houses, apartments that had been scouted beforehand to make sure they were not under surveillance by the Communists’ huge underground apparatus in Hong Kong. We debriefed refugees and travelers to China, placed agents on ships going to Chinese ports, and helped establish a base in Macao to take advantage of the flow of Chinese between Macao and the mainland….

In the course of my work, I was learning that we could accomplish far more by debriefing travelers or people returning from China than we could by planting frightened resident agents in the country. The resident agents naturally tended to be fearful of getting caught. Travelers, on the other hand, moved more freely and without that fear. Using debriefings, I started to gather useful information for the CIA about what was going on in China. Unfortunately, in those days CIA was obsessed with the idea of a resident agent with a radio no matter what the level of his access or his ability to survive. They focused on process over substance.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (Public Affairs, 2004), pp. 84-86

By the 1950s, Yale had a long association with U.S. government intelligence collection. After all, Nathan Hale (“I regret that I have but one life to give for my country.”) was Yale’s first unsuccessful spy. Because of their high intelligence caliber and language abilities, Yale graduates were considered attractive candidates for intelligence work. Yale had played a part in the formation in 1942 of the Office of Strategic Services (OSS), which was created to carry out intelligence gathering and paramilitary operations against Germany and Japan. From Yale’s class of 1943 alone, … at least forty-two young men had entered intelligence work, with most going to the OSS. Many of these men stayed on after the war and helped form the core of the new Central Intelligence Agency, which took over the duties of the OSS in 1947.

The connection between Yale and the new CIA started at the top. Yale’s president for most of the time I was there, Charles Seymour, was on close terms with Allen Dulles, a top OSS official in World War II and after 1953 the head of the CIA. Seymour’s daughter actually worked for the OSS in Europe during the war. During my time at Yale, recruiters on campus for the CIA included the varsity crew coach as well as eminent professors.

One of those professors invited me to see him on a fall day in 1950. He ushered me to sit down in his dark, wood-paneled study. It was late afternoon, and the room was in shadows. The walls of the study were lined with leather-backed volumes on Renaissance history, the Chinese classics, and English literature. The professor smoked a pipe. Between puffs, he made his pitch. Even though I barely knew who he was, he clearly knew of me and what I had been doing at Yale. “You were born in China. Your family saw the collapse of China,” he started out. “And here at Yale you are a Russian major?” he asked quizzically. He tried to dissuade me from a career in the diplomatic service or corporate world by mentioning that I hadn’t taken any business or accounting courses at Yale. The State Department, he told me, was stuck in cement. “Look at what you are interested in and consider intelligence. It’s a growth industry.” He then talked about the crucial role intelligence had played in past wars and the exciting nature of the work. He explained that people were needed who had been exposed to foreign environments. I was sold even before he got to my personal qualities. “Besides,” he added, “You are a leader. As captain, you turned the soccer team around.”

Like so many of my fellow students at Yale, including an English major and wrestler from Wallingford, Connecticut, named Jack Downey and a sophomore from South Bend, Indiana, named George Witwer, I was excited by the prospect of an adventurous career and by the idea that I could contribute to efforts to stem the tide of communism. It was a good cause, and I believed that the United States and its values were worth fighting for. In the foreword of that same 1951 classbook in which Peter Braestrup gave voice to ambivalence on campus was a chilling sentence: “We face the realization that the very civilization we have trained ourselves to foster has been placed on the verge of destruction. The challenge to each of us as individuals cannot be over- emphasized.” I quickly signed up for the CIA. So did about a hundred of my classmates.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2004), pp. 69-71

Within this early occupation period [from September 1945], MacArthur’s “military secretary” and former head of psychological warfare operations, Brig. Gen. Bonner F. Fellers, reestablished personal ties with two Japanese Quakers. One, Isshiki (Watanabe) Yuri, he had known from his days at Earlham College in Richmond, Indiana; the other, Kawai Michi, a former secretary-general of the YWCA and founder in 1929 of Keisen Girls School in Tokyo, he had met on his first visit to Japan in 1920. During their initial reunion meetings, Fellers spoke frankly of his urgent concern to prove that no grounds existed for holding the emperor responsible for the Pearl Harbor attack. With Kawai acting as his consultant and collaborator, Fellers was soon put into contact with her acquaintance, Sekiya Teizaburô, the high palace official who, since late Taishô, had played a leading role as a liaison between the court and government ministries. Sekiya too wanted to prove that the emperor was a “lover of peace.”

An entirely new, binational stage in the movement to protect Hirohito now began. Out of the interplay of efforts by GHQ, the emperor, Japanese government leaders, and Japanese Christians with prewar ties to influential Americans, came the shielding of Hirohito from war responsibility, his “humanization,” and the reform of the imperial house. Henceforth, in the process of utilizing Hirohito’s authority for their own respective purposes, MacArthur and the Japanese leadership would have to misrepresent a vital side of Hirohito’s life and identity, just as they [had] been misrepresented before the war….

Between April and July 1945, MacArthur and Fellers had worked out their own approach to occupying and reforming Japan. In their view the principles of psychological warfare that Fellers had implemented in the Battle of the Philippines and elsewhere were solidly correct. They had played a key role in lowering Japanese morale, hastening surrender, and preparing the Japanese for occupation. Japanese military leaders alone bore responsibility for the war, and the emperor, the “moderates” around the throne, and the people had been totally deceived by them. All Japanese trusted the emperor. U.S. psychological warfare should build on their trust and turn it against them. These ideas, the “common sense” of American psychological warfare experts in the Pacific, not to mention Chinese and Japanese Communist leaders in North China, had become MacArthur’s fixed principles and were woven into his initial occupation plan.

Code-named Operation Blacklist, the plan turned on separating Hirohito from the militarists, retaining him as a constitutional monarch but only as a figurehead, and using him to bring about a great spiritual transformation of the Japanese people. Because retaining the emperor was crucial to ensuring control over the population, the occupation forces aimed to immunize him from war responsibility, never debase him or demean his authority, and at the same time make maximum use of existing Japanese government organizations. MacArthur, in short, formulated no new policy toward the emperor; he merely continued the one in effect during the last year of the Pacific war, then drew out its implications as circumstances changed.

SOURCE: Hirohito and the Making of Modern Japan, by Herbert P. Bix (HarperCollins, 2000), pp. 542-545

In his chapter entitled “Delayed Surrender” Bix identifies three major blown opportunities when Hirohito and his Supreme War Leadership Council “could have looked reality in the face and acted decisively to sue for peace”:

(1) February 1945, when Japan’s tentative negotiators determined that “the Soviet Union would not hesitate to intervene militarily in the Far East once the situation turned favorable in Europe” (despite its earlier Neutrality Treaty with Japan)

(2) Early June 1945, “when the showdown Battle of Okinawa had been lost, when government analyses indicated that the war effort could soon continue no longer, and when General Umezu unveiled for the emperor the bleak results of his personal survey of the situation in China”

(3) Late July 1945:

Their third missed opportunity was July 27-28, when the Potsdam Declaration arrived and the Suzuki cabinet, after careful deliberation, twice publicly rejected it. At the time no member of the “peace faction” came forward with a proposal for accepting the Potsdam terms. Pinning their hopes on Konoe’s not-yet-arranged mission to Moscow, the emperor and Kido [lord keeper of the privy seal, his closest advisor] waited and waited for a response from Moscow–a response that Ambassador Satô and others repeatedly stated would never come. Only after Hiroshima had been bombed did the emperor say, “We must bow to the inevitable;” now “is a good chance to end the war.” More than ten thousand Japanese people died from conventional air raids during this eleven-day interval.

The Japanese “peace” overtures to the Soviets, which had followed Germany’s capitulation, were vague, feeble, and counterproductive. They certainly never constituted a serious attempt to negotiate an end to the war. The thinking behind those maneuvers never progressed beyond decisions reached by the inner cabinet in mid-May 1945. As Konoe rightly suspected it would, the emperor’s attempt to end the war via Moscow turned out to be a complete waste of time, and amounted to an imperial decision to postpone facing reality.

SOURCE: Hirohito and the Making of Modern Japan, by Herbert P. Bix (HarperCollins, 2000), pp. 521-522

Did the U.S. also miss an opportunity by continuing to insist on unconditional surrender? Here’s what Bix has to say (p. 518).

If the conservative [former ambassador to Japan] Joseph C. Grew and the “Japan crowd” had gotten their way and the principle of unconditional surrender had been modified in advance, it is highly unlikely that Japan’s postsurrender leaders, now the “moderates” around the throne, would ever have discarded the Meiji constitution and democratized their political institutions. Grew and those who took his position had very little understanding of the Japanese body politic, no faith in the capacity for democracy of ordinary Japanese people, and certainly no desire whatsoever to see the social foundations of the monarchy dismantled.