US containment in action in Asia: the reconstruction of Japan and US-Japanese relations; support for Jiang Jieshi and policy towards China and Taiwan; the defensive perimeter strategy; support for South Korea; NSC-68
increased regulation of foreign exchange
price controls
a more efficient taxation system
a balanced budget
US strategy towards China was defined in the China White Paper
Acheson was committed to supporting the KMT in Taiwan - but secretly so that the US did not appear as an ‘imperialist menace’
Attempted to justify its withdrawal from direct military support for Jiang Jeshi - this was done in order to not reinforce a Sino - Soviet alliance
USSR tests their own atomic bomb in September 1949
Truman’s ‘loss of China’ - declared independence of China
October 1949 - communist victory did not trigger the review of strategic objectives
→ June 1949 , China’s allegiance to the USSR revealed how China was not isolated from Soviet Support
China White Paper, July 1949
USA take an active stance in South East Asia
→ February 1950 , the USA abandon a quasi neutral approach to the Indo China dispute - recognise the French installed regime and provide direct military support
NSC 68 - triggered by the ‘loss of China’
→ globalisation and militarisation of containment as result of the most populous country in Asia emerging as a communist state