The 1946 UKUSA Agreement between the US and Britain, which later expanded to include Australia, Canada and New Zealand – consequently earning the moniker ‘Five-Eyes’ – provided for extensive liaison on sigint specifically. Close relations also existed between humint and military agencies, and between the CIA and Britain's Joint Intelligence Committee (JIC) on the exchange of intelligence assessments. By and large, these relationships existed separately from the political whims of those in charge of the White House or Downing Street, but during the Korean War, political differences had a direct effect on the quality and quantity of intelligence material shared across the Atlantic.

The problem was China. Since the 1930s there had raged a civil war fought by the nationalists, supported by the US, and the communists, propped up by the Soviet Union. As the late 1940s wore on the civil war continued, and it became increasingly clear that the tide was turning towards the communists and their leader, Mao Zedong. In late 1948 the State Department confirmed to the British that the US would maintain a presence in China whichever way the civil war was won – but within six months, that position was being reversed as the communists stood on the brink of victory. In August 1949 this change of position was clear, for as the British Foreign Secretary, Ernest Bevin, informed his Cabinet colleagues, the decision had now been taken that all US government nationals would be withdrawn from China. Bevin succinctly summed up the situation: ‘[W]e are faced with the dilemma that unless we can persuade the United States authorities to agree with us we must either agree to differ and pursue our own policy of keeping a foot in the door, or abandon the whole of our interests in China in order to follow in the American wake.’

The divergence in opinion between Washington and London was based on different factors. For President Truman, one of the key issues was not to declare the civil war over and therefore not signal that it had been a communist success, the objective being to protect major allies and assets – particularly Japan, the largest and most significant American interest in the region. This was an early test of the logic that would become known as the domino theory a few years later.