TOP SECRET Formosa 8. It was recently announced that all shipping in Formosa Strait would be subject to air attack by Nationalist aircraft. The Chinese Nationalist Air Force (C.N.A.F.), H.Q., have denied issuing this notice, but point out that under existing orders shipping in China's territorial waters is liable to air attack. 9. We appreciatedø earlier this month that a Communist attempt at invading Formosa early in 1950 is possible. It appears that the Communist Navy is not progressing very fast nor is the Nationalist Navy disintegrating.