Created: 7/1/1984

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US-China Relations: Short-Term Prospects I

An InlHli grace AWKwral

Directorate of inteliijtetter

US-China Relations: Short-Term Prospects



Thnait Awn Aoalyitt. Comrri welcome and may be directedhc Chief. China Dtviiion. OP. AM

US-Cnina Relations: Short-Term Protpccts



ai of is 'Mr

. u in "ill rrj**>

since ihe spring3 has begunasic decision io improve relations wuh ibe United States. Chinesearc acutely conscious of China's relative military weakness and absorbed by China's ambitious modernizationto retain the Uniied Statestrategic counterweight to the USSR and gain greater access to US technological and economic resources.

We believe Beijing will subordinate criticism of US policy toward Taiwan and ether bilateral issues at least through ihc end4 in order ioore stable, working relationship with tbe Reagan administration. Beijingourbuild on the positive itmospbcreduring the vims of Premier Zhao and President Reagan and will probably work io prevent US-China relations frcrr. becoming entangled in the US election campaign.

There are limits lo Beijing's ability to expand relations, however. Beijing does not want to undermine its ability to manage ihe Soviet threat through negotiations or to pursue expanded ties with the Third World and touchy associates, such as North Korea, by identifying too closely withAs China does improvemilitarythe United Suies. it will take even greater care to preserve ihe appearance ofin iu foreign

Dunng the next six months, we believe China will gradually attempt io strengthen security ties with the United Slates by:Continuing steps toward ihe purchase of defensive weapon systems.Broadening discussions of strategic issues.

China will continue to pressreater US role in economicthrough increased US investment in Chinese enterprises, greater access to US technology, and an end to alleged US trade "disciimiaation" against China. As the Uniied States and China broaden their economic ties, however. Chinese expectations may exceed ihc ability of tbe United Slates to fulfill them. The Chinese may express their disappointment publicly We expect ihe Chinese io press for US ratification of the Nuclear Cooceratiori Agreement, for instance, and toto Congressional statements doubting Chinese promises on nuclearNonciheleis. we do not believe that the Chinese will risk damage to the overall relationship by pursuing the issue too aggressively.


We believe thai internal Chinese political factors will playinor role in US-China relations in the next six months. Some senior leaders apparently do not share Deng Xiaoping'* enthusiasm for relations with the United Slates, but we have no evidence of significant opposition.

Although Chinese leaden will be cocstraincd by the existing strategic ntuation, the death of Deng Xiaoping would probably leaderiod of less activity in bilateral relation*ew leadership begins to assert



Over the longerundamental shift in international pressure on China or altered domestic political and economic priorities would almost certainly prompt China to review its approach to tbe United Slates. Even so. we believe that, as long as China remains primarily committed to economic modernization and faces an expanding Soviet threat. Beijing's needecurity lie to Washington will remain.

US-China Relations: Short-Term Prospects

ihrce yean of stronely pressing the Reagan administration for concessions on Taiwan and other mailers, Chinese leaden haveasic decision to improve relations wilh the United Stales. Beijing bas electedubordinate criticism of US policy toward Taiwan and Olher divisive issues in the interest ofote stable, workingincluding Improved economic and military lies. For at least the shortthe end ofbelieve tbe Chinese intenduild on the positive atmosphere developed during the last year and will workrevent US-China relaiions from becoming entangled in ihe US election campaign. B|

the app. -ance of "independence" in its fecignWe expect ihe Chineseake further steps toward the purchase of L'S military technology and weaponihe4 visit of Defense Minister Zhang Aiptng and duringvisits by militaryto broaden their discussions of strategic issues with USThe Chinese will almost certainly lakeof the visits of senior US military officials, such as General Vessey, to do so. Beijing probably intends to consult, the US increasingly on mailers of mutual strategicas arms reduction negotiations orsia

has changedourbecause ii feared that further decline in US-China relations would undermine Chinese security andleverage; in Ihe face of the continuing Soviet military buildup. Chinese leaders are well aware of China's relative military weakness and the need for timeomplete military modernization. Theywant to retain the United Statestrategic counterweigh! and to cautiously increase military lies. China's long-term need for US and Western economic and technical assistance provides them with addition-i. incentives tolosci US

Chinese Kxpeclaiiora

During the next six months, we believe China will gradually attempt to strengthen iu security tics with the United States while striving not to cornpromisc

Publicly, we expect that China will underline for Moscow its evolving security cooperation with the United States but will continue to preserve an air of ambiguity about theoider not to precipitate overly hostile Soviet reaction nor tofriends and associates in the Third World and elsewhere' While sending Defense Minister Zhang Aiping to the United States in June, for example. Beijing indicated its intention to send Vice Foreign Minister QUui Qichen lo Moscow for talks and had Premier Zbao publicly express China's support for closer lies with &uropeJJj*j

Chinese leaders have indicated they will continue to urge the United States to provide greater long-term assistance for their ambitious economicprogram. Beijing continues to stress its inierest in increased US investment in Chinese enterprises, greater access to advanced US technology,financing for joint ventures and industrial projects, increased funding from internationalorganizations in which tbe United Statesrominent role, and an end to alleged US trade

lao "innroerve an imace of irtdepcedence in ill lomrBavoid overly clow idealifitaiwn "threnter its return, wilh North Korea, East Europeanwith -lom China ii scekinf doier tie*,mcluAot Romania. Viicaiivia. aad Cast Germany, and the socialist and Communist panic* of Western Europe MM


gajtst Cains. Durini the period in US

bilateral -asm* and

press that Washington bad dowr^raded

Increased Chinese concerns since then about the growing Soviet military and political threat in East Asia have also pushed China closer to the Unitedecent series of PropU's Daily articles, for instance, detailed the bsuldup of the Sovieteei. the strengthening of Soviet forces stationed at Cam Rank Bay. aad the expanding deploy me nt ofnteiincdUle-range missiles in Siberia. *|

I* unusually Brjdeat language, ibc Chinese media teotnUy accused the Soviet Union of supplyingmilitary and ceooornic aid to Vietnam forreasons" and staled that imprecederted Soviet-Vieinamese joint naval exercises in the Tonkin Gulf in March were aimed at encouraging Vietnameseand expansion" against China. MtM

Cbanese -nil probabJ> coc discreetly bw persistently (or US action on. issue* raised daring ibe ftesadentsocb as tcchisology transfer ind ibef some US tradec raped Iseijiae to also seek US appro.-al o! tbe Nuclear Cooperation Agreement, bur. sve belicre that it is prepared to wait rather thanajor political controversy over the issue this year.

Diira's Concern About lis Strategic Portion Chinese leaders dcnrortsiraied COocein in3 thai theu "independent" stance in foreign policy threatened to yeopardiae long-term Chinese security and development interests In thepreceding years, angered by perceived US slights over Taiwan and encouraged by tbe increasingly strong US response to theBeijing bad set in abeyance iu interest in joining the United States in an anti-Soviet "uniiedhinese leaders instead strongly pressed the Uniied States on bilateral disputes, stressed China's fundamental identity with ihc Third World, and revived political consulraiioits wiih the Soviet Union, fkiiing wis in parierceived US need for good retailors *tib China, and Chinese leaders judged that Beijing's newould in cease Irs leverage within tbengle ^

We believe, however, tbat by3 Chinese kedcr* rtalired ihey bad raoxarcolaieil. Talks -ith the Sc-neti had failed to slow tbc pace of the Soviet drive for military and political dominance in East Asia At the same tine. Chinese leaders were met by


The Chinese alsolose, detailed dialogue with the United Slates on Sovieiast Asia and globally. During the President's visit. Chinese leaders pointed to tbe Soviet threat to China as one ol several areas in which US and Chinese strategic inteieatj converge. Following the visit, they attempted publicly to convey the impression that the United States approved Chinese miliury activity against Vietnam. Nonetheless. China continues locniieiie some US actions ia the Third World and Europe that it BeLevea perait toe Soviets to gain advantagesen |

Use Importance of Economicleaden regard closer eccerornrc ties -thSines as vital to -fee rongterm successambitious mocerr.iration program. Asr.dicated last August.

China -antstss to -hai it believes will be ihe world leader in high technologyong time Chinese leaders also attach broader politicalto building stronger economic lies with ihe

United States:

To provide an ursdereVcUng for bilateral rcUtieett Curing times of political stress.

To create leverage within the United States.

To demonstrate tangible benefits from goodwith the United States to skeptics in

Chinese leaders have ceased for now to elevatedisputesevel thai would sourrelations. During the past year, theyto ercphasiM the potential for bilateralrehtiOQS while continuing to press forcoocesncns Minister of Foreign Economicaad Trade Cbea Muhue. for instance,ttews- thai "manyaademain ia bilateralSano tooko emptusiredevcioprneat ol bilateril trade. USChinese industries, and the removal of

bureaucratic iirjpedtnerits to further il eve.y



(trtatmem of 'reamer Zhao'sc* Washington and Presidentpring furtherdefinedChinesgrowingntc'iit Inooperation on parallel straic-gtt mailers In Washington. Zhao told traders of Congress Ihai China could not accept "comprehensive siratepc cooperation' with the United Siaiis buienuine interest in arms purchases from ihe United States. Mi the same lime. Zhao noted the treat strategic importance" of US-China relations and ttrmed good bilateral relations "on irresistible trend of htsiory. '|

In Beijing, despite iheir censorship of ihtemarks on the Soviet Union, the Chineseihe So-met threat to China and points ol

parallel US-China strategic interest. They also tried lo convey an impression of US approval for China 'i escalated military action againstan unprecedented naval exercise in the South ChinaApril and

Belling timed the action to coincide with ihe Mil-dent'sThe Chinese media highlighted an unuiu-at separate meeting between Chinese Defense Minis-let Zhang Atping and military officials in the Prtsidtm'l,

interest in 0

carefully calibrated increase in military liesisit to Washington in June.mmm^

Oesptie basic agreement on strategic issues. Chinese leaders continue to place different

r. mmMmmmmmrKorti tyF the ihtrd

World, and oiher areas. They see the United Staiti overplaying its hand to the ultimate benefit of the LSSR. Chinese leaders now argue, for instance, thai the Untied States should attempt to reach an arms control agreement with the Soviets tn Europe I

On the Third World. Chinesed the lining President af Siger in May thai the Umied Sietei commuted an effective counterweightovieiin .Africa. But the Chinese continue to criticize the United States for its support of "unsmkable aircraft carriers."such as Israel and South Africa, that alienate natural opponenii of the Soviets in ihe Third World -and create opportunities for Soviet meddling. Thty also publicly oppose the handling of US policy In Central America and the Middle Eoii -despite agreement wtih the anti-Soviet ihruit of US policy there

ihe exchange of visits belween Premict Zhao and President Reagan. Beijing's public ireatmeni of US-Taiwan policy has changed markedly. Recent authoritative mcdu commentary has not empQasiaed past demands, ifcrtais. or sharp aeeiasaiioro that the Uassasafl*ot themiT.-ii

iirrieilaTc^Siclv accepted US elairm thai the United States is reducing arms sales to Taiwan and have urged thai ihc pace of reduction be

USious issue

Taiwan icmaim ihe meat cornea- |

public treatment of US policy toward Taiwan Ian year was bead with accuniiora that the Laiied Statescase-Chios. one-Taiwan'* pobcy and continued to nolatc the2 joint cr>mmuiiQue. Chinese commentary during tha period, however, also included calls Tor strengthening "mutual trust" and improving reunions.

Meanwhile Beijing has launched an invigorated effort to convinceoverseasIts reunificationre reasonable. While in ihe United States, Premier Zhao appealed to Chinese-American audiences in San Francisco and New York to accept Beijmi'i efforts toward Taiwan. Bering has publicly urgednot to "interfere" in tbc process (through stepped-up arms sales, for rsample) though it has not pressed for US suj

Ibitil III

mini It)

Causes* Donmik Pottrks

We tebeve Ihai. Chinese poiiueal faciors willelau.eiy snail rote il US-China rtlatxwj over the course of the Kitmonth: Scene's decinoaelations with ihe Uniteduedelieve, on iu assessment of Chinas Mraif[ic and dmlopmcai needs. Unlike domestic policy.ore tjn potior is fonnuUwdmaJ group of senior leadenot usually debated beyond the Politburo. China's current policy toward the United Slates reflects ihe views of Dengdominant leader and primary strategic thinker. Mom other leader* appear to support it. though (here may be some disagreement over the pace o( developmenthe rclatiortshi

inflame ongoing btiatealeoplt'i Daily commentary during the height of the spiritual pollu-"on campaign !ast fall, for instance, contained some stndcnt ami-American overtones- The amiforcign eic mem of the campaign was short lived and was thoioughly discredited by the leadership, however. Although Hu Yiobang's remarks threatening the cancellation of Premier Znao's trip to the United Stairs were made at ibe height of the campai

The strongest supporters of relationsihe Unitedth Use exception of Deng himself, aremou prominently by Premier Zhao and those mosi deepfy iswohed ic tbef China'a aoderniuooa program. Sensors of the Amy's General Staff Depanment and Defense Minister Zhang Aiptoi also appear io be strong supporters of improved us-China relations, especially the strategic and defense elements. In fact, on the eve of therip to China. Zhang publicly identified himself wuh emerging us-China defensewhich he dated to the visit of Secretary of Defense Weinberger |

Party General Secretary Hu Yaoenng has not cleaityiediews on rdatioas with the United Stales and probably is still content to folio- Deng's lead oo ( policy Hu is to- becoming personally identifiedChina's strategic opening to the Wage, especially Japan, however, and is beginningreater rote in relations. Although Ha has expressed some ambivalence about the United Slates in the past and was Use duet articulator of China's "independent'* foreign policy line, he has increasingly lent ha support to :bc urates* aspects of bilateral

technology IH

political arguments, however, cocld afTect ibe iooc cf Chinese foreign policy statensenu or

The occasional opposition of some senior Army and partyleaders, like Chen Yun, lo relation, with the United Slates stems primarily from their concern with the byproducts of the opening to (he West. These leaders worry about the infatuation of Chinese youth with Western ideas and material goods and tbe consequeni deleterious impact on public order and revolutionary puniy. Some of them, such as Politburo member Wei GaoQinj. nave lost keyfrom whieo tbey could bare rallied support agamn the open-doorowever J

Continuing Irritants

We beheve that China will carefully nunure the posiiive momentum in US-China relations for the rest of this year and will take special care to preserve ihe strategic bests of ill relations with ihe United States. Chinese leaders wtll try to confine unanticipated disputes over bilateral issues and to deal with themay tbat -ill sot sour relauonsaok None the less, thereonnet but low-level chance thai accumulated frsction ewer US policy oa such sensitive issues as Taiwan. Chinese nuclear proliferation policy.

i Korea could raise bilateral tensions substantially.

Chinese leaders appear to be concerned that the Korean Peninsula could become an issue in US-China tsilateral realtors as wed

' Chinese art

especially concerned that North Korean leader Kim

could strike agreements with the Sovietsto greater Soviet involvement on theand more intense pressures on the Chinese to woo the Nonh. In this case. China would probably feeltoore publicly anti-US pesiiioe. on Korea, including sironier calls for withdrawal of US troops from South Korea or greater istsnaence that ihe Uniied Siatesripartite talks on Korean reunifK

Chinese appear to have had high expectations that ihe Uniied Stales would soon ratify ihe Nuclear Ccwperaiidn Agreement thai was Initialed in Beijing last May. Nonetheless. China remains very sensitive aboutthe media or beforethat it may have transferred nuclear icchnologies to other countries Should the admin isiration be buffeted by suong Ccogressaonal or other criticism ofndear tsrceiferaiioa policy. China may reactWe believe, however, chat Chinese leaders win wantimit damage done by debate over China's nuclearthey may express theirover ii io US officials privately or through public statcmenu.H

Other possible economic irritants include

Teehnolofy Transfer: The Chinese are pressing ihe United Stales to remove China from COCOM resirtcttorts, or.inimum, to remove aciditioittl COCOM festnetions from sensitive. USfiber optics communication lechnol-og) China hopes toelecommunications Protocol with the United States in the fall that incorporates some of ibese wishes, If thai effort fails. Bei.iing probably will moderately protest USto accommodate Chinese interests

Ttailet: The Chinese arc pressing the Onited States to allow greater imports of textiles and have expressed resentment of the administration's "un. reasonable* restrictions If restrictions on Chinese teatiles go up markedly ibts rear, China would certainly protestprobably altoow level

Although Deng Xiaoping appears to be in good health, his death could alsoignificant impact on US-China relations in the near term. If Deng Xiaoping dies within the neat six months, an interim leadership- probably led by Patty General Secretary Humost likely be absorbed by efforts toew leadership and would not beosition to implement initiatives in foreignAliew leadershipcontinue to be bound by the existing strategic imperatives, it might feel constrained toore nationalistic posture or to place greater stress cm China's foreign policy "independence. 'mmW*

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