< PELEA.5E
81
*1
national intelligence estimate
CENTRAL INTELLIGENCE AGENCY DISSEMINATION NOTICE
L This estimate was disseminated by the Central Intelligence Agency. This copy Ls for the Information and use of the recipient and of persons under his jurlsctictioneed to know basis. Additional essential dissemination may be authorized by the following officials within their respective departments.
.atDirector of Intelligence and Research, for the Department of State
Chief of Staff for Intelligence, Department ot the Army
Chief of Naval Operationsor the Department
of Intelligence, USAF, for the Department of the Airfor Intelligence, Jomt Stafl, for The Jomt SUiff
f. Director ot Intelligence, ARC, for the Atomic Energy Coinuusslon "j A$sista^^
W'-'i h. Aflslstarit to tho Secretary, of Defense, Special Operations, for the Department
. y ' "
Director of NSA for the National security Agency
.Director foe Central Reference, CIA, for any other Department or
-Tua^esuirnay be retained, or destroyed by burning In accordance with applicablee Central Intelligence Agency by arrangement srilfa the Office of CcntraiiTWaa^rice. CIA.
hen an estimate is dlssemlna^cvU^erseas, tbe overseas recipients may retain iteriod not in excess of one year. AttrTe^aBarj^rrfthis period, the estimate should either be destroyed, returned to the forwarding agencyiTfraayrnUsion should behe forwarding agency to retain It in accordance with
: he title of this estimate when used separately from the text snriuTfl-sae^dass^ FOR OFF1CJ
WAJHTtsfcT. This material contains rafonperflon aftectlng the national-defense of-jrTe United States within tbe raearjjng ortne espionage laws,SC,, tbeor revjjtarflonh in any manner to an unauthorized personTS-sirphlblled by law.
DISTRT DUTION: White Rouse
National Security Council apartment of State Department of Defense Atomic Energy Commission Federal Bureau of Investigation
COMMUNIST CHINA1
THE PROBLEM
To estimate the position of Communist Chinaorld powerears from now. in the light of its probable political, economic, scientific, and military strengths and weaknesses.
NOTE
estimate is based on what nowto be the most probable course of the important factors likely to affectChina's industrial, scientific, and military growth over this period.factors are the race between food production and population growth, and the Sino-Soviet dispute. Since these and many other factors could developumber of different ways, our judgments are necessarily tentative, particularly in view of the dearth of information onconditions and the degree of thedisruption of Peiping's long-range plans.contingency" section considers the effect of unanticipatedin the primary factors ofand Sino-Soviet relations. For both the main estimate and theit has been assumed that neither general war nor major international war in the Far East has occurred.
1 mainland China will probably continue to be under the controluthless, determined, and unifiedleadership which remainshostile to the US. Communist China's position as one of the major power centers of the world will have been greatly strengthened. Communist China will probably have moreillion people and will continue to have the world's largest standing army andreserve. It is likely to be among the top three nations in the production of coal, steel, and electric power. (Paras.)
1 the Chinese Communists are likely toodest stockpile ofproduced nuclear weapons. They will be producing short-range andmedium-range missiles, and it may be that they willubmarine-launched missile capability. The possi-
billty cannot be excluded that they can produce an operalional intercontinental ballistic missile system withwarheads"
t the same time its people willto subsistarely adequate diet in good years, suffering shortages in bad years. Although impressive advances will have been made in science andthe quality, diversity, and tech-
stimates of Communist China's missile and nuclear capabilities1 are preliminary and tentative, subject to revision after Intensive analysis In the forthcoming. "ChineseAdvanced Weapon* Capabilities.-
projecliona in this pnroirraph, assumeSoviel cooperation ul somewhere near the present level. The contingenciesarkedor decrease in Soviet coopcraUon arein paragraphs
nologlcal level of production still will be considerably below that of Japan, the USSR, and the Industrial nations of the West. )
s Communist China's strength grows, relations with the USSR will become an increasingly difficult problem.China will become even lessin taking political or militaryindependent of the USSR It is likely, however, that their commonto the Communist cause, and, especially, their common enmity toward the anti-Communist world will preserve sufficient unity to enable Moscow andto act in concert against the West, especially in times of major challenge.
DISCUSSION
The population probably will beillion byan addition Inears roughly equal to the present population of the US. Even if the regime should decide to limit the growth of population by birth control and other means. It Is unlikely thatrogram wouldubstantial effect during the next decade. China's population will continue to beyoung and will provide asupply of young workers and military manpower.
Gross National Producturing the nextears Communist China's annual increase In GNP probably will average about six to eight percent, and at this rate of growth GNP1 will be approximately double the present level. The primary factor inthis rate of growth will be the continued investment of approximately one-third of GNP in the expansion of productive capacity, but it has been assumed in making the estimate that
"The basis of the economic growth estimates In this 8NIE Is set forth in Appendix A.
the yield per unit of investment will dropcompared to Ihe past decade. In addition toarge portion of the increase In GNP will be used for militaryand for supporting the addedrelatively little will go for Improving living standards.*
griculture The greatest test the Chinese Communist regime will have to pass In the coming decade will be to increase agricultural productionate faster than population growth or about three percent annually. This Is well within the capability of modern agricultural science; in technically advanced Japan, per acre productivityercent annuallyn Taiwan farm outputercent annually between
'One computation, which Use* account ol both the US and Chinese price systems, shows per capita ONP in China aa0 and URSlftSer capita ONP in China will remain well behind that ot any highly Industrialized nation Even In Japan, per capita ONP Is expected to reachIt was an estimated Ufltaao1
SEC
S
n South Korea farm outputercent annually3nd in India grain output has risen by nearly four percent annually over the past decade. Assuming that the weather willa normal average of bad and good yearsyear span, success or failure in agricultural development will depend upon the willingness and ability of the regime to invest sufficiently in agriculture, to organize its agricultural forces effectively, and tothe peasantry. The failure of theorganization, in connection with the crop disasters of the past three years, has probably caused China's leaders to realize that personal and material incentives are essential to the success of their agricultural program. The Communist commitment to socialization, however, will almost certainly lead the regime to move again toward expandedand the farm program will probably vacillate between degrees of regimentation of the peasants and concessions to them.
On balance wc believe that growth Inoutput will be adequate to meet at least the minimum needs of theowever, the regime will probably be unable to build up adequate food reserves, rendering the country vulnerable In poor crop years to hardships comparablendnecessary large food imports in those years. Fibers and other industrial crops will probably be sufficient to support growth in the nation's light industry, but periodic shortages are likely to occur here also.
Industry. Industrial production1 will probably be about triple that1 Communist China may produce as much asillion tons of steel, moreillion tons of coal, andillion kilowatt-hours of electric power, and it willajor producer in many other fields. Primarywill almost certainly continue to be on the expansion of heavy Industry, but there will alsoubstantial increase In theof consumer goods, such as cotton cloth, sewing machines, and radios.
'The effectsailure to meet these minimum needs ore distrusted In the.
Foreign Trade, Over the next decade the volume of China's foreign trade will probably be smaller in proportion to GNP than it has been in the past. Domestic requirements for agricultural products are expected to reduce the availability of farm exports over the period, and this loss is likely to be offset only gradually by developing exports of light manufactures. Part of its export earnings will also be needed to repay substantial trade deficits accumulated over the past several years and to import from time to timequantities of gram. Thus, although China's military and industrial rates of growth depend on Imports of certain military goods, machinery and equipment, large quantities of petroleum products, and other industrial materials, such Imports maymaller role over much of the next decade than previously. The bulk of China's trade still will be conducted with the Soviet Bloc. However, there is likely toonsiderable growth of trade with underdevelopedbased on expanding Chinese exports of industrial manufactures. Peiping probably will continue its aid and trade programs in specific areas of the world aimed at serving its political ends, but its difficult foreign trade position will tend to limit the magnitude and flexibility of such programs.
1 Communist China will probably have made appreciable progress toward itsgoal of economic self-sufficiency. Its own production will probably be able to meet the economy's needs In basic heavyproducts, in many basic types of machinery, in nearly all products of lightand in food (except In poor cropowever. Communist China will still lag considerably behind the USSR, Japan, and the industrial nations of Western Europe in the quality, diversity, and technological level of production. In order to continue itstowardruly modern power, Communist China1 will still need totechnology, some kinds of complexgear and precision machinery, some metal alloys, and many types of advanced military equipment.
SEC
Political Strength. Revolutionary zeal probably reached its peak8 and has been severely dampened by the harsh economic setback. The people ofparticularly the peasants, who bear the brunt of the regime's efforts togenerally disillusioned with the glorious promises and grandiose schemes of theand even the party cadres areto associate Communist ideology with failure and suffering rather thanIn the future, the Communist leaders will probably have some success in Identifying the Communist system with greater national progress and achievement, as the Soviets have so successfully done, to win popular support Success in Peiping's nuclear weapons program would play an important part. Discontent will almost certainly continue to exist, but the regime will probably combine limited material incentives and appeals to patriotism with effective repression in sufficient degree toany large-scale organized resistance.
1 the political leadership Itself will have changed to some extent Less thanercent of the party members1 will have had any direct experience with theevolutionary struggle for power.however, will almost certainly continue to come from the surviving old revolutionaries. Although some of the present politburo(present average age:ears) willhave died, their replacements will almost certainly come from among their oldon the Central Committee. If Mao survives, he will bef he has died, his special authority will be missed In settling intraparty differences but the continuity of the established leadership group wouldharp change in policy would be highly unlikely. Mao's death mighta factional struggle within the top party leadership, particularly if it occursime of domestic crisis; however, tho cohcslvcness of the Chinese Communist Party leaders in the past suggests that the party could probablytruggle for succession withoutdamage.
Science and Military Technology1 the present shortage of capable scientists will have been considerably relieved, with significant numbers of new scientistsfrom advanced training programs. Pel-ping's main emphasis will still be on enlarging its scientific and technological base. Chinese science may haveewof world interestut Its overall standing will be well behind that of thenations. Communist China will still be trying desperately to assimilate the ever-advancing science and technology of the USSR and the West.
Technological capabilities, however, may be relatively advanced in key economic and mililary areas where the Chinese havetheir efforts.1 the Chinese Communists are likely toodestof domestically produced nuclear weapons. They will be producing short-range andmedium-range missiles and it may be that they willubmarine-launched missile capability. It is also possible that they can produce an operationalballistic missile system withwarheads1
Military Strength. The armed forces will probably show little increase in personnel, but their capabilities will have been substantially increased by modernization and theof new weapons. If Soviet aid tomilitary production is restored to previous levels, Communist China willhaveumber of new submarines to its fleet and have increased its air poweronsiderable number of domestically-produced medium jet bombers. EvenSoviet aid, it will probably be self-sufficient in the peacetime production of mostweapons, including tanks and ungulded rockets.
Sino-Snviet Relations. Communist China's Increased strength, combinedreatly increased degree of military andself-sufficiency, will cause Peiping to be even less restrained than at present inthe Soviets on points of doctrine, strategy, or tactics. Peiping's efforts to woonations and to present itselfodel for the Communist parties of these
" See footnotes to Conclusion 2.
-S
will probably lead lo Increasedwith Moscow Relations betweenand Peiping will continue to be disturbed by differing revolutionary stages, ideological interpretations, national interests, andconflicts, in general, relationsthe two slates will probably not be much better than lukewarm. It is likely, however, that their common commitment to the Communist cause, and. especially, their common enmity toward the anti-Cornraunist world will preserve sufficient unity to enable Moscow and Peiping to act in concert against the West, especially in tiroes of major
frrtm*!onat Relations. It is probable that1 Communist China's increased economic and military strength will enable its aggressive leaders loonsiderably greater role In international affairs than at present. Communist China will probably have been admitted to UN membership Most countries will have extended diplomaticThe basis of Peiping's foreign policy will continue to be opposition to the US. the promotion of communism in underdeveloped areas, and the establishment of Chinesehegemony in Southeast Asia.
CONTINGENCIES
First Contingency: AgriculturalAgricultural disaster might occur either early or late In the decade. The series of bad harvests which began9 might continue2 or beyond. In this event, the already undernourished population would sutler greatly from the cumulative effects of widespread malnutrition and loweredto disease, especially in the spring of each year before the early harvests brought relief. It is also possible that mismanagement over the next decade might prevent foodfrom keeping pace with population growth even with good weather. Startings inadequate base, this would mean notontinuation or intensification of present food problems but of problems of foreign exchange and Investment as well
Whatever the cause of agricultural failure, there would be increased popular disillusion-tnent with communism and growingagainst the regime. Peiping would be forced to rely increasingly on force and terror to regiment the people and on preferential treatment (as well as purges) to preserve the loyalty of lis Instruments ofparty, the police, and the army. At the same time, growth In ONP and Industrial output would be seriously relarded and futureobscured. However, the regimecould survive such difficulties, even as
Stalin's did, but In these circumstancesChina would have considerably less power and prestige1 than wc have
The effect that prolonged agricultural failure would have on Peiping's foreign policy Is uncertain. Two factors might incline the regime toward military aggression On purely economic grounds there might appear toase for attempting the conquest of therich and relatively underpopulated lands of Southeast Asia. On political grounds the rallying effect of war might appeal to Peipingeans of deflecting popularAgainst this rationale for war,are very weighty considerations.
Conquest of Southeast Asia would notalleviate China's food problem. Mainland Southeast Asia's annual production of rice (the only important exportable food) la only aboutillion tons.ercent of which Is normally consumedven though the Communists might ruthlessly reduce local consumption, the disruptive effects of war, the attrition of guerrilla warfare, and the effects of peasant resistance to foreign oppression would lend to reduce production sharply. Over the longer run the prospeets of greatly
'At present Communist China's annual grainIsillion metric Ions.
SFCJ4-ET
Increasing the region's food output under Communist, domination are also dim; in North Vietnam experience has demonstrated that, even when working with their own people, the Communists fail to stimulate enthusiasm and high production from the peasantry.
Moreover, China has historically been aggressive and expansionist in times of strength rather than weakness. The attack on Quemoy8 coincidederiod of strength and optimism; since then Peiping has been less aggressive. Most important, Peiping is almost certainly convincedajor overt assault on either Southeast Asia or Taiwan would mean war with the US. On balance, therefore, we believe thatproblems alone would probably not cause Peiping to embarkilitary adventure.
The Second Contingency: Maior Change in Sino-Soviet Relations. It Sino-Sovietwere to improve greatly, economicbetween the two powers wouldcertainly expand accordingly. The USSR has the economic strength to give large-scale assistance to Communist China'sassistants by the thousands, plans and blueprints for advanced industries and missiles and nuclear weapons, and loans or grants to tide China over its present period of economic depression and launch itsWhile anything approaching this level of cooperation between Moscow andis highly unlikely, any substantial rise in the current level would increase Communist China's economic strength1 andIts positionodern military power.
onversely, il Sino-Soviet relations were to deteriorate further, present levels ofcooperation would be reduced orendedomplete cessation of Soviet aid would not. in itself, stop Communist China's economic growth. Industrialwould fall short of the tripling we have estimated, but the effects would be felt less in the gross quantity of production than In the diversity, quality, and technological level of production. Progress in the development of advanced weapons would be considerably slowed, although, even without further Soviet aid. Communist China would probably have produced some atomic bombs and some missiles
SECRET
APPENDIX A
BASIS OF THE ECONOMIC GROWTH RATES'
Despite serious current difficulties, the economy of Communist China probably will achieve rates of growth during the coming decade equal to the high rates of the First
Five-Yearut below the extraordinary rates of the "leap forward". as follows:
8
NEXT DECADE
9 1
ANNUAL AVERAGE BATE OF GROWTH <IN PERCENT) FIRST FIVE-YEAR PLAN "LEAP FORWARD
ONP
Industrial Production Agiicultural Production
data used In making estimates of present and future production in the Chinese Communist economy come from bolh oHlclal and nonofflclal sources. Official production claims for Individual Industrial commodities have been checked against related daia on plant capacity, raw materials, and labor force, and these claims generally stand up under examination. On the other hand, official claims for production In agriculture have been sharply discounted. The release of official data has fallen on In the past year, but, on the whole, enough Information is available on the Chinese economy toeasonably solid base lor thepresented In this SNIE.
FACTORS OF GROWTH
factors of growth are expectedhold over the nextarge and increasinglyforce, further exploitation of theresources available for heavycontinuation of the regime'sof rapid industrialization.
The main factorrates of growth over the next decadeability of the Chineseigh rate of investment.in new productive facilitiesin Chinese domestic prices)ercent of GNP2nd the regime Is expected toto allocate approximately one-thirdto investment over the next decade.
Even if the additional output yielded per unit of investment fell to one-half of the yield per unit of investment obtained In the First Five-Year Plan period, total output (GNP) would still riseercent per year, theadopted for this estimate.onsiderable decline in yield from investment is to be expected in the next stage of China's economic development, the assumption0 percent decline Is so great as to suggest the estimates are conservative.
abor Force. The manpower ofChina Is so abundant that the industrial labor force could be doubled over the next decade at the same time that the agricultural labor force was increasing by aboutillion people. Although shortages of skilled man-
-
will persist throughout the economy, the continued emphasis on education and technical training, as well as the continued accumulation ol experience in science andwill lead to steady improvement in the quality of the labor force.
atural Resources. Communisl China has large scale resources of coal, iron ore, water-power, and the other resources necessary to build up heavy industry. The majoris natural crude oil. Communist China will have made great strides in exploiting its available petroleum resources1 and substantial reserves may have been proved, but the country almost certainly will continue to depend on the Outside world for anshare of its petroleum products.
conomic Policy. The regime's policy of forced-draft industrialization is expected to be resumed once the current economicare surmounted. This policy Involves the concentrationigh proportion of manpower, resources, and administrativein sectors of the economy capable of the most rapidIndustry,and transportation.
PATTERN OF GROWTH
Growth In industry and the economyhole, however. Is not expected to follow an even pattern. Three periods may beroughly as follows:
eriod of current economic cUfflculties when growth is slowed down (or even broughtalt)hortages of rawdjustment to theof the Soviet technicians,elative increase in priority for agriculture.
eriod of high and rising rates of growth, when industrial activity is supportedettering of raw materialshe coming into operation of considerable additional planthe realizing of gains from newly trainedprofessional, technical people,eturn to "normal" situation In
. Period of high, but decUnlng rates of growth, when entry into relatively more complex fields gives slower rates of
Tfe T
Original document.
Comment about this article, ask questions, or add new information about this topic: