Created: 4/4/1961

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ThlB Special National Intelligence Estimate was approved by the United States Intelligence Board Significant Judgments of this Estimate are as follows:

The Chinese Communist regime Is now facing the most serious economic difficulties It has confronted since lt consolidated its power over mainland China. While widespread famine does not appear to be at hand, in some provinces many people are noware aubsistance diet and the bitterest suffering Ilea immediately ahead in the period before the June harvests. Public morale, especially in the rural areas, is almost certainly at its lowest point since the Communists assumed power, and there have been some Instances of open dissldence.

The Chinese Communist regime has responded by givinga higher priority, dropping ita, "leap forward" in industry and relaxing somewhat the economic demands on the people. It has even importedillion tons of foodstuffsl,ost.of0 million of Communist China's limited foreign currency holdings.

While normal crop weather1 would significantly improve farm output over the levels9t least two years of average or better harvests will be required to overcome the crises andestoration of the diet to tolerable levels, some rebuilding of domestic stocks, and the resumption'of-net food exports. 1 Is another poor crop year, the economic and political effects for Communist China are likely to be grave.

It Is estimated that Peiping would not accept food offers .rom the United States even under conditions of widespread famine. Likewise it Is estimated that even famine conditions would not, in themselves, cause Peiping to engage in direct military aggression.

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