COMMUNIST CHINA

Created: 12/6/1960

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NATIONAL -

Supersedes

COMMUNIST CHINA<

S

TABLE OF CONTENTS

Page

I. 3

II. DOMESTIC

Dependence on the

Population

Science and

The

The

Relations Between the Party and the

Sino-Soviet Cooperation and Advanced

Probable Trends in the Military

III. COMMUNIST CHINA'S INTERNATIONAL. IS

View of the World

China's Foreign

Policy Toward the

The Taiwan

Communist China and the

Policies in

Policies

Policy

APPENDIX I: Scientific and

APPENDIX II; Reliability of Chinese Communist Economic

APPENDIX HI: Tables and

COMMUNIST CHINA

THE PROBLEM

To analyze Chinese Communist domestic developments and external relations, and to estimate probable trends during the next five years.

CONCLUSIONS

leaders of Communist China are determined to makeeading world power as rapidly as possible. Over the pastears Communist China has made impressive gains in industrial and military strength and in the organization and regimentation of the Chinese people. These gains, togetheronviction that world trends strongly favor thecause, have been increasingly manifested during the past year inself-confldence towards both the West and the USSR. )

We believe that over the period of this estimate. Communist China's economy will continue to grow rapidly, especially in heavy industry, althoughess rapid rate. Communist China's dependence on the rest of the Bloc for economic and militaryand for technological assistance will have been substantially reduced.5 Communist China will probably be the world's leading producer of coal, the third ranking producer of crude steel.

a major producer of electric power, and it willerchant marine ofsize. It will also have madeprogress toward becoming apower in science and technology, though its relative standing will remain well behind that of the advanced nations. However, if Sino-Soviet relations should deteriorate to the point where Bloc sources of industrial equipment andassistance were greatly reduced. Communist China's economic growth would be slowed, expansion into more complex fields of industry inhibited, and military development retarded.

eiping will continue to face major economic problems for many years to come. It will continue to be dependent upon foreign sources for some key items of industrial and military equipment and for specialized technical knowledge. Communist China's petroleumwill grow rapidly during the next ve years, and even the expected tripling

S

domestic production will not end China's dependence upon petroleumTransportation will remainAgricultural production will still be meager in relation to domestic and export needs. Per capita supplies of food and other consumer goods will not have risen enough to enableincentives to replace coercion and political pressures as the chief spurs to production. An increasingly urgentproblem will confront the regime with difficult policy decisions.)

There will probably be growingand disillusionment among the Chinese masses concerning the heavy burdens they will be forced to carry, and the regime will face increasing problems in overcoming public apathy, fatigue, and passive resistance. In addition, there may be an increase in party factionalism when Mao Tse-tung dies. Suchhowever, will not threaten the regime's ability to control and direct the country. Furthermore, there is positive support from some millions of people who have made real advances under Peiping's rule, and among many thereeeling of pride in Communist China's rapid ad-vanceorld power. In any case, we now see no serious threat, either internal or external, to the continuance of the regime.

Peiping's conventional militarywill probably continue to grow, and will increasingly threaten the non-Communist Asian periphery. The rate of increase in Communist China'scapabilities will be determined in large part by the economic demands of the regime's overall economic develop-

ment program and by the nature andof Soviet assistance. Communist China will probably have exploded adevice during the period of this estimate and may havemall number of elementary nuclear weapons It may also haveet medium bomber. However, unless therereat increase in Soviet aid in the missile field, which wc believe is unlikely, China will be unable to develop and produce even medium-range guided missiles)

The most important development of the past year in Communist China'shas been the breaking out of the long-smouldering Sino-Soviet dispute over Communist world policy andwithin the Bloc. We believe that the differences between Peiping andare so basic and are so much aof the different situations andin the two countries that anyresolution of the fundamentalis unlikely. Although the possibilityomplete break cannot be excluded, we believe that the alliance against the West will hold together.the estrangement will probably continue, with ups and downs as new issues arise.' )

A basic tenet of Communist China's foreignestablish Chinesein the Farcertainly will not change appreciably during the period of this estimate. The regime will continue to be violently anti-American and to strike at US interests wherever and whenever it can do so without paying

The judgment or this paragraph appears to be consistent with such information aa wo now have oa the recently ad)uurr.cd conference In Moscow.

a disproportionate price. It willand almost certainly step up its efforts to create trouble and confusion in Asia, Africa, and Latin America and to subvert anti-Communist and, probably, non-Communist governments in these areas.)

uring the period of this estimate Pet-ping's policies will range between relative moderation and outright toughness. Pci-ping will probably again increase itspressures in the Taiwan Strait area. However, we believe chat Peiping does not intend to advance its aims by overtaction elsewhere, although itwill react forcefully to challenges and opportunities. Its arrogant self-confidence, revolutionary fervor, andview of the world may leadto miscalculate risks. This danger would be heightened if Communist China

uclear weapons capability.)

before the explosion of aPeiping's military power andmay increasingly complicatedisarmament problem.will exploit this situation in anto enhance its internationalat the same time may attemptthe conclusion of anyagreement, at least until itnuclear power.

ommunist China willmore fully the role of apower, whether or not it is aof the UN. Its arrogance,capabilities forource of concern toAt the same time the dangerCommunist China to US interests,in Asia, will have92)

DISCUSSION

Communist China enters itsthe balance sheet shows bothand formidable liabilities.rapid economic growth andincreasing military strength arethe regime closer to Its goal ofleading world power. At the same time,is facing some of the greatestdomestic and foreign. It has yet

lthough there Is much discontent and apathy, especially among the peasants, the general aspect of Communist China is marked by regimented energy on the part of the people, and self-confidence on the part of the leaders. In the reports of returning travelers the word "arrogance" appears with striking regularity. Even Communist visitors report that the dedication and drive of the Chinese

are In conspicuous contrast to che situation In other Communist countries.

espite these manifestations ofPeipingerious domestic weakness In agriculture and an external crisis in relations with Moscow.0 thediet is stillrecariously low level and che regime has been unable to meet all of its export obligations from the domestic harvest. The year has been even moremarked by Peiptng's open challenge to Moscow's authority in the Communist Bloc. This action has brought upon Peiping Chedisapproval of the USSR and most of the rest of the Bloc and has raised the possibility that Bloc economic and technical support, which are essential for China's rapid growthreat power, might be seriously reduced or even cut off.

he small group of men who runChina have almost unlimited ambitions for their regime and country. They nxplicitly assert that China shall become thoroughly communized as rapidly as possible, and they apparently believe that China will eventually become the greatest nation in the world. in the reality and attainability of these goals has ied this handful of xealots to drive themselves and to be prodigal with the lives and energies of the Chinese people, they have cajoled and coerced the workers and peasants of the country toaximum of work infor minimal compensation and promises that the rapid growth in production willbring much greater material rewards. The leaders themselves are inspired by aof Communist Idealism and Chinese They promote communism to hasten China on the road to power and glory, and exploit Chinese nationalism to hasten the building of communism.

II. DOMESTIC BASE A. Economic'*

eneral. The Chinese Communist regimeas greatly accelerated Its efforts to catapult the country into the ranks of the chief industrial powers in the shortest possible time. esult of this effort the gross national product (GNP) of Communist China increased by aboutercent2 percentnd aboutercent* The latter two years would have shown greater rises but for the abnormally bad weather which crippled agriculturalremendous input of labor and capitalwas concentrated upon theof the economy, especially heavy industry Although still labeled the "Great Leapthe regime's economic policies at the

' The Chines* CommunUU. Ilka their Sonethave made It difficult for foreign observers lo use official data inlear under-standing of the workings of the economy They have released only partial data and In various ways presented misleading comparisons ineconomic production and activities, This requires that Chinese Communist statistics be viewed critically and In some casesdiscounted. See Appendix n.

end0 are relatively conservativeto the extreme programsespite its successes Communist Chinaong way to go before becoming aindustrial power. Industrial9 was less thanercent of that of the u'S. while the general level of technology and the general quality of product in Chinesewere still far below the standards of the industrialized nations of the world. ercent of the population is engaged in agriculture, and per capita GNP9 was only about' oruarter of that of Japan. The Chinese Communist regime has been able to sustain its rapidgrowth only through Imposing severe hardships on the Chinese people and through restraining rises in their already meager standard of living In result, there Isdisillusionment among the people.

hus Communist China's economy faces the next five years with both greater assets and greater liabilities. The economy is now organized to sustain heavy Investment, and the percentage of ONP invested, which rose fromercent7 to aboutercentill probably reach aboutercent1 At the same time, many seriousdifficulties will challenge the regime.

'During the first rive-Year Planhe average annual Increase In ONP was seven

umber of different methods may be employed to convert one country's ONP into the currency of another country for purposes of comparison. Those different methods will frequentlyidely differing results, particularly when the structures of the two economies are so dissimilar as arc the CS and Chinese economies Any one of the methods haa defects In providing mter-

naUonal comparison; thus the above figure

should be regarded onlyough approxima-

Uon.

'Pnces o( capital goods In China, where capital la acaree in comparison to labor, are highto prices of capital goods in the US. If investment were valued in terms of the US pnee structure, these percentage shares of Investmentortion of Chinese ONP would bo reduced by about one-third; even so. investment would stul be an Impressively high percentage of ONP The higher prices for capital goods alsolightly higher growth rate of ONP

It is probable, however, that the leaders will be able lo find sufficiently effective solutions to keep the economy growing rapidly, even though occasionally faltering and alwaysgreat pressure, especially in agriculture. On balance, we estimate that over the next five years the annual growth in GNPoercent, provided the flow of equipment and technology from the rest of the Bloc continues.

ependence on the Bloc. Until recently the number of Soviet technicians inChina was gradually reduced byagreement as Chinese technicalimproved, the number of Sovietin China at the beginning0 was about half the peak reachedn the summerowever. Moscowwithdrew the majority of Itstechnicians from China. If these are not replaced, the movement of Chinesetechnology, and weaponry into more complex fields will be slowed. ajor reduction in deliveries from the Bloc would alter the magnitude and structure of Communist China's economic growth. The annual growth in GNP would fall somewhat, although lt would still be large because of the high level of investment. The regime would be forced to alter its developmentreducing emphasis on sectors requiring more advanced technology and more complex equipment.

Branches of heavy industry which are especially dependent on outside aid fortechnology, or both, include: thestages of aluminum and steel, large electric power stations, cement, selected(fertilizer, plastics, and syntheticeavy and complex machine tools, selected electronic equipment, naval shipbuilding, jet aircraft, heavy ordnance and engineerand nuclear energy. In addition, China now imports about half its POL from the Bloc.

Several sectors of the Chinese economy have never received substantial Soviet Bloc support or have outgrown the need for much outside aid:griculture, transportation, light industry, mining, and some branches of heavy Industry. Heavy industry should

be able to satisfy nearly all o( Chinese planned needs5 for the following goods: equipment for smelting and refining of copper and aluminum, machinery for small and medium iron and steel furnaces and steel rolling mills, coal mining machinery ol the less advanced types, oil drills, equipment for refining petroleum (except by catalyticheavy industrial chemicals, small and medium turbogenerating equipment, rubber tires, lathes, trucks, small merchant vessels, small transport aircraft, radios, and television

griculture. Agricultural achievements58 provided opportunities for Instituting collectivization snd communaliza-tion, respectively The real increases of food production8 were greatly magnified by false statistics. Misled by these spectacular figures, the regime in8 allowed food to be consumed through free supply in the commune messhallsate which could not be sustained. Moves were also made toward reducing acreage with the expectation of producing more crops on less land by new Commurust methods of intensive agriculture. By the end8 food reserves were already running low. and there were serious local shortages in many parts of the country. Since then the problem has been greatlyby two successive bad crop years. Production of food grains9 wasaboutercent less than our estimateillion tons0 harvest is likely to be little. If any. better. And in these past two years the population increased by aboutillion.

esult, rationing has had to be in-tenstfled. In addition, the regime has felt It necessary to supplement the food supply with city garden plots and an intensiveprogram to collect wild foods and fibers. Despite such moves, by the sutumn0 Peiping was falling behind on export commitments and was even buying grain abroad in an effort to meet them. Serious hunger and malnutrition were reported from several parts of the country, and it is likely that food conditions will further deteriorate through the spring1 before the early summer harvests. The cotton crop has also

(alien short, temporarily halting growth in the textile industry and bringing on even stricter rationing of cotton cloth.

he regime has belatedly comeeali-xation that more effort and investment are needed to enable agricultural production to keep up with growing demands upon it.the past three years Peiping haa given increasing attention to agriculture. The share of capital investment devoted to agriculture in the national budget has increasedittleercent7 to nearlyercenthile under the commune organization peasant investment has more than doubled in the same period. In the latter part0 vigorous efforts were made to increase the labor force available in the countryside. Cadres and civil servants were sent to the rural areas and ail nonproductive units such as teams for welfare, culture, and athletics were dissolved for the duration and sent to work In the agricultural "front1 should turn out tohird successive year of bad weather, the present food and export emergencies will be largely ended by1 harvest Given average weather, the reg^nc will probably be able to meet its minimum needs for agriculturalfor the next Ave years and perhapsonsiderable time beyond that. there will probably beillion more Chinese to feed5 thane believe that the regime will invest enough in agriculture In the form of fertiliser. Irrigation, mechanization, and manpower to meet the increased demand and. possibly, toittle improvement in the average diet.throughout the next five years and indeed for the foreseeable future, thepriorities of the regime's program will limit the agricultural effort. This suggests that the balance between consumer needs and agricultural production will be aone. always subject to beingupset by the vagaries of weather and agricultural policy. Another poor crop year1 would probably force substantialin the development efforturther reorientation of investment from industry to agriculture,

apulation. W- estimate Communist China's population0 atillion andillion inhis population growth rateannually reflects the effectigorous public health program that has Increased life expectancy from aboutears9 toearsn increase whichnations required aboutears to achieve In their demographic transitions. As athe population growth in the absence of curtailed fertility can be expected toleadingoubling of the population in aboutears. However, thr Chinese leaders, we believe, are aware of the long-run dangers of rapid population growth. At the same time. It is probable that an effective program to curtail fertility would involvecoercion and would encounterideological and social resistance,in adverse effects on party unity and public morale. In any event, the critical nature of the population problem will become increasingly clear to the regime and it may begin to take more effective action during the period of this estimate.

ndustry. Industrial growth over the last three years has been rapid but uneven There were two great surges. one in the last halfhe other covering the last quarter9 and the first quarter0 In part these rapid increases resulted (especiallyreatly intensified exploitation of China's greatest natural resource, People worked longer and harder, and millions were added to the Industrial labor force. Existing plant facilities were utilized more extensively, and there was greatof the fuel and raw material sectors, such as mining and building materials, which could use large amounts of unskilled labor.

ncreased labor input, however, is only part of the explanation for the rapid growth of industrial output. The Chineseare now receiving the payoff fromears of intensive effort to expandin heavy industry. Large industrial plants have been built with equipment andacquired from other members of the Bloc, primarily the USSR. Many of these plants

have come into production in the past three years, and. startingow base figure, the addition of the output of these large factories resulted in striking percentage increases Supplementing the increase in output from the largemaller but appreciablehas come from the establishmentarge number of modem, small, domestically-built plants using labor-intensive methods o( production.

4

8 Industrial production increased by aboutercentnd by anotherercente anticipate that0 increase will be aboutercent We believe that the production of crude steel, which has received especial emphasis from the regime, rose as follows (in millions of metric tans):

1M8

Production of crude steel0 wasto level off at the rate of the last quarterrobably because It is out of balance with rolling mill capacity and the rest of heavy industry. Coal production has risenillion tons7 to anillionlthough there hasrop In theutput ol electric power has likewise more than tripled in threeillionillion kilowatt-hours Other basic industries have also increased greatly.

lthough the production of crude oil in Communist China increasedillion tons7 to anillion tonshere have been indications of ashortage in the latter partt present China produces about half of the crude oil and petroleum products it uses and relies on imports (primarily from the USSR) for the other half, including virtually all of its aviation fuel. 5 domestic crude oil pro-

' This placet Communist China ahead ot tha US and second only to the USSR in coal production, but coal la stUI the main source ot energy in China. In petroleum, natural cas. and electric power. Communist China ranks far Sown on the list of producers.

ductlon may reachillion tons, with agrowth in refining capacity. Ever, so, demand will probably have grown so much that Imports will be required touarter of the nation's needs of petroleum products

efforts have been mostthey concentrated on acceleratingprogram established in thePlan and least successful whena radical (Chinese) departureestablished program. Planning andof industrial production isresemble mare closely the Soviet modeldevelopmentomplex modernsociety progresses.

rate of industrial expansion,remaining high, is expected toduring the next five years for areasons. The recent practice ofnarrow and simple product mix' willgive way to greater diversity,and specialization. This greaterand complexity will requireof investment and longer leadinvestment and the completion offacilities. Moreover, industrialwill declinehare of totalbecause agriculture andwill necessarily claim anof investment. Also, with materialfor workers and peasantsbe severely limited, Peiping willdifficulties in sustaining labor effortincreasing labor productivity.

ssuming no drastic reduction of Soviet trade deliveries and technical support, wethat Communist China's Industrial growth, whichittle overercentnd aboutill drop from aboutercent0 to as low asercentn heavy industry will expandfaster than light Industry, and by

1 For example. China's steel Industryew kinds of slloysimited number of rolled or extruded shapes As the economy turns to the production of moretypes of sophisticatedide range of ipeclal alloysreat variety of iliupes will be required.

t will probably be more than three times9 level. Production in heavy industry will probably grow byhirdut5 the annual growth rate mayto about one-sixth. Production In light industry will increase by anropping to about hall that

lthough Peiping will probably increase its investment in modern transport to enable an approximate doubling ol capacityhis rate ot expansion would still leave the transportation situation very tight the primary means of transport, will be substantially extended, improving thein the areas now served and completing the trans-Sinfciang line to the USSR, thein the southwest, and possiblyailroad to Lhasa. Truck transport will also be expanded to handle shorthaul traffic, while coastal and inland shipping transport will be rapidly developed to supplement both road and rail transport. It is also expected that Communist China will greatly expand itsmarine through construction andand will probablyubstantial proportion of Its foreign trade in its own China's telecommunications facilities, which have developed rapidly in the past few years, will continue to expand and will provide increasing support to the regime's economic, military, and political programs.

5 Communist China's grossoutput will probably rank with that of the UK. West Germany, France, and Japan. It will lead the world in the production of coal and willajor producer of electrict will probably rank third in crude steel

In terms of quality and diversity ofhowever. Communist China will still be in the third echelon of industrializable technological gap will still exist be*

' l'led construct lor. of theycroeiec-trie projects now on the books proceeds on schedule,5 China will be producing closeillionear This Is more than the esumated combined production of theSatellites by that year end about the aa OS production

tween China and Japan. Evaluated in terms of per capita GNP or by the standard of living Of its people. China will stillackward nation. Although the income of the average citizen will probably have risen slightly above0 level, the per capita production ol food and other consumer goods will not have rtsen sufficiently to replace coercion andpressures as the chief spurs to

cience and Technology." The Peipingconsiders scientific and technological progress of major importance in developing Red Chinaorld power. The country is making significant progressear program to raise its scientific and technological level in vital areashe effort is concentrated inroadfields, such as electronics and atomic energy, and at the sameeginning has been made in associated fundamental research. Notable success is already evident In several key technological areas, and we believe gen-oral scientific and technological capabilities will be increased significantlyhinas relative standing will remain well behind that of the advanced nations,primarily becauseeneral lack ol scientific manpower, the most limiting factor in the Chinese effort,

B. Social-Political

he Party. The members of the Chinese Corrirnunist Party (CCP) face tremendous problems in seeking to cajole and coerce the workers and peasants to serve the ambitious goals the regime has set. Such problems are especially acute for the working level party cadres who. whatever their energies or skills, are caught between the demands of the party leadors and the desires of thepeople. It is they who have to spur on the peasants and workers day after day,that they produce to the limits of physical endurance in return for pitifully inadequate rewards. The position of these

urther discussion of Communist China's science and technology appears in Appendix I_ and nuclear weapons capabilities are discussed inelow.

E OfltET

COMMUNIST CHINA GROSS NATIONAL PRODUCT, BY SECTOR OF5

(Billion yuan7 price*)

TOTAL GNP;GNP: GNP:

Uoji national codiici. al Ikw call *oei ivM miwdc irtau-Kt ta-at

COMMUNIST CHINA

ESTIMATED ANNUAL PRODUCTION OF SELECTED MAJOR

1 1

1

1

cars

1 jJ-U-

/

til M 60 W 60 II U U H M 61 61 M

MHNUM rtlXXS

MM I M M U M ** X Ml MU

FF/OAJfPSf ONLY

COMMUNIST CHINA

DIRECTION OF FOREIGN

Million Current US dollar**

Total Trade

secjfet

cadres has become even more difficulthe past three years as the partyhas abruptly and repeatedly changed course. For example, the party leadersthat many of the original claims ol advances made8 were exaggerated, and they suddenly abandoned the deep-plowing and backyard steel-making programs upon which so many millions of people soexpended their energies. Moreover, party leaders have publicly criticized the cadres for doing the very things Peiping hadew months before been directing them to do esult there has been some sag in party spirit, and Peiping has felt it necessary to infuse new enthusiasm and discipline into me party.

arious measures have been taken in an effort to gain the positive, enthusiasticof party members. Inmonth period ending inationwidewas undertaken to reinvigorate the party at the lower levels.illion new members were added, bringing the total membership to overillion.'" The party continues to be fairly successful in promoting the idea that membershiprivilege and honor, and in stimulating rank-and-filewith the concept that theyart of an elite vanguard.

evertheless, renewed disciplinarywithin the party have becomeontinuous series of campaigns has been directed against the members sincerive against "rightistsought to chastise and silence those critics who had questioned the party's extremist policiesnd tothe infallibility of the party leaders. The cadres have also been subjectedantl" drive directed against bureaucratism, corruption, and waste, and the transfers of cadres to the lower levels serves as another disciplinary tool.

"Already the world's largest Communis: Party, the CCP is now larger by some four million than the Comniunlst Party of th* Sonet Onion, although ituch smaller proportion of tha total populationercent In Communistercent In the Soviet Union i.

nother effort to establish the absolute authority of the party hasationwide movement in the past year to have all and nonparty upon intensive study of the works of Mao Tse-tung. which have become canonized as "the ideology of Mao." Mao has also been credited personally with originating themajor policies, and the recentof the fourth volume of Mao's works has given new impetus to the "cult of Mao" trend In addition to reinforcing partyand unity, this buildup of Maoreflects an outcropping of thenationalist pride and confidence in their superiority as developers ofand challenges the Kremlin byhinese as the foremost living Communist theoretician.

lthough prolonged and acrimonious in-traparty debates have occurred in the past three years, party discipline at the top level has enabled the regime to maintain itsunity and the party has not been forced to resort to Stalin-style open purges. The removal9 of Defense Minister P'eng Teh-huai and Chief of Staff Huang Ko-ch'eng was probably the result of their quesUoning of party policies, and some others msy have fallen from grace oross ofIncluding Politburo members Ch'en Yun (economic expert) and Chang Wen-t'ienon foreign policy, including Sino-Soviet relations). In general, however, the party leadership has not been beset by acuteand Mao appears to continue in control of the party and Its policies. Mao's authority, together with the active support he receives from many others in thegroup, makes it likely that his views will continue to prevail and that factionalism will noterious problem while he lives.

t Is possible that Mao,ill die during the period of this estimate. If so, his Influence as the patron saint of Chinese communism will still remain strong,since his heir apparent, Liu Shao-ch'i. appears to favor Mao's policies. Moreover, the tradition of party unity will still carry considerable weight. However, neither Liu

any other successor would inhertl Mao's personal authority and prestige.esult, there may be atemporary trendmore collective leadership, perhapscompromises on some controversial policies. Alternatively, it is possible that with the disappearance of the centripetal force which Mao exerts, disagreements over policies cr power struggles would become moreand serious, and the views of the pro-tesslonal military leaders may carry more weight. Moreover, party leadership will begin to devolve upon the secondao's death may thus have considerablebut we believe on balance that it will not cause basic changes in Chinese Communist policy or in the party's ability to enforce its dictates.

he People. In general the attitude of the overworked, underfed people of Chinathe regime is probably best described as resignation. Bitterness is widespread, buts impossible to say what proportion of the populace it characterizes The only sustained overt resistance comes from the nationalmost conspicuously In Tibet. There has been evidence of brave but futile uprisings among the Moslems of China's great Western regions, and there have been isolated instances of hunger-driven attacks on governmentby peasants. None of this, however, adds uperious threat co the regime. The watchfulness of the party, theof the secret police, and the haunting fear of informers preclude the organization of dissidents except in remote areas.there is considerable positivefor the regime. Millions of people have made real advances under Communist rule, and among many thereeeling of pride in China's rapid advanceorld power.

xecutions and condemnations to labor reform battalions are not resorted to as much as they were in thes because more effective methods of control have beenwhich have the added virtue of brlng-

"The average age of CCP Politburo membersaohound Liu Shso-chl. about

Ing less International disapprobation upon the regime The use of overwhelming social pressures includmg accusation and confession meetingsrincipal device employed. An effective damper upon dissldence is alsoby the extreme degree of regimentation which is Imposed upon the people: they haven't the time, energy, or privacy toany kind of anttregime activities. Two new devices of regimentation introduced in the past three years are the commune system and the universal militia.

great economic promises whichmade for the commune systemunfulfilled, but the system hasin diluted form throughout thepartly for social and politicalthe housewife fromto work in the fields andfor children In communaland feeding the people Inhave all worked to weakenand to improve opportunities forand indoctrination. It Is likelythe period of this estimate themove toward the reinstitution ofthe early commune features.

motivation is evenIn the case of the urbanprogram, which was postponed indifficulties were encountered, wasIn Marchnd by Julyclaimed that nearlyillionhad been enrolled. The patternfor urban communes tsthan that of the rural ones,chief characteristics appear to be theof communal messhalls andcenters and the release of womenkinds of subsidiary industrialunpopular program is of dubiousvalue, and it has brought few Ifbenefits to its members. Like thehowever, it improves thefor regimentation and The use of service teams to dousee leaningontinuingor the workers' quarters and theirpossessions.

The new militia organization ts like potent instrument of control Although body of militia outside the army has existed (or many years, the present nationwidefor the militia datest that time it became an integral part of theLeap Forward" and communeFrom about five million membershe organization has grown tond includes women as well as men. According to Mao. the militia is not solely, or even primarily, an adjunct of the army, but is intended to serve many purposes; military, labor, educational, and physical culture. The primary tasks of this greatly expanded militia clearly lie inand political fields at present. Ita means of organizing under militaryobile labor corps which can be readily moved wherever it is needed. Units have been engaged in irrigation, floodcultivation, and construction projects. The organization of these peasants andalong military lines and subject to military discipline adds one more means ofthe Individual and preventing theof resistance.

To the leaders, however, theseof control representeginning of the processes ofew "Chinese Communisthe Chinese Communists have published articles praising the prospect of further decline of the family and claiming that love of the statear greater and more rewarding thing than love of family. How far they can actually go in changing the Chinese people remains to be seen, but they have already gone much further Inthe reputedly individualistic Chinese than most students of China had thought possible.

e believe it unlikely that anliregime activities will threaten the regime's ability to control and direct the country during the next five years. The Soviet experience of thes demonstrated that even mass starvation may not generate resistance that canuthless totalitarian regime. The

11

majority of people will probably be dissatisfied with their personal lot under communism, but they will lack any effective means of translating their discontent Into activeAs disillusionment and thetoward <lissider.ee Increase,ervasiveness ofontrol mechanism will also grow. Peiping's chief problem will be not so much the suppression of dissidence as the overcoming of apathy, fatigue, and passive resistance. In any ease, we now see no serious threat, either internal or external, to the continuance of the regime

C. Military 11

General. There have been no dramatic changes in the size, equipment, orof Communist China's military forces during the past year. Progress towardthe capabilities and modernizing the equipment of the armed forces has been steady, but not spectacular. Communist China's own munitions industry Is growing principally as the result of industrialand technical assistance from the USSR, and Soviet shipments of military equipment to China began to decreaseeiping Is still dependent uponfor many kinds of military equipment and supply, particularly POL and the more complex items associatedodem and balanced conventional force.oviet shipments of militaryand machinery for the production of military supplies to China appear to have dropped oft sharply.

The conceptarge ground forceto dominate Chinese Communistdoctrine. There are moremen in the military establishment, which ts capablo of defeating any other non-Soviet Asian force or combination of forces. Aboutercent of them are assigned to the army, making it the largest in the world. Into its traditional mission of defending Communist China, the army has Important internal security, economic, and political

a small percentage of then- are militarily effecUve. See

See cnaru and mapi.f. for detailsChinese Communist military strength* and dlsposlUons.

E

functions. In fulfilling its 'unctions the army is backed uparge trained reserveuge People's Militia.

A few select Militia units haveair degree of military effectivenesson the whole, the militia lacks thetraining, and support that are required in the development of military capabilities. In the strict military sense, the principal value of the militia lies in its potentialource of partially trained manpower for replacements ?or the regular armed forces or to free the regular forces from routine internal security tasks.

The Chinese Communist Air Force and Naval Air Forceombined personnel strength of0 andet aircraft in operational units. The air force now has aboutdvanced fighters (FARMERn tactical units. Its air defense capability has improved through modernization of its aircraft control and warning network and an intensified training program for fighter pilots. The air offensive capability liesight jet bomber (BEAGLEorce ofircraft.iston medium bombersndiston light bombershe Chinese Communist Navy (Including its air force) has an0 men. Its principal strengths are its submarinehips. IncludingW"arge and effective motor torpedo boat force, and an extensive mlnelaymg capability.

Relations Between the Party and theCommunist China's senior military and political leaders have worked closely together for many years. Athird of the members of the Central Committee of the CCP have had extensive militaryand nearly all of the remaining two-thirds have had some military experience. Every key position in the Ministry of National Defense and in the armed forces ts heldarty member whose background includesparty activity sincess. Until recently there had been noof serious differences of opinion among ihe top leaders.

However, in9 the Minister of Defense and the Chief of General Staff were replaced under conditions which stronglythat differences of view had developed among the top leadersumber ofquestions. We believe that theseinclude the relative priority of military modernisation versus economic development, party interference in professional military matters, and the constant involvement of the armed forces in nonmilitary activities like the commune program. In addition, it Is likely that there are high-level disagreements concerning strategic concepts and the nuclear weapons issue No widespread purge within the military appears to have followed theof the Minister of Defense and the Chief of Staff, and it is likely that the present incumbents will attempt to close any gaps which may have developed between military and political thinking However, as younger military technicians and specialists emerge and assume more responsible positions, it is likely that military-party differences willand perhaps increase.

Sino-SQixt Cooperation and Advanced iVfdponafJP^ommunist China doesave asissile or nuclear weapons capability of its own. Peiping Is giving high priorityuclear weapons development program Until the Chinese Communists develop their own nuclear capability they will remainupon the USSR for military support with nuclear weapons. We believe it unlikely that the Soviets have stationed nuclearin China, but even if they have, such weapons would almost certainly be held under strict Soviet custody. The USSR could give China nuclear weapons from its ownbut it almost certainly has not done so. and we do not believe that the Soviets intend to do so within the foreseeable future.we have no evidence that the USSR has equipped the Chinese with surface-to-surface ballistic missiles There arc indications,that the Chinese may have received some Soviet air-to-air missiles.

o are almost certain that the Chinese Communist desireuclear weaponsand Soviet reluctance to provide the Chineseapabilityajor issue ir. Sino-Soviet relations. The Chinesealmost certainly consider that aof their capability to produce nuclear weapons would confirm their claim to great power status, and they will probably carry their nuclear weapons program forward as rapidly as feasible.

ur evidence with respect to Communist China's nuclear program is fragmentary as is our information about the nature and extent of Soviet aid. In what we estimate to be the present state of Chinese Communistthe carrying out of fissionable materials production programs requires significantassistance in the form of technicians,and equipment. As we have estimated earlier, we believe that the Soviets have been movingeliberate pace in assisting the Chinese in the nuclear field, seeking to hold Chinese impatience and discontentevel consistent with the Soviet view of the best interests of the Sino-Soviet relationship.evidence strongly suggests that in the past the USSR has given the Chinesemore technical assistance toward the eventual production of nuclear weapons than we had previously believed likely. ThisIs insufficient to establish how much assistance has actually been given, althoughelieve the aid has been fairly substantia; and increasing over the years, at least until recently.

he USSR has provided Communist Chinauclear research reactor and isnuclear scientists In the Joint Institute for Nuclear Research in Dubna, USSR. The exploitation of native uranium resources has been underway, with Soviet assistance,t leasteposits are now being worked, and we believe that ore with ametal equivalent of several hundred tons is being mined annually and retained in China. The Chinese Communists haveinitiated the processing of uranium ores into metals, and this leads us to believe they *re currentlylutonium production

13

tor. Although there is no conclusivethere are strong indications that they miy also beaseous diffusion plant.

On the basis of the fragmentary evidence available, we now believe that the mostdate at which the Chinese Communists couldirst nuclear devicehough it might be as later as earlyependInj^uppn the actual degree of Soviet assistaneeWgGlven direct Soviet assistance in ftssiorJaoiedesigns, and fabrications, the Chinese coulduclear detonation in China at almost any time in the immediate future. On the other hand, ifesult of Sino-Soviet dissensions thereessening of Soviet assistance in the nuclear field, the Chinese Communist progress would be substantially retarded.

While the explosionuclear device would give the Chinese Communists political and propaganda rewards, they would almost certainly proceed to create an operational nuclear capability as quickly as feasible. However, at least two years would probably be required after the first test tomall stockpile of elementary weapons.given economic limitations and the reali-

ol geography, they would probably rely initially on aircraft as delivery vehicles. Theyew puton medium bombers of the DULL type, which could reach Japan. Taiwan. Okinawa. South Korea, and South Vietnam, as well as additional areas in Southeast Asm In addition we believe that5 they mayubstantial number of jet medium bombers, assuming continued Soviet

The Chinese Communist missile program, wr believe, is ln the early research and de-velopment phase. The initial productionwill probably be air-to-air rocketsimple type of radio or infrared guidanceWe believe that they will also goas rapidly as they are capable with the development of ballistic missiles, probablyin the first placeissileangem, capable ofission warhead. Such missiles would give them coverage of most of the targetsabove If deployed in Tibet, suchwould also give coverage of the major cities of northern India. We believe that they could develop such missiles by thea or, with considerable Soviet assistance, much earlier. We do not believe they could, by themselves, producem. missileto giveapability against the US until well

Trends in the Military Forces. In addition to pushing its program touclear capability. Communist China will probably continue to increase its conventional military cspabiUty over the next five years The rate of increase in Communist China's militarywill be determined in large part by the economic demands of the regime's overalldevelopment program and by theand extent of Soviet assistance.

5 the Chinese Communist leaders will be more aware of the implications of nuclear weapons and this may have someon their strategic thinking. However, Communist China will probably stillass army. The offensive and defensive capabilities of tho air force and naval air force will probably have improved considerablyheir jet fighter strength will gradually increase and higher performance aircraft will

14

introduced Offensive strength may beenhanced by the introduction of jetbombers. Although Communist China'j aircraft industry is becoming less dependent upon imported components. Its assembly and production program is still dependent upon the Soviets for original blueprints, technical assistance, and training, and for the more complex electronic and specialized equipment. At present Chinese factories are turning outs andight piston(COLT) per month. ircraft and engine production will probably build up to about IS per month We believe that the Chinese Communists are planning to build BADGERnd, or CAMELhe transport version) aircraft. continued Soviet assistance, we estl-mste that production could begin in the last quarter The Chinese Communist Navy will also increase in size and improve its capabilities over the next five years. The shipbuilding industry will almost certainly continue to grow, producing additional and Improved ships, primarily of Soviet design, for both the navy and the rapidly Increasing merchant marine. Naval construction will Include submarines as well as surface ships no larger than destroyers.

D. Summary

espite the difficult problems the regime will encounter, domestic developments during the next five years wintronger base tor the regime's pursuit of its ambitiousIts economic dependence upon the rest of the Bloc will be considerably reduced and its military dependence, though sUU criticsl In some respects, will lessen somewhat.throughout the period the effective striking range of its military forces wlil be limited to nearby Asian countries, Pelping's

' We believe tliat the Mukden aircraftroducingirframes and engines from domestically producedhe metal-lur(ileal industry in Communist China has not yet mastered the technology involved inand fabricating the high-grade and high-temperaturechrome and nickelIn the manufacture of Jet engines Such alloys must still be imported from Bloc countries

S E

ET

lo assert international Influence will increase. Peiping's growing impact on world affairs will be greatest In the political Meld. Its capabilities in economic warfare will also increase, but not to the same extent. The steady growth of the domestic base willencourage continued confidentof the regime in striving for the rapid advancement of Communist China'sposition.

INTERNATIONAL

II. COMMUNIST CHINA'S POSITION

A. Peiping's View of the World Situation

he Chinese Communists tend to have an astigmatic view of the world and of their own position in it. This distorted Image is due in part to their limited exposure to the outside world. Probably of more importance, however, is their tendency toicture of the world that gives continuing validity toown revolutionary experiences andjustifies the policies they feel they must pursue to solve their special domestic and international problems, and remains true to certain fundamental Communist precepts. Some of their foreign policy actions continuedemonstrate considerable pragmaticand they probably overstate some of iheir views for polemical purposes.their Interpretation of worldseems totrong doctrinaire and China-centric bias, leading Peiping to an overly optimistic appraisal of thefor communism In general andChina In particular.

n their picture of the world, the Chinese Communists see the alliance of the anti-Communlst "imperialist" nations as weakened and divided and the US as frustrated and near-Jig political bankruptcy In world affairs. Since the advent of Sputnik inhe Chinese have apparently believed that Soviet weaponry developments have tipped the balance of world military power to the Bloc. They also appear convinced that the Bloc has surpassed the West in politicalIn many areas of the world and wiP.

overtake the West in economic powerew years.

The Chinese Communists appear to view the uncommitted and underdevelopedas providing the greatest opportunity to hasten the collapse of the capitalist world. They portray the peoples of Asm, Africa, and Latin America as increasingly restive and disillusioned with their governments and with Western imperialism. They appear convinced that the time has come to encourage andnationalist and Communist revolutions in these areas. This, they apparently believe, would Isolate the US. lead to theof its alliance system, and deprive it of essential markets and raw materials.

With this view of the West on the run and the peoples of the uncommitted countries turning toward the Bloc, the Chinese have apparently concluded that unremitting Bloc pressure must be maintained, particularly on the chief enemy, the US, and that the world situation is ripe for exploitation by bold and militant Communist policies, evenisk of war is involved. Accordingly, during the past year, the Chinese have argued with vigor that: (a) the unchanged andnature of "imperialism" will inevitably breed new wars as the imperialist nations are pressed to the wall; (b> serious negotiation with the West is foolhardy. Inasmuch as any detente or lessening of tensions would only provide thereathing space in which further to increase Its preparations for war, and moreover would confuse the people of the world and lull their will to flght against imperialism; (c) emphasis should be placed on supporting revolutionary leftistrather than on wooing nationalistic bourgeois governments; and (d) Bloc policy should not be seriously inhibited by fear of war. becauseuclear war would not be disastrous. Indeed, the Communistclaim to believe that the horrors ofwar are overrated, that atiUlon Chinese would survive, anduclear war would result in the universal triumph of communism.

B. Sino-Soviet Relation!

These Chinese Communist views of the world situation and Peiping's eflorts tothem within the Blocime when Soviet leaders wereore moderate policy emphasizing economic and political competition and minimizing risks of war. ledharp dispute betweenand Peipmg. Aboutook the oflensive and has sincestrong pressure on Peiping. Moscow has intensified public attacks on Peiping's "dogmatism" and "narrowt has also Insisted, although in some cases unsuccessfully, that other Communist parties around the world back the Soviets in theHowever, the Chinese have not dropped their criUcisms of the Soviets or abandoned their views, and have indeed hinted that they are prepared to rely on their own resources, if necessary, for future economic development.

A number of fundamental issues are at stake Ln the dispute. Foremost is Peiping's challenge to Soviet dominance of International communism. Contributing to this are sharp differences on the basic nature of Bloclash of Russian and Chinese national pride, and the personal prestige of Mao andIn short, the controversy has achieved such momentum and involves such basic issueserious strain has

Nevertheless, the cohesive forces in the alliance remain strong. Moscow andcontinue to share common broadand the recognitionommon enemy and of the many strategic advantages they derive from their alliance. There Iscertainly an acute awareness on both sides of the serious damageontinued breach would Inflict on their respective na-

"The Judgments in this, section appear to bowith such information as we now have the recently adiourncd conference

16

tionai interests and on the prospects ofcommunism. In addition, while the Soviet leaders cannot condone Chinese obstinacy or accept Chinese policy preferences without weakening their control of themovement, they cannot allow an overt and formal breach to occururther serious loss of Influence over the Chinese and without gravely weakening the international Communist movementhole Theon the other hand, despite theirzeal and arrogance, need theeconomic, political, and militaryof the Soviet Union to achieve theirforeign and domestic goals. Moreover, there is strong pressure from the otherpartiesesolution of the dispute.

since the Sino-Sovietinvolves such fundamental issues,to us virtually impossibleeturn to the relationship ofwith the Soviets dominating aalliance. On the other hand, anformal breach like that between theYugoslaviahile possible,Consequently, we believe thatagainst the West will holdthat the estrangement will continue,and downs as new issues arise. Evennominal Sino-Soviet accommodationthe bitterness and suspicionsby the present dispute willcolor the Sino-Soviet relationshiptrust the other as fully as before,coordination will be more difficult.not necessarily within theproblems inherent in thecould lead to even more seriousSino-Sovlet relations.

C. Communis China's Foreign Relations

Its arrogance and tough talk,Peiping has been followingpolicies during the past year.contradiction suggests thatCommunist policy is neither Irrational

inflexible. One of Mao's fundamental

ET

has beenotal and irrevocable commitment of forces should not be madethere ts overwhelming superiority over the enemy. Mao and his colleagues arecertainly aware that Communist China does not possess such superiority at present

he gap between Communist China's words and actions probably corresponds to the gap between its ambitions on the one hand and its own present power position on the other. Communist China's foreign policy will reflect this gap. with both tough and moderate tactics continuing to be applied, at times with little apparent consistency, to the various opportunities and challenges at hand. Though Peiping willose of sweet reasonableness In many instances, we do have some concern that Peiping'sself-confidence and revolutionary fervor may Increase the danger of Chinesein Asia

olicy Toward, the VS. The most intense element In Peiping's foreign policy Ishostility toward the US. TheCommunists view the US as the major obstacle to their own ambitions and to the general expansion of Communist power and influence In the world- The Chineseleaders have made the US the symbol of evil andhate-America"within China which at times hasear-frenzied pitch.

till beingeal sense outside thepolitical arena and unable tothe US militarily or economically,has attempted to undercut US power and influence in the Par East, concentrating Its pressures against the offshore Islands. Taiwan. Southeast Asia, and Japan. Thus far.Communist China has won no clearin these areas, and has not been able to Increase its own power and Influence as rapidly as lt has hoped. Especially evident In Chinese Communist foreign policyreat element of frustration caused by US denial to Peiping of both Taiwan and acknowledged world statusear-great power whichChina.

V

hef Peiping's "hate-America" campaigffevolves around the Taiwan issue. Peiping has never deviated from its views that the Taiwan question Is purely an internal Chinese matter and that, consequently, support of the Nationalistis "foreign intervention" andagainst Communist China Peiping will almost certainly not change its objective or views with respect to Taiwan and willvehemently opposedtwo China" solution. It almost certainly will notthe use of force in the Taiwan area and will continue to maintain that the only peaceful solution would be for the US toits military commitments to theand its military forces from thoStrait area.

The Chinese Communists are not likely to attempt to take Taiwan by force In the face of strong US defense commitments to thePeiping probably believes that the continued strengthening of Its International positioneterioration of the situation on Taiwan will eventually lead to the collapse of the Nationalists and the recovery ofHowever. Peiping Is anxious to speed up the process of acquiring Taiwan.

Accordingly, we believe that the Chinese Communists will againigh level of military pressure in the Taiwan Strait area, within the next year or so The form andof this pressure cannot be predicted with assurance. We believe that it will bea probing action designed to test again Nationalist strength and morale and USconcerning the defense of the offshore Islands and to exacerbate relations between the US and Its allies. This action, however, will probably beevel below that which Communist China estimates would lead to major hostilities with the US. The Soviet

lei

Sino-Sovtet Relofiom "

These Chinese Communist views ol the world situation and Peiping's efforts tothem within the Blocime when Soviet leaders wereore moderate policy emphasizing economic and political competition and minimizing risks of war, ledharp dispute betweenand Peiping. Aboutook the offensive and has sincestrong pressure on Peiping. Moscow has intensified public attacks on Peiping's "dogmatism" and "narrowt has also Insisted, although In some cases unsuccessfully, that other Communist parties around the world back the Soviets in theHowever, the Chinese have not dropped iheir criticisms of the Soviets or abandoned their views, and have indeed hinted that they are prepared to rely on their own resources, if necessary, for future economic development.

A number of fundamental issues are at stake In the dispute. Foremost Is Peiping's challenge to Soviet dominance of international communism. Contributing lo this are sharp differences on the basic nature ot Bloclash of Russian and Chinese national pride, and the personal prestige of Mao andIn short, the controversy has achieved such momentum and Lnvolvcs such basic issueserious strain has

Nevertheless, the cohesive forces in the alliance remain strong. Moscow andcontinue to share common broadand the recognitionommon enemy and of the many strategic advantages they derive from their alliance. There iscertainly an acute awareness on both sides of the serious damageontinued breach would Inflict on their respective na-

The Judgments in thtasecUon appear lo Bewith such Information as we now bavet?ntly adlourneil conference

tional interests and on the prospects ofcommunism. In addition, while the Soviet leaders cannot condone Chinese obstinacy or accept Chinese policy preferences without weakening their control of themovement, they cannot allow an overt and formal breach to occururther serious loss of influence over the Chinese and without gravely weakening the international Communist movementhole. Theon the other hand, despite theirseal and arrogance, need theeconomic, political, and militaryof the Soviet Union to achieve theirforeign and domestic goals. Moreover, there is strong pressure from the otherpartiesesolution of the dispute.

since the Sine-Sonetinvolves such fundamental issues,to us virtually impossibleeturn to the relationship ofwith the Soviets dominating aalliance. On the other hand, anformal breach like that between theYugoslaviahile possible,Consequently, we believe thatagainst the West will holdthat the estrangement will continue,and downs as new issues arise. Evennominal Sino-Sovtet accommodationthe bitterness and suspicionsby the present dispute willcolor the Sino-Sovtet relationship.trust the other as fully as before,coordination will be more difficult.not necessarily within theproblems inherent in thecould lead to even more seriousSino-Soviet relations.

C. Communist China'* Foreign Relations

its arrogance and tough talk,Peiping has been followingpolicies during the past year.contradiction suggests thatCommunist policy Is neitherInflexible. One of Mao's fundamental

ET

ET

has beenotal and irrevocable commitment ol forces should not be madethere Is overwhelming superiority over the enemy. Mao and his colleagues arecertainly aware that Communist China does not possess such superiority at present

The gap between Communistords and actions probably corresponds to the gap between its ambitions on the one hand and its own present power position on the other. Communist China's foreign policy will reflect this gap, with both tough and moderate tactics continuing to be applied, at times with little apparent consistency, to the various opportunities and challenges at hand. Though Peiping willose of sweet reasonableness In many Instances, we do have some concern that Peiping'sself-confidence and revolutionary fervor may increase the danger of Chinesein Asia

Policy Toujortt the US. The most intense element in Peiping's foreign policy ishostility toward the US. TheCommunists view the US as the major obstacle to their own ambitions and to the general expansion of Communist power and influence in the world. The Chineseleaders have made the US the symbol of evil andhate-America"within China which at times hasear-frenzied pitch.

Still beingeal sense outside thepolitical arena and unable tothe US militarily or economically,has attempted to undercut US power and influence in the Far East, concentrating its pressures against the offshore islands, Taiwan. Southeast Asia, and Japan. Thus far.Communist China hss won no clearin these areas, and has not been able to Increase Its own power and influence as rapidly as it hss hoped. Especially evident in Chinese Communist foreign policyreat element of frustration caused by US denial to Peiping of both Taiwan and acknowledged world statusear-great power whichChina.

hen|^MSuch of Peiping's "hate-America" campaigrTTevolves around the Taiwan issue. Peiping has never deviated from its views that tho Taiwan question Is purely an internal Chinese matter and that, consequently, support of the Nationalist gov-eminent is "foreign intervention" andagainst Communist China. Peiping will almost certainly not change its objective or views with respect to Taiwan and willvehemently opposedtwo China" solution. It almost certainly will notthe use of force in the Taiwan area and will continue to maintain that the only peaceful solution would be for the US toits military commitments to theand its military forces from theStrait area.

The Chinese Communists are not likely to attempt to take Taiwan by force in the face of strong US defense commitments to thePeiping probably believes that the continued strengthening of its international positioneterioration of the situation on Taiwan will eventually lead to the collapse of the Nationalists and the recovery ofHowever. Peiping is anxious to speed up the process of acquiring Taiwan.

Accordingly, we believe lhat the Chinese Communists will againigh level of military pressure in the Taiwan Strait area, within the next year or so. The form andof this pressure cannot be predicted with assurance. We believe that lt will bea probing action designed to test again Nationalist strength and morale and USconcerning the defense of the offshore islands and to exacerbate relations between the US and its allies. This action, however, will probably beevel below that which Communist China estimates would lead to major hostilities with the US. The Soviet

18

of the US response would be the keyetermining the nature of any prior Soviet commitments to the Chinese and of the restraints the Soviets would seek to impose upon them.

Communist China and the UN.China has made no concerted drive of its own for membership in the UN. but has relied upon the Soviet Union and several neutralist nations of the Afro-Asian group to present its case. Communist China wants the China seat at the UN bothymbol of recognition of its big power status,low to the Chinese Nationalists, andajor defeat of US policy Peiping would almost certainly refuse toeat under any arrangement which provided for continued Nationalist Chinese representation. The future policy of the USSR with respect to the UN is not entirely clear, and Moscow may seek to use theissue to embarrass the organization and the US. In any event, the ChinaIssue will probably become acute next year, since it now appears that the US will have serious difficulty in maintaining the moratorium.

PoficiM in Asia. Peiping's policies In Asia have notonsistent line At the Bandung Conferenceheir hard, millpproach gave waypeacefulline.8ard line in Indonesia. India, Japan, and the Taiwan Straits. Apparently realizing they had pushed too hard, theCommunists have again shifted backtheoexistence theme: they have accommodated Burma in settling the border Issue, concluded friendship treaties with Burma. Nepal, and Afghanistan, revived proposals for an Asian peace pact and atom-free zone, andess adamant andattitude toward India and Indonesia Peiping's less belligerent approach towards its Asian neighbors has occurred at the very time that Peiping has been trumpeting for aCommunist world policy and almost wrecking Its relations with Moscow in the process

n Asia. Japanriority target forThe immediate Chinese objective Is to weakenies with the US and toJapanese neutralism. Peiping gave strong propaganda support and some covertaid to the demonstrations in Japan against the security treaty, and probably believes that its efforts contributed substantially to theof President Eisenhower's visit and the resignation of the Kishi government. The most significant Communist assets, frompoint of view, are the neutralistin Japan and the continuing widespread belief among Japanese that more normalwith mainland China are necessary for Japan. As it has in the past, Peiping may miscalculate Japanese reactions to attempts to Influence Its policies. However, unlessoverplays its hand, an increase in Slno-Japanese trade and cultural relations Isand the establishing of diplomaticis possible within the period of this

ommunist China's growing power willthreaten the stability andof the states of Southeast Asia. In spite of Communist China's militant view of the world situation, we do not believe that Peiping Intends to advance Its aims In Southeast Asia by overt aggression with its own troops, or those of North Vietnam (DRV).depending on the circumstances, themight sponsor the committing of DRV troops, or commit Chinese "volunteer" troops, in the event of US or SEATO militaryin the Indochina states area. Peipingcertainly believes at the present time that much of Southeast Asia can eventually be subverted without need of Chinese or DRV Invasion, and will almost certainly continue clandestinely to supply equipment, training, and funds to Communist movements In the area. Peiping also mayreater degree of dlreftlon of these movements than It now appears to enjoy, and its militant outlook may accordingly be reflected in increasedactivity on their part. In any event, awareness of the growing power of Communist China will probably cause certain Southeast Asian governments and leaders to become

SEjBfJTET

responsive than they now are to Bloc pressures.

Unsatisfactory relations with India now constitute one oi Peiping's major policyInproblem for which it can find no easy solution. The border dispute is not likely to be resolved soon, although ansettlement may be achieved Involvingrecognition of India's claims In NEFA and Chinese retention of the area it nowin Ladakh. Even ifettlement is reached. Communist China's relations with India are likely to remain cooland their rivalry in Asia is likely to Ii "IH

Policies Elsewhere. Peiping has beengreat attention to Africa. In the past year Communist China has continued to give strong support to the Algerian revolutionary regime. Itreaty ofradeandillion credit to Guinea during President Sekou Toure's visit to Peiping. Chinese Communist trade and cultural delegations haveumber of new African countries. To date, Pelping'shave not met with conspicuous success in terms of diplomaticowever, the failure of any of the new African states at0 General Assembly session tothe US-sponsored moratorium on UN consideration of Chinese representationcertainly buoys Pelping's expectation of future African diplomatic support. TheCommunists undoubtedly also estimate, not without Justification, that the confusion, inexperience, anticolonialist sentiment, and racialism which exist in Africa can benot only for Communist, but forCommunist benefit. Increasing Chinese activity Is likely and it will constitute asource of Sino-Soviet friction.

t obtained Ttcwnltion from Guinea, Ghana, and Mall. Of thafrican naUoni which have achieved Independenceai recognizedave recognised the QRC. and the remainingare taken no formal stand. Ttarcnighout Africa and the Middle Eaat.tates recognise Peiping.cognize the GRC. andecognise neither.

In general, Communist China hasits efforts In the Arab World Itswith several of the countrieshe area, notably the UAH. have cooled. Peiping ap-pears to have switched interest to Africa, and its Influence in the Middle East Is likely to rise more slowly than in Africa.

in the last several years, the Chinese Communists have greatly stepped up theirin Latin America. They have been particularly busy in Cuba and havereaking of Cuban relations with theof China and the establishing ofrelations with Peiping. The Chinese Communists apparently pin their hopes ln Latin America moreelief thatand anti-US sentiment will increase, than to any expectation of soon establishing friendly relations with existing governments other than that of Havana. Peiping willcertainly further Increase its activities In Latin America and may wellrowing appeal, due in part to China's rapid economic progress from underdeveloped status.appears even now to have assumed, or been accorded, an increasing role in theof Communist movements In Latin America.

oreign Policy Outlook

espite their impatient and bellicosewe do not believe that the Chinese Communists plan to initiate overt military action in non-Communist Asia in the nearexcept perhaps in the Taiwan Strait (as discussed inbove).probably believes present trends inareas generally are moving along lines favorable to Chinese Communistand objectives. However, they areto speed up these trends. Whilea belligerent stance, the Chinesewill probably continue to follow policies which they estimate would not run high risk of war with the West, unless they have the backing of the USSR. However, Communist China will probably not hesitate to act tough from time to time, seeking to Impress upon the people's of Asia its growing power and presence. At the same time, the Chinese Communists will probably be increasingly

S E

responsive than they now are to Bloc pressures.

Unsatisfactory relations with India now constitute one of Peiping's major policyInproblem tor which it can And no easy solution. The border dispute is not likely to be resolved soon, although ansettlement may be achieved Involvingrecognition of India's claims in NEFA and Chinese retention of the area it nowin Ladakh Even ifettlement is reached. Communist China's relations with India are likely to remain cooland their rivalry in Asia likely r

Policies Elsewhere. Peiping has beengreat attention to Africa. In the past year Communist China has continued to give strong support to the Algerian revolutionary regime. Itreaty ofradeandillion credit to Guinea during President Sekou Toure's visit to Peiping. Chinese Communist trade and cultural delegations haveumber of new African countries. To date, Peiping'shave not met with conspicuous success In terms of diplomaticowever, the failure of any of the new African states at0 General Assembly session tothe US-sponsored moratorium on UN consideration of Chinese representationcertainly buoys Peiping's expectation of future African diplomatic support. TheCommunists undoubtedly also estimate, not without Justification, that the confusion, inexperience, anticoloniallst sentiment, and racialism which exist in Africa can benot only for Communist, but forCommunist benefit. Increasing Chinese activity is likely and it will constitute asource of Slnc-Soviet friction.

t obtained rWIUBiuuon from Guinea, ahana. and Mali. Ot thefrican naUons which have achieved independenceas recognisedave recognized the ORC, and the remainingave taken no formal *tand. Throughoul Africa and the Middle Sail, to ita Lei recognize Peiping. IS recognize the QRC. andecognize neither.

In general, Communist China liasits efforts in the Arao World- Itswith several of the countries in the area, notably the UAR. have cooled. Peipingto have switched interest to Africa, and its influence In the Middle East is likely to rise more slowly than In Africa.

In the last several years, the Chinese Communists have greatly stepped up theirin Latin America They have been particularly busy in Cuba and havereaking of Cuban relations with theof China and the establishing ofrelations with Peiping The Chinese Communists apparently pin their hopes In Latin America moreelief thatand antl-US sentiment will increase, than to any expectation of soon establishing friendly relations with existing governments other than that of Havana. Peiping willcertainly further increase its activities in Latin America and may wellrowing appeal, du* in part to China's rapid economic progress from underdeveloped status.appears even now to have assumed, or been accorded, an Increasing role in theof Communist movements In Latin America.

D. Foreign Policy Outlook

their impatient and bellicosewe do not believe that theplan to initiate overtin non-Communist Asia in the nearexcept perhaps In the Taiwan Straitinbove).probably believes present trends Inareas generally are movingfavorable to Chinese Communistand objectives. However, they areto speed up these trends. Whilea belligerent stance, the Chinesewill probably continue to followthey estimate would not run highwar with the West, unless they haveof the USSR. However,will probably not hesitate to acttime to time, seeking to Impresspeople's of Asia Its growing powerAt the same time, thewill probably be Increasingly

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y.jtV- E

in encouraging and supportingleft-wing revolutionary movements throughout the underdeveloped world.aligned with the US will continue to be the objects of periodic Chinesevilliftcation and pressure.

We believe that once Communist Chinauclear device, and particularly when ttuclear weapons capability, its foreign policy will become more truculent anduclear explosion would alsotrong impact on otherThe dominant reaction wouldear that the chances of war had Increased, and there would be stronger pressures for full acceptance of Communist Chinaember of the world community. While somein Asia would increasingly look to the US to provide the counterbalance toChina's military strength, there would alsoeightened IncllnaUon towardwith Peiping.

Even before the explosionuclear device. Peiping's military power and potential may increasingly complicate the international disarmament problem. If Westernnegotiations with the USSR make sig-

nificant progress, international pressures will probably grow greatly for Communist China's participation. Peiping's leverage withto disarmament will become even greater once China hasuclear power. Peiping will exploit this situation in an effort to enhance its international status, but at the same time may attempt to prevent the conclusion of any disarmament agreement, at least until Ituclear power

5 Communist China will be playing more fully the roleeading world power, whether or not Itember of the UN-Its stature in Asia will have grown, and its military, economic, and subversive pressures will increasingly threaten the non-Communist Asian periphery. Peiping's policies will have rangedelatively moderateand outright toughness, but Intense hatred for the US and an eagerness to push the Communist world revolution will probably still be dominant elements of Peiping'sCommunist China's arrogance andwill almost certainlyource of concern for the USSR. At the same time the danger posed by Communist China to US interests, particularly in Asia, will have

APPENDIX I: SCIENTIFIC AND TECHNOLOGICAL

Education in China is now closely focused on the technological needs of the state. Outotal oftudentsfrom college bynere in scientific and technological fields. However, the quality of scientific and technical education in China Is still poor, and the training of most graduates in recent years has been along very narrow specialized linesuit them for creative ordevelopments in their fields.ery few highly trained scientists areprobably aboutost of them Western-trained.0 researchers and technicians in all are employed byorganizations. There also Is anbut probably much higher number of technically trained persons engaged indevelopment or other technical work primarily related to production.most new. high-caliber scientific and technical personnel arc those trained in the USSR, but5 the Chinese program should be producing some well trained men.

he major Chinese effort over the next five years therefore will be devotedcientific and technological base while channeling their present capabilities into areas essential to nationalimprovement of the food supply, public health, heavy industry, and military technology. During this period, they will need and will continue to procure foreign technological aid and exploit Western and Soviet Bloc designs and practices.

he expanding biological and agricultural research and development programs related to food supply are not likely to Improve greatly, but some gains in agricultural out-

oughly two percent of 'he number available In the USSR

put will probably result from the institution of modern practices. Achievements in health have been impressive In reducing infectious and epidemic diseases, but the level of health and individual medical care will remain poor. Areas important to raising the level oftechnology, such as chemistry andwill continue to show markeddespite vigorous efforts. Strongcapabilities are now emerging and.hinese capabilities should bethose of the more advanced European Satellites.

ilitary modernization is receiving strongair capability to produce most kinds of conventional armaments is rapidly emerging. Little effort is yet expended on fundamental research in military fields,Both naval and aeronautical research facilities are supporting production of aircraft and ships primarily of Soviet design and more advanced models probably will bein the next few years, still primarily of Soviet design. While we believe the present chemical warfare capability of Communist China is small and primarily defensive lnthere is recent evidence of increasing activity in this field. Some CW sgents are probably producedmall butresearch program is believed to beThere is Little evidence of activity in biological warfare. The Chinese areofodest BW programairly substantial CW programf they so desire.

n the atomic energy field, as In other fields, there ismall corps of highly qualified scientists, most of whom received their training in the US. UK. France, orAlthough they are probablyhampered by the administrative and training responsibilities which are Imposed

S EfjPR

them, they are capable of carryingwork in nuclear weapons design. In addition to stepped-up training at home.is expanding its nucleus of skilledby sending advanced students td the USSR and the Satellites, particularly to the Joint Institute for Nuclear Research at Dubna in the USSR

There is evidencerowing awareness in Communist Chinese scientific and military circles of the importance of guided missiles in modern warfare, and It can be assumed that an increasing amount of basic scientific effort in China is being directed toward thedevelopmentative missileThere are several outstandingCommunist scientists, some of whom are US trained in missile technology or related fields.

Because both the technical and industrial requirementsissile program are so great and so complex, and because of the lack of intelligence indicating anyof these requirementsuided missile capability, we believe that the Chinese Communists are not yet ready to engage in the testing or production of any type of guided missile. It is possible that they axe now in the theoretical or early planning stages.

are believed capable ofproducing unguided rockets for usewarheadsuch anis probable in order to providefor delivering large HE warheadsin excess of conventional artillery.

Chinese Communist official hasthe regime will .eventually launchsatellite, and there are indicationspersonnel are studying rocketwith Soviet assistance. Thevalue highly the political andgains resulting from aSoviet launching equipment, andguidance throughout the project.Chinese Communistsuccessful earthabout one or two years afterof the project. The satellite itself,scientific instrumentation, couldChinese design and manufacture.as yet. however, no evidence of theof any projects to launch earththe territory of Communist China.from Communist Chinaperiod of this estimate will be theof Soviet participation and thedo so would be based on political factors.

SEfSRET

APPENDIX II: RELIABILITY OF CHINESE COMMUNIST ECONOMIC STATISTICS

Chinese Communists, like theirmentors, have made it difficult Tor foreign observers to use official data inlear understanding of the workings of theThey have released only partial data and in various ways presented misleading comparisons in reporting economic production and activities. This requires that Chinese Communist statistics be viewed critically and in some cases substantially discounted.

8 observers have been facedomplication in the form of agricultural crop reporting which grossly overstatedproduction. Our analysis of Peiping's agricultural statistics47 indicates that they have been generallyand reasonably accurate. However, the patent Impossibility of the production claims8 has made lt necessary inagricultural developments, toseparate estimates based on evaluation of production factors, marketing and supply availabilities, and government policyWhile we believe our estimates arewith all of these various indicators, they cannot by their nature be considered precise.

We believe that political influences, which sought to justify the communes and to spur rural localities to greater production efforts, debauched rural statistical reporting89 and inhibited the central statistical authorities from modifying and rationalizing the local data. When the Chinesewithdrew their extravagant agricultural claims inhey lowered the figures for grain and cotton production by one-third. At the same time, production targets9 were correspondingly reduced. Even though top leaders, by their act of recantingeemed genuinely to want to face

facts, they took no effective measures topolitical domination of the ruralreporting system, which after9 harvests again proved incapable of providing even reasonably accurate crop yield anddata. Whether the reporting system of0 crops is still hopelessly corrupted by politics Is unknown. Moreover, even if it were obtaining reliable data, the regime would be reluctant to admit its exaggerations by publishing them.

Chinese statistics forlso became somewhat more difficult to Interpret, although the Leap Forward psychology of these years did not corrupt the official data for industry asas lt did for agriculture. Large-scale modern Industry, whichelativelyaccounting system providingaccurate data, contributed most of the increased Industrial output. Although the regime appears to have exaggerated theof small-scale, "native" industrial output, its magnitude was not such as to cause major distortions in the total production

Chinese Communist claims for theof several major industrialand for the performance of the modern transport sector have been evaluated bytheir consistency with the capacity of the Industry concerned and with inputs of labor and raw materials. In some instances, the existence of new plants or the expansion of old plants could be confirmed by reports of Western observers. In other cases it has been impossible to assess the practicalof claimed increases: for example, the quantity and quality of the three million tons of alleged steel produced in backyard furnaces

ET

SE

r the quality of the coal mined in the greatly increased production. In general, however, this evaluation suggests that the official claims of great achievements in industry and transportation are plausible. Our estimate that the overall value of Chinese industrial production increasedercent in

8 was made by weighing and combining the results of this evaluation of claims for individual industrial products. The estimate that industrial output wouldbyercent09 is based on0 production targets which wewill be substantially fulfilled.

S

APPENDIX III: TABLES AND MAPS

Table I

GROSS NATIONAL PRODUCT. BY END

Billion YuanMarket Prices - Percentage 3 8 9

Personal consumption expenditures

domestic Investment

foreign investment

1

purchases of goods and services

national product

5

1

The esumatei of GNP In7 prices are as follows (billion

Table rr

AGRICULTURAL AND NONAORICULTURAL

Million Persons

Percent Increase

1",

..

43

Mid-year figures. Figures Include civilian employment only

3T

Table III

COMMODITY COMPOSITION OF IMPORTS AND EXPORTS

Percentage Distribution by Maior Trading Areas

0

0

oc

-

products

1

1

and metals

5

*

products

1

3

3

0

-

products

J

products

6

and metals

1

and equipment

manufactured goods

other 'mainly Military goods)

do not necessarily equal sum of parts because of rounding

Table IV

PERFORMANCE OF MODERN FREIGHT

Sector

Ion-kilometers

3S4

land waterways

shipping

5

1

8

metric tons

carried

trucks .

3

waterways

shipping

0

S EmitT

Table V

THE CHINESE COMMUNIST GROUND FORCES

36

Armies

Divisions Infantry

lib

i-0

3 Infantryrtillery Regiment

ight and medium field artillery piecesedium mortars

1 AA battalion

light AA pieces

AA machineT battalion

m ATank-assault gun regiment"edium tank*

elf-propelled assault guns

a>

medium tanks

a*

each

heavy tanks

self-propelled guru

3

aa m

each

3

each

Artillery

14

each

pieces up to ISz-mm

Launcher

each

m muluple rocket launchers

z

AT guns

each

0ight and medium guns

&

gj

Oight and medium guns

security

TOTAL NUMBER OF COMBAT

IK

each

ananot shown In this Table.

S EGfcET

VI

CHINESE COMMUNIST AIR FORCE AND NAVAL AIR FORCE

Estimated OperationalJ0

NAVY AIR FORCE 0 0

Fighter

Jet

(Ftri

0

Bomber

Bomber

...

0

(Light i

10

.

0

10

econnaissance

(ASW)

10

(Pin

20

Table VTI

CHINESE COMMUNIST NAVY ESTIMATED SHIP AND PERSONNEL STRENGTH

11

Principal Combatant*

Destroyers (DDI 4

Escort Ship* 4

Submarine* (SS) It

1 Long-rangelass. 4

4

Patrol347

Mine 36

Amphibious Warfare

Auxiliary 48

Service

0 Naval Air Force)

S ErsteET

Original document.

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