NIE 13-60 - COMMUNIST CHINA

Created: 12/6/1960

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intelligence estimate

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Submitted by tha DIBFCrOB OF CENTRAL INTELLIGENCE

The foUosdng intelligence organisations participated (r. the preparation ol thu eittmatt; The Central Intelligence Agency airi the intelligence organization* of tha Departmcnti o/ State, the Amy. the Kavy, the Atr Force, Tha Joint Stag, and (A* Atonic Energy CommUiion.

Concurred tn by the

COMMUNIST CHINA

UJOTED STATES INTELLIGENCE BO ABO

ecember im. Ctmcwrlno toere The Director ol lateta-gence and aateareh, Department of State; the AsiUtant ChleJ of Stag for MtUigence, Department of the Amy; theCAW ot Haval Operation*epartment ol the Navy; the Asriuant Chiel of Staff, Intellteatce, USAF; the Director for Intelligence, Joint Staff; tht Atomic energy Comoitnton Rcpr6,entattoe to the VSIB; the AuUlsavt to the Secretary ol Detente, Special Operations; and the Director of the National Security Agency. The AstUtant Director, Federal Bureau ol Irrcattgatirm, abstained, the tubfcot bring

OutHdt ol hit jurisdiction.

CENTRAL INTELLIGENCE AGENCY

DISSEMDJATIOK NOTICE

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hs title of this estimate when used separately from thebe classified:

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en ot which In aflprohibited bj lai

DismuBtmof: wane k

KaUOnal Sccntr* Cornell

Dtpartmrot ot Derenae Optrauoni Coerdtaattrti: Beardnenrv CecornBslcn ftderal Burtau of inT^Ujartan

TABLE OF CONTENTS

Page

L

H_ DOMESTIC

Dependence on the

Population

Science and

The

The

Relatione Between the Party and the

Sino-Soviet Cooperation and Advanced

Probable Treads in the Military

HI. COMMUNIST CHINA'S INTERNATIONAL POSITION

View of the World

China's Foreign

Policy Toward the

Tne Taiwan

Communist China and the

Policies In

Policies

Policy

APPENDIX Ii SdenUnc and

APPENDIX II: Reliability of Chinese Communist Economic

APPENDIX III: Tables and

COMMUNIST CHINA

THE PROBLEM

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

CONCLUSIONS

leaders of Communist China are determined to makeeading world power as rapidly as possible. Over theears Communist China hu 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-confidence towards both the West and the USSR )

We believe that over the period of this estimate, Communist China's economy will continue to grow rapkly, especially in heavy Industry, althoughess rapid rateommunist 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 ol electric power, and It willerchant marine ofsize. It mil also have madeprogress towardod-era power In science and technology, though Its relative standing will remain well behind that of the advanced nations. However, If Slno-Sovlet 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 special irec technical knowledge. Communist China's petroleumwill grow rapidly during the next Ave years, and even the expected tripling

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of 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. Such devel-opmer.ts, however, 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'sorld power. In any case, we now see no serious threat, either internal or external, to the continuance ot 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 economicprogram 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 we 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 Parcertainly 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 luegrneni ot thb paragraph appear* to be corouunt with sueh information aa we now haie on the recently udjocmed 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 Pei-ping's policies will range between relative moderation and outright toughness.will probably again Increase Itspressures in the Taiwan Strait area. However, we believe that 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 Chinauclear weapons capability.)

before the explosion of aPeiping's military power andmay increasingly complicatedisarmament problem.will exploit this situation In anto enhance Ita internationalat the same time may attemptthe conclusion of anyagreement, at least until itnuclear power. (Para 9t)

ommunist China willmore fully the role of apower, whether or not It is aof the UN. IU arrogance,capabilities forource of concern toAt the same time the dangerCommunist China to US Interests,tn 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 Die situation in other Communist cuunUies.

espite these manlfeitations ofPeipingerious domestic weakness in agriculture and an external crisis In relations with Moscow.0 thediet Is stillrecariously low level and the regime has been unable to meet al] of ItsgsU'W* from the domestic harvest. The year has been even more con-spiciiousry marked by Peiping's open challenge to Moscow's authority tn the (Jommunist Bloc This action has brought upon Peiping thedisapproval of the USSR and most of the rest cf the Bloc and has raised the possibility that Bloc economic and technical support, which are essential tor China's rapid growthreat power, might be seriously reduced or even cut off.

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small group ol men who runChina have almost unlimitedtheir regime and country. Theythat China shall becomeas rapidly as possible, andbelieve that China willthe greatest nation In the world.in the reality and attainability ofhas led this handful of zealots toand to be prodigal with theenergies of the Chinese people; theyand coerced the workers andthe country toaximum of work infor minimal compensation andthe rapid growth in production willbring much greater materialleaders' themselves are Inspired by aof Communist idealism and ChineseThey promote communismChina on the road to power andexploit Chinese nationalism to hastenof communism.

II. DOMESTIC BASE A. Economic*

The Chineseas greatly acceleratedto catapult the country into thethe chief industrial powers in thetime.esult of this effortnational productfincreased by aboutercent inpercentnd aboutercentThe latter two years would haverises but for the abnormallywhich crippled agriculturaltremendous Input of labor and capitalwas concentrated upon tbeof tbe economy, especially heavystill labeled the "Great Leapthe regime's economic policies at the

'The Chinese Communists, she their Sonethave made It duscult for foreign observers to we ofnelai data Inlear under-icandlnc of the worHngs ot the economy. They have released only partial data aad In various "rays presented misleading comparisons lneconomic production and activities. This requires that Chinese Communist statistics be viewed eriucally and la sonic ess ttallr dlsconnted. See Appendix it end0 are relatively conservativeto tbe extreme programs

Despite Its successes Communist Chinaong way to go before becoming aindustrial power. Industrial production9 was less thanercent of that ofhile the general level of technology and the genera] quality of product in Chinesewere still far below the standards of the tadustriallsed nations of theercent 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.

Thus Communist Chinas economy faces the next Ave years with both greater assets and greater Uabilities, The economy Is now organised to sustain heavy investment, and the percentage of GNP invested, which rose fromercent7 to aboutercentill probably reach aboutercent int the same time, many seriousdifficulties will challenge the regime.

the Plrsl Five-Year Plan llses-iSwti the average annual increase tn ONP was seven

umber o( dUTtrecl methods may be employed to convert oneNP Into the currency of aiuT-nsr country lor purposes of comparlsoR Those dlffersnl rnetheda will fraajunUy yield widely differing results, particularly when tbe structures of tha tec* aooaomtaa are iu dimt as are Ihe tn acd Chinese aaceiamtas. Any one of the methods has dsfsct* In provtettag lelcr-aauonai comparison; thus tbesjurs should be regarded onlyoue* appfoaaeia-

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'Prices of capital geoda in China, where capital is scarce hi comparison to labor, are high cam-pared to prteaa of capital goods lo the US- II jivesUr.snt sera vslusd Inf ibr DS price structure. three percentage shares of inirslmemortion of Chinese OKP would ba reduced by about one-third, even so, Investment would still be an Impiwiiely high percentage of QNP. The higher prices for capital goods also lesultlightty higher growUi rale of ONP.

It Is probable, however, that the leaders will be able to 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 GNP will aver-ageoercent, provided the flow of equipment and technology from the rest of the Bloc continues.

ependence on the Btw 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, alehough it would sHU 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, huge 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 of Chinese planned needs5 (or tne following goods: equipment for smelting and refining of copper and aluminum, machinery for small and medium iron and steel furnaces and steel rolling milts, coal mininghe leas 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 seta.

Agriculture. Agricultural achievements58 provided opportunities for Instituting collectlvhialion and communahxa-tion, respectively. Tho real increases of food production8 wore 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 Communist method! 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 haa been greatlyby two suoceatlve 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 beIn addition, the regime has felt it necessary to supplement the food supply with city garden plots and an Intensiveprogram tc collect wild foods and fibers. Despite such moves, by the autumn0 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 tbe spring1 before the early summer harvests. The cotton crop has also

SECitET

fallen short, lemporatlly halting growth In the textile industry and bringing on even stricter rationing of cotton cloth.

he regime has belatedly comeeall-nttlon tbsl more effort and Investment are needed to enable agricultural production to keep up with growing demands upon it.the past three years Peiping has given increasing attention to agriculture. The share of capital Investment devoted to agriculture In the national budget has increaseditUeercent7 to nearlyercenthile under the cotnmune organ nation peasant investment has more than doubled tn the same period. In the latter part0 vigorous efforts were made to increase tlw labor force available In the countryside. Cadres and civil servants were sent to the rural areas and all nonproductive units such as teams for welfare, culture, and athletics were dissolved for the duration and sent to work In the agricultural "front Itnea."

1 should turn out tohird successive year of bad weather, the present food and export emergencies will be largely ended by1 harvest. Olven average weather, the regime will probably be able to meet its minimum needs for agriculturalfor the next five years and perhapsonsiderable time beyond that.there will probably beillion more Chinese to feed Inthane believe that the regime will invest enough In agriculture in the form a' fertiliser, lrrigaticn. mechanisation, and manpower io meet the Increased demand and. possibly, to providelittle 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 tbe balance between con turner needs and agricultural production will be aone. always subject to beingupset by tbe vagaries of weather and agricultural policy. Another poor crop year1 would probably force substantialin the development efforturther reorientation of Investment from Industry to agriculture,

opulation, We estimate Communist China's population intillion andillion Inhis population growth rateannually reflect* Uie effectigorous public health program that has Increased life expectancy from aboutears9 toearsn increase whichnations required abouiears to achieve in their demographic transitions. As athe population growth In the absence of curtailed fertility can be expected toleadingoubling ol the population in aboutean. However, the 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 pubBc morale In any event, the critics! 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 ultimate.

Jndusfry. Industrial growth over the last three years has been rapid but uneven. There were two great surges: one In tbe last half ofhe other covering the last quarter9 and the first quartern part these rapid increases resulted (especiallyreatly Intensified exploitation of China's greatest natural resource,People worked longer and harder, and rnflhone were added to the Industrial labor force. Existing plant facilities were utilised more extensively, and there waa greatof the fuel and raw material sectors, such as mining and building materials, which could use large amounts of urukilled labor

ot 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 Blcc, primarily the USSR. Many of these plants

SEOffKT

come Into production In the pest three years, and. startingow base Figure, the addition of the output ot these large lactoriej resulted In striking percentage Increases. Supplementing the increase ln output from the largemaller but appreciablehas come from the establishmentarge number of modern, small.lants using labor-intensive methods of production.

ndustrial productionaboutercentnd bypercente anticipate thattaOTaae will be aboutercentthat the production ol crudehas received cepacia] emphasii fromrose as lollowa (in millions of

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ipso (planned)

Production of crude steel In lOflO wasto level off at the rate of the last quarterrobably because It Is out of balance with roiling mill capacity and the rest of heavy industry. Coal production has risenillion tonsT to anillionlthough there hasrop In theutput of electric power has likewise more than tripled tn three3 billionillion kilowatt-hours. Other basic Industries have also increased greatly.

the production of crude oOChina increased7 to anhere have been Indications of ashortage In the latter partChina produces about half of theand petroleum products It uses andimports (primarily from the USSR)other half, including virtually all offuel 5 domestic crude oilion may reachillion tons, with agrowth In refining capacity. Even so, demand will probably have grown so much that Imports will be required touarter of tbe nation's needs of petroleum products.

Chinese efforts have been most effective when they concentrated on accelerating the Soviet-style program established in the First Five-year Plan and least successful when theyadical (Chinese) departure from this established program. Planning and tbe organisation of industrial production is likely to resemble more closely lhe Soviet model as the developmentomplex modernsociety progresses.

The rate of industrial expansion, however, although remaining high, Is expected toduring the next five yearsumber of reasons. Tbe recent practice ofarrow and simple product mix* will of necessity give way to greater diversity,and specialization. This greaterand complexity will require larger amounts of Investment and longer lead times between mvestment and the completion offacilities. Moreover, industrialwill declinehare of totalbecause agriculture andwill necessarily claim an Increasing share of Investment. Also, with materialfor workers and peasants continuing to be severely limited, Peiping will probably face difficulties In sustaining labor effort and tn increasing labor productivity.

Assuming 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 asercentIn heavy industry will expandfaster than light Industry, and by

places Communist China ahead ol the US and second only to the USSR tn coal production, but coal Is stui the mam source of energy In China. In petroleum, natural gas. and electric power, Communist China ranks tar down on the list ol producers.

Per example. China's steel industry nowonlyfew kinds of alloysimited number of rolled or extruded shapes. Aa the eccmomy turns lo tbe production of moretypes of sophisticatedide range of special alloysreat variety ol shapes will De recalled,

t will probably be more than three Urnes the IBM 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 half that

Although Peiping will probably increase Its investment In modem transport to enable an approximate doubling of capacityhis rate of 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-Stokiang 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 boih road and rail transport. It Is also expected that Communist China will greatly expand Itsmarine through construction and par-chase, and will probablyubstantial proportion of IU foreign trudo In IU ownChina'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 prxgrtrns.

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

Provided construction of thearge hrdroalec-Irlc projects now on the books proceeds on scheOule.5 China will be producing closeillionear, This Is more than the eetUnated combined production ol Che Knro-pean Satellites by that year and about the same at CS production

SS. In terms of quality and diversity ofhowever, Communist China will still be In the third echelon of Industrializable technological gap will still existChina and Japan, Evaluated in terms of per caplU OKP or by the standard of living of IU people, China will stillackward nation. Although the Income of the average citizen will probably have risen slightly above0 level, the per capita production of food and other consumer goods will not have risen sufflclenJy lo replace coercion andpressures an the chief spurs to

net and Technology' The Peipingconsiders scientific andof major importance inChinaorld power. Themaking significant progressear program to raise iUtechnological level In vital areas byeffort Is concentrated inroadfields, such as electronics andand at the sameeginningmade In aaeoclaUd fundamentalsuccess is already evident Intechnological areas, and we behovescientific and technologicalbe Increased significantlyChina's relative sUndlng willbehind that of tlte advanced nations,primarily becauseeneral lackmanpower, the most limitingthe Chinese effort.

olitioal

urther iltacaaslori of Communist China's science and technology appears In Appendix I, and nuclear weapons capablllUea are discussed lr. parociaph* BS-tl balow.

he members of theunlet Party (CCP) facein seeking to cajole and coerceand peasants to serve thethe regime has set- Such problemsacute for the working levelwho, whatever their energies orcaught between the demands ofleaders and the desires of thepeople. It Is they who have to spurpeasants and workers day after day.that they produce to the limitsendurance In return forrewards. The jmeitbn of these

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COMMUNIST CHINA

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COMMUNIST CHINA

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COMMUNIST CHINA

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parly cadres bas become even more difficult in the past three years as the partybas abruptly and repeatedly changed course. For example, the party leadersthat many of the original claims of advances made8 were exaggerated, and they suddenly abandoned the deep-plowing and backyard steol-makiiig 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 bas felt It necessary to infuse new enthusiasm and discipline into the party.

Various measures have been taken In an effort to gain the positive, enthusiasticof party members. Inmor.th period ending Inationwidewas undertaken lo relnvlgorate the party at the lower levels.illion new members were added, bringing the total membership to overhe 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.

Nevertheless, 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 subjectedontr drive directed against bureaucratism, corruption, and waste, and the transfers of cadres to the lower levels serves as another disciplinary tooL

Another effort to establish the absolute authority of the party hasationwide movement in the past year to have alland nonpartyupon Intensive study of the works of Mao Tse-tung, which have become canonized as "Ihe Ideology ofao 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 parlyand unity, this buildup of Maoreflects an outcropping of thenationalist pride and confidence In then' superiority as developers of Marxism-Lenin-Ism, and challenges the Kremlin byhinese as the foremost living Communist theoretician.

Although prolonged and acrimonious In-traparty debates have occurred In tbe 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-hual and Chief of Staff Huang K'e-ch'eng was probably the result of their questioning of party policies, and some others may have fallen from grace oross ofincluding Politburo members Ch'en Yun (economic expert) and Chang Wen-t'lenon foreign policy, tocluding Slno-Sovletn 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

It 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 Shoo-chl, appears to favor Mao's policies. Moreover, the tradition of party unity will still carry considerable weight However, neither Liu

nor any other successor would inherit Mao's personal authority and prestigeesult, there may be atemporary trendmore collective leadership, perhapscompromises on some controversial policies. Alternatively, it is possible that with the disappearance ot the centripetal force which Mao exerts, disagreements over policies or power struggles would become moreand serious, and the views of themilitary 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.

"The average age of COP PolUQuro men-Mrs Is over SO. Mao Is OT; Chrand Liu 8hae-*hl. shout ttl

The People. In general the attitude of the overworked, underfed people of Chinathe regime is probably best described as resignation. Bitterness Is widespread, but it fat impossible to say what proportion of the populace It characterltes. 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 an governmentby peasants. Hone of this, however, adds uperious threat to the regime. The watchfulness of the party, theof the secret police, and the haunting fear of informers preclude the organisation 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.

Executions 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 orless International disapprobation upon the regime. The use of overwhelming social pressures including accusation and confession meetingsrincipal device employed. An effective damper upon dlssldence Is alsoby the extreme degree of regimentation which is Imposed upon the people: they ha vent the tune, energy, or privacy toany kind of antiregjme activities. Two new devices of regimentation Introduced in the past three years aie the commune system and the universal militia.

The great economic promises which the regime made for the commune system have remained unfulfilled, but the system has been retained in diluted form throughout thepartly for social and political reasons.he housewife from household chores to work in the field* and factories, caring foe children In communal child-care centers, and feeding the people in communal messhalls have all worked to weaken the family and to improve opportunities forand indoctrination. It Is likely that during the period of this estimate the regime will move toward the reinstitutlon of some of the early commune features.

Social-political motivation Is even more evident In the case ol the urban communes. This program, which was postponed8 when difficulties were encountered, was finally launched in Marchnd by July the regime claimed that nearlyillion urban dwellers had been enrolled. The pattern of orgnnltatlon for urban communes is less standardised than that of the rural ones, but the chief characteristics appear to be theof communal messhalls and child-care centers and the release of women to various kinds of subsidiary industrial work. This unpopular program la of dubiousvalue, and It has brought few IT any real benefits to Its members. Like the rural commune, however, it improves the regime's capabilities for regimentation andThe use of service teams to do the housecieaningontinuingof the workers' quarters and their few personal possessions.

8 E

new militia organization isotcnc instrument of control.ody of militia outside the army has existed for many years, the present nationwidefor the militia datest that time it became an Integral part of the "Great Leap Forward" and communeFrom about rive million membershe organisation has grown tond Includes women as well as men. According to Mao, the militia Is not solely, or even primarily, an adjunct of the umy, but Is Intended to serve many purposes: military, labor, educational, and physical culture Tbe primary tasks of this greatly expanded militia clearly lie Inand political Adds 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 theot 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 tliat iove of the statear greater and more rewarding thing than love or 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 individuallsllc Chinese than most students of China had thought possible.

e believe it unlikely that anUregime activities will threaten the regime's ability to control and direct the country during the next Ave years. The Soviet experience of thes demonstrated that even mass starvation may not generate resistance that canuthless totalitarian regime. The 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 dissklence increase, theand pervasiveness of Peiping's control mechanism win also grow. Pelplng's chief problem wOl be not so much the suppression of dissidence as the overcoming of apathy, fatigue, and passive resistance, in any case, we now see no serious threat, either Internal or external, to the continuance of the regime.

C. Military

Oeneral. There have been no drama lie 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 industrialnd technical assistance from the US8K, and Soviet shipments ot 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 associatedodern and balanced conventional force.oviet shipments of militaryand machinery for Ihe 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 is capable of defeating any other non-Soviet Asian force or combination of forces. Aboutercent of them are assigned to the army, makinghe largest In the world. Into its traditional mission of defending Communist China, the army has important internal security, economic, and political

mah percentage o! tbtse are militarily etTMtlvr. See

"Sea charta and maps,f. for details eon-cernlne Chlnaw Communist military Krenetho ond dltpaihlMU.

functions. In fulfilling lis functions the army Is backed uparge trained rcscrreuge People's Militia.

A few select Militia units havaair degree of military effectiveness.on the whole, the militia lacks thetraining, and support that are required in tho 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 for ihe 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 lorce now has aboutdvanced fightersn tactical units. Its air defense capability has improved through modernisation of Its aircraft control and warning network and an intensified training program for fighter pilots. The air offensive capability liesight Jet bomber (BEAGLE/orce ofircraft,iston medium bombersndiston light bombershe Chinese Communist Navy (mcluding its air force) has an0 men. Its principal strengths arc its submarinehips, includingW"arge and effective motor torpedo boat force, and an extensive mlneiaying capability.

Relations Bet ween the PartyeCommunist China's senior military and political leaders have worked elosely 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 Is heldarly member whose background includesparty activity sincer lows. Until recently there bad been noof serious differences of opinion among the top leaders.

owever, 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 modernization versus economic development, party interference In professional military matters, and the constant involvement of the armed forces in nonmilltary 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.

ino-Soviet Cooperation and Advancedommunist China does not have ssissile 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, bu* even If Ihey hare, such weapons would almost certainly be held under strict Soviet custody. Tbe 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 are Indications,that the Chinese may have received some Soviet air-to-air missiles.

Sl Of NIBO, "Sfleo-Soviettagutiscuss Ihls queafflon In more detail.

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

Our 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 Wchroclans,and equipment. As we hare estimated earlier, we believe that the Soviets have been movingeliberate pace in assisting the Chinese in tbe 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 tbe past the USSR has given tbe 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, although we believe the aid has been fairly substantial 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 ln 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 are currentlylutonium production reactor. Although there Is no conclusivethere are strong indications that they may also beaseous diffusion plant.

SO. On the basil of the fragmentary evidence available, we now believe that the moatdate at which the Chinese Communists couldust nuclear devicehough it might be as later as earlyepending upon the actual degree of Soviet assistance"Olven direct Soviet assistance in fissionabledesigns, and lahrlcallcns. tbe Chinese coulduclear detonation In China at alrrsost any time to tha raunedrate future-On the other hand, ifesult of Sine-Soviet dissensions thereessening of Soviet assistance in the nuclear field, the Chinese Communist progress would be substantially retarded.

hile 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 aa feasible. However, at least two years would probably be required after tbe first test tomall stockpile of elementary weapons.given economic limit*lions and the reali-

rom Nixili-hood and Oonwjuenecs of the Development of Nuclear Capabilities by AdcUUdnalo see parairspbsof that ealtmataullsr dlstussloD of this question, aw also NIK IS-SflO. to be peblUhed in

"Tbe Assistant Chlif of Naval Operation* On-lelusjsocti.or the Navy, believes that ra'nnaUon on use nature ud eaten* of Soviet aid toChina is as yet tasaCa-efcalrCj.i'* eaUroete el the year In wtiiih tna Chinese Ceeaacsnutts eotie deieoasr adeilr* He considcrr atmcti. thatbasic evidence should have becameto oa by UUa Una It tha Chinesewert procresalne toward detonationroncWunj prodBicC nurMr device very much before the final state* ot this five-year asUrnate.

The Assistant Chief of Staff. Inteillaenee. uaAP, contingent uponf lhelevel of Soviet assistance, believes that the Chin ere wUI probably da tons t* their first nuclear dev.ee Innd possibly as aarly aa late ISM.

ties cf geography, ihey would probably rely Initially on aircraft as delivery vehicles. Theyew piston medium bombers of the BULL type, which could reach Japan, Taiwan, Okinawa, South Korea, and South Vietnam, as well as additional areas in Southeast Asia. In addition we believe that5 they mayubstantial number of Jet medium bombers, assuming continued Soviet

he Chinese Communist missile program, we believe, is in the early research andphase. The initial productionwill probably be alr-to-eir rocketsimple type of radio or Infrared guidanceWe believe that they will also go for-ward as rapidly as they are capable with the development of ballistic missiles, probablyin the first placeissileangeapable 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 thes or, with considerable Soviet assistance, much earlier. We do not believe they could, by themselves, produceun. missileto giveapability against the OS until well

reads in the flfi/if ary Forces. In addition to pushing its program touclear capability. Communist China will probably continue to Increase its conventional military capability 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 tbe 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 the air force and naval air force will probably have Improved considerablyheir Jet fighter strength will gradually increase and higher performance aircraft will be Introduced. Offensive strength may beenhanced by the Introduction of Jetbombers. Although Communist China's aircraft industry Is becoming less dependent upon Imparted 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 spcciahied equipment. At present Chinese factories are turning outnd is light piston(COLT) per month,ircraft and engine production will probably build up to abouter monthe believe that the Chinese Communists are planning to build BADGERnd/or CAMBLhe transport version) aircraft.continued Soviet assistance, wethat production could begin In the last quarterhe Chinese Communist Navy will also increase In slse and improve Its capabilities over the next Ave 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 rapidlychant marine. Naval construction will Include submarines as well as surface ships no larger than destroyers.

D. Summary

esptte the difficult problems the regime will encounter, domestic demlopenenU during the next Ave years willtronger base for the regime's pursuit of Its ambitiousIts ecccomlc dependence upon the rest of the Bloce considerably reduced and Its military dependence, though stUl critical in somell) lessen somewhatthroughout the period the effective sulking range of Its military forces will be limited to nearby Asian counurles, Peiping's

" We believe that the Mukden aircraft plant Is producingirframes and engine* from aomcitlcaUy produced oomponenu. ThtIndustry In Communist China has not yet mastered the technology Involved Inend fabricating the rush-grade and hlgti-tempcraturechrome and nickelIn the manufacture of jet engine* Such oUoya must stOl be imported from Bloc countries.

ability to assert international Influence will Increase. Peiping's growing impact on world aflairs will be greatest In tbe political field. Its capabilities in economic wartarc will aEso increase, but not to tbe same extent. The steady growth of the domestic base willencourage continued confidentof the regime in striving for the rapid advancement of Communist China'sposition.

OMMUNIST CHINA'S INTERNATIONAL POSITION

A. Pelping'* View of lhe 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 to their own 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 continue to demonstrate considerable pragmaticand they probably overstate some of their 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 theommuntet "imperialist" nations as weakened and divided and the US as frustrated and near-Ing political bankruptcy in world affairs. Since the advent of Sputnik inhe Chinese have apparently believed that Soviet weaponry developments have tipped tbe balance of world military power to the Bloc. They also appear convinced that the Bloc has surpassed the West In politicalIn many areas of tbe world and will 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 Asia, 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 tbeof 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 unccenmitted countries turning toward tbe Bloc, the Chinese have apparently concluded that unremitting Bloc pressure must be maintained, particularly on the chief enemy, tha US, and that the world situation Is ripe for exploitation by bold nnd 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 tn which further to Increase Its preparations for war, and moreover would confuse the people of the world and lull their will to fight 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 atillion Chinese would survive, anduclear war would result in the universal triumph of communism.

B, Sino-Soviet Relations"

These Chinese Communist views ol tho world situation and Peiping's efforts tothem within the Blocime when soviet leaders wereore moderate policy emphasizing economic and political competition and minimizing risks ol war, ledharp dispute betweenand Peiping. Aboutook the offensive and has sincestrong pressure on Pelping. Moscow has intensified public attacks on Peiping's "dogmatism" and 'narrowt has also Insisted, although ta some cases unsuccessfully, that other Communist parties around the world back the Soviets in theHowever, the Chinese have not dropped their criticisms of the Soviets or abandoned their views, and have indeed hinted that tbey 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 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 respecttve na-

" The Judgments In this section appear to bewith such InformsUoo as we now hare on the recently adjourned conference In Moscow.o, -stnO'Sovte'.ndf. "Mainonet capabilities and Policies,atedurtore detailed discussion of this subject.

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 Uruon to achieve theirforeign and domestic goals. Moreover, there is strong pressure from tbe otherpartiesesolution of the dispute.

since the Sino-Sovietinvolves such fundamental issues,to us virtually Impossibleeturn to tbe relationship ofwith the Soviets dommating aalliance. On the other hand, anformal breach like that between tbeYugoslaviahile possible,Corssequently, we believe lhatagainst 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 Slno-Soviet relationship.trust the other as fully as before,coordination will be more dlrueult.not necessarily within theproblems inherent In thecould lead to even more seriousSino-Soviet relations.

C. Communis! ChlncA Foreign Relations

Its arrogance and tough talk,Pelping has been followingpolicies during the past year.contradiction suggests thatCommunist policy ts neitherinflexible. One ol Mao's fundamental

SEC

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

The gap between Communist Chinas 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 Pelping willose of sweet reasonableness ln many Instances, we do have some concern that Peiping'sself-confidence and revolutionary fervor may Increase the danger of ChineseIn Asia.

Policy Toward the US. The most intense element in Peiping's foreign policy Ishostility towardbeCommunists view the US as tbe 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 andbate-America"within China which at times hasen-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 Par Bast, 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 It has hoped. Especially evident in Chinese Communist foreign policyreat element of frustration caused by US denial to Pelping of both Taiwan and acknowledged world statusear-great power whichChina.

asc

The Tahoanuch of Peiping's 'hate-America" campaign revolves 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. Pelping 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 cornrnitments 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 tbe 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 onshore 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

"The question of Taiwan and the likelihood ol renewed Chinese Communist military activity tn the Taiwan Strait area are considered la detail ln the toUox-uf estimates:, "The OffshorendChinese Communist Intentions and Probable Coursei of Action lo the Taiwan Straitatsd IS

ET

of the US response would be the key factor in determining the nature of any prior Soviet commitments to the Chinese and of tho rest: aunts the Soviets would seek to Impose upon therm

Commwtiit China and tht UN.China has made no concerted drive of ite own for membership In the UK, 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 tbe USSR with respect to the UN is not entirely clear, and Moscow may seek to use theissue to embarrass the organisation and the US. in any event, the Chinaissue wDl probably become acute next year, since It now appears that the US will have serious difficulty in maintaining tbe moratorium.

sia. Peiping's policies In Asia have notonsistent line. At the Bandung Conferenceheir hard, militant approach 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 weaken Japan's ties 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 Elsenhower's visit and the resignation of the Klshi government The most significant Communist assets, frompoint ol view, are the neutralistIn Japan and the continuing widespread belief among Japanes? 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, unless Pet-ping overplays its hand, an Increase In Sine-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 alms In Southeast Asia by overt aggression with its own troops, or those of North Vietnam (DRV).depending on the circumstances, tbemight sponsor the committing of DRV troops, or commit Chinese "volunteer" troops, in the event of US or SEATO militaryin the Indochina states area, rapingcertainly believes at the present time that much ol 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 communisthe area. Peiping also mayreater degree of direction of these movements than it now appears to enjoy, and Its militant outlook may accordingly be reflected in increasedicUvity 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

more responsive lhan they now are to Bloc pressures.

nsatisfactory relations with India now constitute one ol Pelplng's major policyInproblem (or 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 innd Chinese retention of the area it nowIn Ladakh. Even Ifettlement is reached, Communist China's relations with India are likely to remain cool snd their rivalry rn Asia is likely to intensify."

oU&tt 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, Pelplng'shave not met with conspicuous success in terms of diplomaticowever, the failure of any of the new African states at0 General Assembly session tothe UfiVeponsored moratorium on UN consideration of Chinese representationcertainly buoys Pelplng's expectation of future African diplomatic support. The Chi-nese Communists undoubtedly also estimate, not without justification, that the confusion. Inexperience, antlcolonlaUst 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.

uller Oueussloo ot thpie probessas, sre NIBateday iseo, and. The Outlook forated S3 October IPSO.

t obtained recognition from Guinea. Ortane. and MalL Of theUons which have achieved Independence daringas recognizeeave recognised the ORG. and the remainingave taken no formal stand. Throughout Africa and the Middle Bast,tates recognise Peiping,ecognise the ORC, andecogniie neither.

In general, Communist China hasIts efforts in the Arab World. Itswith several of the countries hi the area, notably the UAR. have cooled. Peipingto have switched Interest to Africa, and its influence tn 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 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.

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, tbe 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

active In encouraging anding revolutionary movements throughout the underdeveloped world.aligned with the US will continue to be the objects of periodic Chinesevtlrincatlon and pressure.

We believe that once Communist Chinauclear device, and particularly when Ituclear 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 inclination toward ac-connncdation with Peiping.

Even before the explosionuclear device, Peiping's military power and potential may increasingly complicate the international disarmament problem. If Westernnegotiations with tbe USSR makeprogress, 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 'his 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 theAsian 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 arrogar.ee 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

Ion in China Is now closely focused on the techno logical needs oi the state. Outotal oftudentsfrom college bynere ir scientific and technological fields. However, the quality of scientific and technical education in China is still poor, and the training of most graduates tn 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 arc employed byorganttatlons. 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 are those trained In the USSR, but5 the Chinese program should be producing some well trained men.

The 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 technolngical aid and exploit Western and Soviet Bloc design* and practices.

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

"Thti la roughly two percent of tho number available In th* USSR put will probably result from the institution of modem 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. Lit tit 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 win 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 inthere Is recent evidence of increasing activity In this field. Some CW agents are probably producedmall butresearch program Is believed to beThere Is little evidence of activity In biological warfare. The Chinese arecfodest 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

IK-E

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

here is evidencerowing awareness In comnrjnist 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 ir. China Is being directed toward thedevelopmentative missileThere are several outstandingCommunist scientists, same of whom are US trained in missile technology or related fleas.

ecause 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 ln the testing or production of any type of guided missile. It is possible that they are now in the theoretical or early planning stages.

They are believed capable of developing and producing unguided rockets for use with nonnuclear warheadsuch anIs probable In order to provide the means for delivering large HB warheads at ranges In excess of conventional artillery.

A Chinese Communist official has stated that the regime will eventually launch an earth satellite, and there are Indications that Chinese personnel are studying rocketwith Soviet assistance. The Chinese would value highly the political andgains resultingaunching. Using Soviet launching equipment, and with Soviet guidance throughout the project,Chinese Communistsuccessful earth satellite launching about one or two years afterof the project. The satellite Itself,scientific Instrumentation, could be of Chinese design and manufacture. There is as yet, however, no evidence of theof any projects to launch earth satellites from the territory of Communist China. Any launching from Communist China during the period of this estimate will be the direct result of Soviet participation and the decision to do so would be based on political factors.

sap#tT

lsVBT

APPENDIX II: RELIABILITY OF CHINESE COMMUNIST ECONOMIC STATISTICS

Chinese Communists, like theirmentors, have made It difficult for 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 Pelplng's agricultural statistics47 Indicates that they have been generallyand reasonably accurate. However, the patent impossibility of the production claims8 has made It 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 adroit Its exaggerations by publishing them.

hinese 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 It 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 tbeof small-scale, "native" Industrial output, Its magnitude was not such as to cause major distortions In the total production esti-

hinese 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 ot 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 tbe three million tons of alleged steel produced in backyard furnaces

8 or the quality of toe 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 la based on0 production targets which wewill be substantially fulfilled.

Agricultural

Miner* us

4J

loos looo laao ine

sb H3 03

InSurtrlol 3,

Aailcu:turaj

P.trolsum U 0 IM

aflacr^aw-euk" " " U

o-.her taanatiMM it iu ij

Anothermonryf parU becane of rounding.

Tattl IT

PCnroRMANCH or modern freightBS

im iw iw IW

Railroads

Motor.

Inland

ToMoarried

Railroads

Motor trucks

inland waterways Coastali

TOTAL

itmeWri

B

13

ar-

/'-

60C

ob:

9

THE CHINESE COMMUNIST GROUND FORCES

Stream

Total*

34

0

0

0

-

Infantry Regiments

Artillery Regiment

nd medium field artillery pieces

medium mortars

AA battalion

light AA pieces

AA machine guna

AT battalion

m AT guns

tank-assault gun regiment'

medium tanks

self-propelled assault Runs

each

medium tanks

heavy tanks

self-propelled guns

r

each

each

Artillery

14

each

pieces up to lK-ram

Launcher

each

m multiple rocket launchers

3

each

AT guna

5

t? B( light and medium gun*

e sz light and medium guns

security

17

each

NUMBER Ob" COMBAT DIVISIONS

includes support end mlsecl Inn ecus element? not shown In this Table.

-To date,f tha US infantry divisions are believed to have the lank-assault gun regiment, (in addition, tha ground forces Include approximately SBcombat regiments Including artillery, cavalry, tank, and public

' Counted for purposes of comparison or measurement af Una division strength, we consider, on this basts, that the Oblnese Communists have anine divisions.

righter

270

Use*

<Ftrj

0

0

Bomber

ISO

Bombe-

.

10

<,

10

nala an ce

)

10

20

690

vu

CHINESE CC'CIUNIST NAVY BSTIMATED SHIP AND PERSON-SSL ffTRBNQTH

11

SO0 Naval Air Force)

Com bat an la

Destroyer. (DDI

Escort Bblpe <de,

)

tassaaaa

Short-rana-a

Patrol

Mir* Warfare

Amphibious.

a.xl)

; -t> i.

4

Original document.

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