(EST PUB DATE) CHINA: SHORT-TERM IMPLICATIONS OF DENG XIAOPING'S DEATH

• Document Type: FOIA
• Keywords: CHINA
• Keywords: XIAOPIN 6
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0001024062
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• Document Page Count: 22
• Document Creation Date: June 24, 2015
• Document Release Date: February 22, 2011
• Case Number: F-2010-00738
• Publication Date: February 1, 1995

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(b)(1)
(b)(3)..
Intelligence Estimate
China: Short-Term Implications
of Deng Xiaoping's Death
APPROVED FOR RELEASE^ DATE:
02-07-2011
This National Intelligence Estimate represents
the views of the Acting Director of Central
Intelligence with the advice and assistance of
the US Intelligence Community.
Sec1et
Director of
Central
Intelligence
NIE 95-1
February 1995
Copy 4 9 09
 Director of
Central
Intelligence
China: Short-Term Implications
of Deng Xiaoping's Death
Prepared under the auspices of Ezra F Vogel,
National Intelligence Officer for East Asia. Inquir-
ies may be directed to Mr. Vogel
e
February I
 cret
Key Judgments
China: Short-term Implications
of Deng Xiaoping's Death
Deng Xiaoping's death will intensify political jockeying among senior
leaders to assume his formidable power and influence, but none is likely in
the next six months to fill Deng's unique role as elder statesman and princi-
pal power broker.
We believe all key participants, including the military, will try to prevent
succession maneuvering from jeopardizing domestic stability, policy conti-
nuity, and the preeminence of the party-interests shared by most, if not
all, top-level leaders.F__1
Although Deng's designated heir, party General Secretary Jiang Zemin, has
a modest edge over political rivals in the near term, the unresolved leader-
ship picture means decisionmaking will be collective and-without Deng's
strategic vision-cautious and defensive in the months following Deng's
death
Under this scenario, we do not expect significant changes in China's funda-
mental political and economic policies. However, Beijing's increasing
assertiveness in its relations with the United States will probably continue
to sharpen differences over human rights, proliferation, and trade issues.
The potential volatility of Chinese society and politics tempers our judg-
ments on short-term probabilities. The leadership's efforts to effect a
smooth transition could be frustrated by spontaneous outbreaks of local
unrest over social and economic conditions-for example, rice or tax riots
that threaten to escalate-or a sudden deepening of political rifts in the
leadership.F__1
The United States has few means to influence the succession process with-
out risking widespread Chinese condemnation. Some US actions, such as
imposing trade or proliferation-related sanctions, could intensify leadership
infighting. Other US steps-such as an exchange of presidential visits-
would provide a moderate boost to present leaders, and especially Jiang
Zemin.
iii et
 Se ret
February 1994
Images of Decline. Photographs chronicle Deng's
increasing physical frailty. His daughter, Deng Rong,
finally admitted in mid-January 1995 that her father's
health was in decline and his days numbered. Deng's last
public appearance, on television in February 1994,
showed him to be in obvious decline. Observers point to
additional physical enfeeblement evident in the recently
released photograph of a seated Deng allegedly watching
a fireworks display on 1 October 1994, China's National
Day; some observers interpret the photo as Beijing's way
of alerting the Chinese populace that Deng's time is near.
et iv
 Discussion
The Void Deng Leaves
With "paramount leader" Deng Xiaoping prob-
ably in his final year, China is on the brink of a
major political transition. The Deng succession
will be less a competition for rank and title-
Deng holds no formal position-than a compli-
cated political chess cam to determine ho
will emerge inher-
iting Deng's informal but formidable power
and influence over the Communist Party, gov-
ernment and military institutions, and state
policy
The succession is also a political transition
from China's "second generation" of elderly
leaders-those who followed Mao and his
peers-to a "third generation," who as adults
have known no other China but the People's
Republic. Jiang Zemin-party chief, Central
Military Commission Chairman, and state Pres-
ident-is officially designated by the Central
Committee as the "core" of this next generation
of leaders]
A Broad Interest in Stability...
The current leadership roster-a compromise
arrangement that emerged in the heat of
Tiananmen in 1989-was assembled by Deng
and his elderly compeers to ensure political sta-
bility and policy continuity. This uneasy tacti-
cal alliance-centered on Jiang, Premier Li
Peng, and Vice Premier Zhu Rongji-recog-
nizes the political imperative of cooperation
and has been moderately effective in submerg-
ing personal differences in the interest of man-
aging China. China's leaders have strong
Key Questions
? What effect will Deng 's death have on
Chinese policies?
? Will the question of a political "succes-
sor" to Deng be resolved in the follow-
ing six months?
? How will Deng's death a ect the US
relationship with China?
Working Assumptions
? Post-Cultural Revolution political
rules-consensus-building policymak-
ing, no bloody purges or appeals to
groups outside the party-will prevail.
? China's neighbors, and_.East Asia in gen-
eral, will remain politically stable and_ ....
nonthreatening.
? No outside power will attempt to steer
China's succession.
? China will su er no major economic
shocks.
incentives to maintain the outward appearance
of unity and to facilitate a smooth transition.
A divisive competition for power would:
? Jeopardize continued economic growth,
which requires a strong, stable center and
broad popular participation.
 ? Dissipate the party's scant remaining legiti-
macy and possibly encourage popular opposi-
tion in a repetition of the Tiananmen
formula-a publicly divided leadership inter-
acting with unruly crowds.
? Undermine China's growing international
stature-diligently and successfully nurtured
by Beijing after 1989-and scare off foreign
investors
Senior leaders of the People's Liberation Army
(PLA) share this interest in-and are essential
to-preserving stability following Deng's
death. Above all, they hope to avoid a repeat of
Tiananmen, in which main force units were
called upon to suppress civil unrest. Moreover,
the military high command has in general
bought into economic reform; for example, the
Army receives substantial budgetary infusions
drawn from the profits of commercial military
enterprises. We expect Army leaders to con-
tinue their broad support of the Jiang
leadership, even as their disinclination to get
involved in political maneuvering is tested by
their desire to strengthen the PLA's institutional
position in the new era.-
... But Political Jostling
Is Already Under Way
The premium we expect Chinese leaders to
place on preserving domestic stability does not,
however, augur a moratorium on political
maneuvering, as each leader recalculates his
relative power and his prospects for advance-
ment or survival under a new regime. Low-key
competition for advantage is a perpetual preoc-
cupation among the top leaders, who seek to
enlarge their respective degrees of control over
personnel slots, policy portfolios, economic
resources, and influence within security and
military forces.
By these criteria, the present group is relatively
well balanced. Deng's departure, however, will
remove an important balancing mechanism;
indeed, among Deng's accomplishments were
the moderation of extreme positions and suc-
cess in settling disputes among fractious politi-
cal leaders and groups.
top leaders are maneuvering to
consolidate their positions as Deng's health
steadily declines. Indeed such maneuvering has
probably taken place out of Deng's ken; by
mid-1994, Deng's health had forced his disen-
gagement from policy deliberations, and he
maintains formal contact with top leaders
through family members and trusted aides.
Political machinations are likely to continue as
particular contenders try to strengthen their
claims: Jiang to solidify his shaky "mandate";
Li Peng to resist calls for reappraisal of the
Tiananmen incident; and other senior leaders to
avoid being slighted or eased aside.
Personnel Moves? The leadership's shared
concern for stability also does not rule out the
dismissal-or marginalization-of one or more
high-level officials. Some leaders are
at particular
risk-for example, Zhu Rongji for having
alienated too many influential leaders on too
many issues, and Li Peng for his role in Tianan-
men. The six months after Deng's death may
well be characterized by fluid personnel
 What Deng's Death Sets in Motion
In the immediate aftermath of Deng's death,
we expect China's top leaders to focus on
preserving public order. The public security,
apparatus has almost certainly worked out
crowd-control contingencies to the last detail
in seeking to prevent a repeat of 1989, when
large crowds packed Tiananmen Square to
mourn former party chief Hu Yaobang.n
arrangements for enhanced security will go
into effect immediately upon word of Deng's
demise. Indeed, the first indications of this
event may well be a heightened PLA alert
status and bolstered People's Armed Police
deployments in and around Tiananmen
Square, Beijing University, and other open
places.
A variety of media sources
also indicate China's central propaganda
apparatus will mount a carefully controlled
media campaign to project leadership unity
and a clearly defined policy direction in
accord with Deng's ideas. Reports
indicate Beijing s media
blitz will be accompanied by new efforts to
repress dissenting points of view; party and
state propaganda officials have already
tightened scrutiny in light of Deng's expected
death]
Deng's memorial arrangements presumably
have been drawn up to comply with a 1991
ban on. mass. public funerals for top leaders,
conceived in response to the events of 1989.
In that case, the ceremony will probably be
small, by invitation only, and held under
tight security. Foreign leaders are unlikely to
be invited, although Beijing-based diplomats
and some `friends of China" such as King
Sihanouk may be included. In a recent
example of funeral protocol, the memorial
ceremony for former Standing Committee
member Yao Alin was held in the hospital
where he died, with the entire Politburo
Standing Committee present.
We presume Deng 'S funeral committee has
already been determined and will be headed
by Jiang Zemin. Every ruling group member
will probably attend the memorial meeting
or provide a public explanation for
absences. Deng's official eulogist-probably
Jiang-will read from a carefully crafted
script that is likely to include phrases anoint-
ing Jiang as an authoritative interpreter of
Deng's wishes and inheritor of his political
legacy.-
Striking the proper balance in the level of
sanctioned public mourning will almost cer-
tainly be a delicate problem for Jiang and
his colleagues. In particular, the leadership
will probably try to minimize the public
involvement without seeming disrespectful.
Public displays carry the risk of either an
effusive reaction that implicitly denigrates
Deng's successors or an eruption of public
outrage against inflation, corruption, and
repression, such as accompanied Hu's death.
ret
 arrangements as Jiang seeks to shore up his
authority by promotin su orters and trading
off positions to rivals.
Jiang's Leg Up. Although no Chinese leader is
likely to consolidate sufficient power over the
next six months to assume Deng's political
dominance, we believe Jiang Zemin has a mod-
est edge. As party chief, Jiang enjoys substan-
tial influence over personnel decisions and
resource allocation. He has used his position to
make advantageous personnel moves, court
military support with promotions and bigger
budgets, and play the statesman by assuming a
high domestic and international profile.
? Potential challengers have, in our view,
greater liabilities and fewer advantages; Li
Peng has Tiananmen, and Zhu Rongji is a
potential scapegoat for economic problems.
Jiang nevertheless has his own vulnerabilities.
From the time of his selection in 1989 as a
compromise choice to head the party, Jiang has
been criticized as a lightweight placeholder
lacking both vision and broad institutional
political backing
The absence of unqualified support
for Jiang strengthens the possibility of his
heading an interim collective leadership, pend-
ing consolidation of power by a single individ-
ual.F---]
The Elders Want In. The remaining members of
Deng's political generation, by their unwilling-
ness to go softly into retirement, may compli-
cate efforts to effect a smooth transition.
Traditionally, they exercised political influence
S cret
and enjoyed the perquisites of power through
strong personal "pull" with Deng, alliances
with each other, and support networks through-
out the Chinese apparatus. More recently,
through public appearances, some elders-in
particular, former President Yang Shangkun-
are trying to insert themselves more promi-
nently into the political calculus as news about
Deng grows grimmer.)
In contrast to 1987 or 1989, when they were
decisive in ousting two party general secretar-
ies following outbreaks of public disorder, the
elders will wield considerably less power after
Deng's death.
? Their numbers have shrunk considerably-
several prominent revolutionary generation
leaders have died since the 1992 party con-
gress.
? With the exception of Yang, most are physi-
cally infirm, mentally diminished, and gener-
ally unfit for the political fray.
? They no longer have Deng to act in their col-
lective interest or to legitimize their contin-
ued presence in the arena.F__1
Although Jiang and his peers would almost cer-
tainly prefer to avoid the reemergence of the
veteran revolutionaries on more than a sharply
restricted basis, contenders for power may feel
compelled to broaden their bases of support
and legitimacy with appeals to well-connected
older leaders. As a result, we cannot rule out
what in effect would be a short-term perpetua-
tion of the "Deng Xiaoping system"-that is,
the temporary emergence of yet another elder
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 S \ret
The "Deng System"
In China, the regime-whether Imperial,
Kuomintang, or Communist-has lacked
institutional mechanisms for resolving politi-
cal disputes, thus providing no guarantee
that whoever holds the top posts will in fact
exercise final authority. In this tradition,
Deng Xiaoping wielded power informally as
China's acknowledged "paramount leader"
and the key remaining member of the revolu-
tionary generation. "The Deng system "-
rule by an elder while younger leaders pre-
side over day-to-day party and government
business formally began in the early 1980s,...
when Deng-protege Hu Yaobang supplanted
Hua Guofeng as party chief. Deng remained
third in the formal hierarchy.F_-]
Deng has seldom exercised dictatorial power
but has usually functioned
in performing three critical functions. He
has:
? Set broad policy directions.
? Acted as referee in disputes that could not
be settled at lower levels.
as final arbiter. This could be compatible with
general leadership continuity and, in particular,
with Jiang's continuation in his present roles.
Yang seems to be trying to orchestrate this sce-
nario; his "investigations" and meetings across
the country have received wide publicity. His
? Wielded veto power over candidates for
key official posts.)
Integral to the Deng system has been the
participation of China's party elders. In
China's personalistic polity, Deng and his
octo- and.nonagenarian colleagues-the last
survivors of the Long March generation that
.......... .
founded the People's Republic in 1949-
were unmatched in prestige, individual con-
nections, and authority by virtue of their rev-
---...
olution-era experiences. Deng and junior
leaders maintained consultative relations
with the elders, which in effect ensured the
elders' continued participation in the system.
At present, China's informal politics contin-
ues to require that the party elite agree upon
a final arbiter. The passing of Deng and his
elderly colleagues, however, makes more
probable a transition to position-based,
rather than personal, rule. Deng's eventual
successor is thus likely to lead from the top
party or state office rather than from behind
the scenes.
fall from favor in 1992 and the hostility he
faces in certain military quarters, however,
make Yang's possible return to a major active
leadership role a destabilizing prospect; more-
over, any arrangement involving a prominent
role for octo- or nonagenarians must necessar-
ily be short-term
 Looming Issues
Regardless of how the succession proceeds,
China's post-Deng leadership must begin to
address a formidable range of interrelated
economic and political issues that, if not
quickly attended to, will threaten the coun-_.
try's longer term stability.
Clarifying the Role of the Party.
regime survival generally
depends on a combination of repression and
an ability to provide economic goods. More
over, senior Chinese leaders-in initiating
recent efforts to renew local party institu-
tions as .instruments of leadership--are try-
ing to show that they are addressing the
party's loss of discipline.
Balancing Center-Local Relations.
Beijing's relations with the provinces are tra-,
ditionally marked by tensions between con-
trol and autonomy. The national leadership
is now focused on regaining control over
China's most freewheeling and prosperous
provinces, through closer central supervi-
sion of party activities, more vigorous tax
collection, and tightened regulation of bank-.
ing practices.
Redefining Civilian-Military Ties- F
support from the military establishment
remains indispensable to the political sur-
vival of the party and of individual leaders.
Since Tiananmen, the Army has recognized it
is the party's guarantor and will probably
seek greater recognition for its pivotal role,
in the form of increased budgetary outlays,
freedom to operate profit-making enter-
prises, and enhanced influence over foreign
and national security policies. F--]
Getting On With Economic Reforms. A
wide variety of sources suggest that the
economy will be an important arena of polit-
ical infighting during the succession period.
Restructuring state enterprises and the bank-
ing and finance systems, however, are intrac-
tably tangled in conflicting bureaucratic and
political interests. If implemented, such
reforms would increase unemployment and
exacerbate social tensions. Some leaders
may elect-as.. Deng has in the past-to pro-
pose or jettison policy simply to sharpen
leadership differences or to leverage tactical
political advantages.F--]
Grappling With Corruption. After inflation,
the Chinese are most concerned about the
pervasive effects of crime and corruption,
according to Chinese opinion surveys and a
variety of anecdotal evidence. Although
Beijing has pursued a series of highly publi-
ciZed antico. rruptaon drives, m s- con uct
among senior officials and their families
generally goes unchecked and unpunished.
Unless Beijing visibly attempts to bring offi-
cial corruption under control, efforts to
restore the party's popular credibility are
likely to founder.
 Skret
Policy Departures Unlikely
Over the six months following Deng's death,
we do not expect major changes in Chinese
economic or foreign policies. As portrayed in a
host of media
reports, China's leaders-while nervous about
inflation and reform's social side effects, such
as mounting unemployment, rural-urban
income disparities, and official corruption-are
nevertheless convinced that long-term political
stability depends on continued economic
growth and foreign investor confidence.
? Under Deng, the party leadership has set in
place a multifaceted modernization effort that
has greatly increased the stakeholders in
reform at all levels.
? Beijing's vigorous development of economic
ties to the rest of Asia and its carefully planned
cultivation of global political influence dem-
onstrate a confident and growing presence on
the world stage from which the Chinese lead-
ership, regardless of its eventual political com-
position, will be loath to retreat.
Moreover, the growth of administrative profes-
sionalism and functional expertise in the State
Council over the last 15 years has enabled
China's Government to function routinely
without the day-to-day involvement of senior
leaders. Barring a massive outbreak of social
unrest-a contingency we view as remote-the
bureaucracy's relative distance and insulation
from high politics will probably ensure contin-
ued efforts to implement current priority poli-
cies.)
Without Deng at the helm and the succession
question still largely unresolved, however,
decisionmaking will be slower and possibly
more subject to deadlock. Nobody in the
leadership has demonstrated Deng's ability to
broker internal disputes, steer negotiations, and
shape a consensus around new policy initia-
tives. Senior leaders will be unwilling to take
positions that expose them to criticism for com-
promising basic domestic and foreign interests.
The commitment to policy stability will, on the
one hand, produce bureaucratic inertia; on the
other hand, stubborn inflexibility.-
Searching for a Soft Economic Landing.
Beijing's continued efforts to cool the economy
will probably guide policy in the immediate
post-Deng period. Since mid-1993, economic
policymakers have tried to put on the brakes
through sporadic administrative measures such
as credit rationing and price controls. In recent
media comments, Chinese economists express
confidence that the economy is headed for a
soft landing in 1995. We are skeptical of this
judgment, however, and expect a moderately
harder landing in light of continued massive
subsidies to the state industrial sector and the
potential for further inflationary shocks.-
Beijing will probably also remain hesitant to
undertake large, controversial, and potentially
destabilizing reform initiatives on which the
leadership has long procrastinated.
a combination of rampant
inflation and local official malfeasance had
made them fearful of civil unrest on the eve of
the September Central Committee plenum. As a
probable result, they discarded their economic
agenda for that meeting and focused on political
and social control issues.
? Stalled economic policies-such as further
reforms of tax collection and the banking sys-
tem-will remain mired in the uncertainties
and insecurities of the succession political
climate.
 Tightening Domestic Controls. Over the next
six months, leaders in Beijing will almost cer-
tainly follow up enhanced post-Deng security
measures with additional prophylactic steps to
ensure that expressions of dissent remain unor-
ganized. As custodian of party authority, Jiang
is using a current "party building" drive as a
means of strengthening Beijing's ability to
monitor social moods and economic perfor-
mance. The party will probably resort to more
intrusive guidance and scrutiny at all levels.
For example, Hong Kong press reports indicate
local-level party units are being encouraged to
swear oaths of loyalty and service not only to
the party in general but also specifically to the
Jiang leadership.
A More Nationalistic Tone. Beijing will proba-
bly emphasize broad continuity with foreign
policy lines laid down by Deng-reinforcing
China's aspirations to great power status and
not simply to Third World leadership. This
could produce a greater assertiveness in foreign
olicy-toward the United States in particular.
one of Beijing's top foreign policy
goals is a working relationship with Washing-
ton that acknowledges China's growing inter-
national stature and moves past the tensions
that have dominated relations since the Tianan-
men crackdown. Nevertheless, a variety of
reports over the
past year point to a running dispute within the
leadership over China's approach to the United
States-particularly on issues involving
Taiwan-which some leaders characterize as
too "soft" and too willing to negotiate away
Chinese security interests.
In the succession context, we expect such con-
cerns will sharpen the more assertive tone we
have discerned in Beijing's dialogue with
Washington after the Administration decoupled
human rights from China's most-favored-
nation status renewal last year. In talks on
GATT accession, intellectual property rights,
human rights, and other areas of bilateral inter-
est, the Chinese have increasingly fallen back
on formulas emphasizing and defending
China's rights as a sovereign nation. Moreover,
anecdotal evi-
dence suggest that even Chinese group
generally sympa-
thetic to Western human rights and market-
access goals support the government when for-
eign tactics are perceived as "China bashing."
Greater assertiveness in foreign relations is
consistent with China's current trade negotiat-
ing tactics, which
define trade as a means to further
China's political goals by "punishing enemies
and rewarding friends."
 Behind China's Recent Harder
US Policy Line
Beijing sharpened its rhetoric toward the
United States in the controversies surround-
ing GATT accession negotiations, bilateral
intellectual property rights talks, and the
Administration's Taiwan policy review
China's recent decision to freeze. the China-
US nonproliferation dialogue and threats of
broad retaliation fora US-backed resolution
on China in the UN Human Rights Commis-
sion (UNHRC) underscore frustration with
US pressure and possible sanctions.
? Chinese policymakers are emboldened by
their self-described "victory" last May-
when the United States decoupled China's
most-favored-nation trade status from
human rights-and ensuing perceptions of
China's economic-leverage.F__1
Beijing is driven by what it perceives as
Washington's betrayal of the basis for "con-
structive engagement. " Chinese leaders. view_
the MFN decision as a commitment by both
sides to focus on mutual economic interests
and relegate contentious issues like human
rights to the side. For example, leaders-
expecting economic interest and quiet bilat-
eral dialogue-to deflect US pressure-were
shook by efforts to obtain a China resolution
at the UVHRC.
? Implicitly, if not explicitly, Beijing is
drawing,-new: lines on issues-human
rights, Taiwan-that it has long identified
as "internal affairs" and matters of prin-
ciple.l
Chinese assertiveness is heightened by suc-
cession concerns. Senior leaders are unwill-
ing to make concessions that expose them.to
criticism for caving under Western pressure.
Even were Deng at the helm, the leadership
may have laid down the same strong mark-
ers. On issues like Taiwan and human rights,
all leaders share "hardline" views. Deng 's
departure, however, means the-re will be no
single leader capable, as Deng was, of defin-
ing the limits of China's assertiveness; with-
out him, the Chinese run the risk of
miscalculating their leverage and boxing
themselves in with threats they feel com-
pelled to honor.)
Some in the Community maintain Chinese
behavior is also driven by the leadership's
reappraisal of US ties and its conclusion that
Washington is determined to thwart China's
modernization
? Most agree, however, it is premature to
conclude that Beijing has reevaluated its
US relationship; in some areas-especially
defense-we see little evidence that China
wants to reduce or terminate bilateral con-
tacts.
The Chinese remain sensitive to the economic
and diplomatic costs of a serious deteriora-
tion in bilateral relations and appear unwill-
ing to push differences over trade and human.
rights to the breaking point. Their responses,
so far, suggest a desire to continue segregat-
ing the more contentious issues and follow
the customary pattern o calculated, con-
trolled retaliation,
 A Peaceful Transition
The immediate post-Deng period is likely to be
relatively tranquil, even as leaders maneuver
for political advantage. Security arrange-
ments-involving both the People's Armed
Police and the PLA-will prove sufficient to
dissuade potential demonstrators from trying to
exploit the situation and, after a moment of
mourning, the state bureaucracy will return to
its preoccupation with administering the econ-
omy and preparing for the 9th Five-Year Plan.
The Army will remain in the barracks and be an
overall force for stability. Transition politics
will be driven by Jiang Zemin's efforts to con-
solidate his leadership and by other leaders'
countervailing exertions to hem Jiang in or to
gain influence over him.l
Low Probability, High-Impact Scenarios
Our confidence in a relatively calm transition
over the short term is tempered by the potential
volatility of Chinese politics and society. We
cannot rule out a number of contingencies in
which the well-laid plans of Chinese authorities
unravel in the face of spontaneous local out-
breaks of disorder-for example, rice or tax
riots or protests over local corruption-or lead-
ership fragmentation, either of which would
increase the probability of more remote scenar-
ios.)
The Reappraisal of Tiananmen
power former party chief Zhao Ziyang, who is
still widely admired within the elite for his
administrative flair in the 1980s reforms. A res-
urrection of Zhao is improbable, largely because
it would require the party to reverse Deng's rul-
ing on Tiananmen as a "counterrevolutionary
riot" that Zhao fueled by his mistakes. Such a
reversal would discredit virtually all current
leaders and many retired elders. =
Eventually, some contender for power will
probably seek to enhance his legitimacy and
bolster his political support by appealing to the
numerous Zhao proteges still within the sys-
tem. Steps to reverse the Tiananmen decision
would be a requirement for gaining support
from Zhao's network. Under this scenario,
Zhao would very likely be rehabilitated but not
returned to a position of power. The reversal of
the Tiananmen decision would require a politi-
cal coalition strengthened by several current
Politburo members, some support from power-
ful elders, and the assent of senior military
leaders]
Such a scenario would have broad effects,
including a purge of leaders closely associated
with the Tiananmen crackdown or the Zhao
dismissal-for example, Premier Li and several
of his proteges. These steps would increase sys-
temic pressure to speed up the pace of political
reforms and market-oriented economic
reforms]
The Army Steps In. The probability of direct
military intervention is low. The Army might,
however, intervene "to save the nation" in one
of two situations: widespread disorder or pro-
longed leadership deadlock. Although Army
leaders would, under such circumstances, be
unlikely to impose a system of military rule,
once involved, it is unclear whether they would
return control to the existing leadership or
would compel a top-level shakeup in China's
leadership organs. To effect such a shakeup,
military leaders would probably enlist a coterie
of senior civilian allies and retired elders.
 ? An Army-led shakeup of China's leadership
would probably have little effect on eco-
nomic policies but might underscore the
nationalistic element in foreign policy
But If We Are Wrong
Early tipoffs that the succession is not going
smoothly and that leadership politics are lurch-
ing toward confrontation would include:
? Key omissions or absences from Deng's
funeral committee.
? A eulogist other than Jiang Zemin at Deng's
memorial.
? An unusual role-positive or negative-
accorded to party elders.
? Provocative language-with a clearly identi-
fiable target-in Deng's eulogy, in postevent
press commentary, or in quoted leadership
comments.
? An irregular pattern of leadership appear-
ances or the failure of a leader to make
expect d public or official appearances.
An open challenge to Jiang's authority or a
more overt bid by Jiang to aggrandize his
power at some later time would involve a
contest for control over key functional port-
folios and over top posts in one or more of
China's three major institutions-the party,
the government, and the military. At that point,
we might see:
? In the official media, veiled critical references
to, or unusually explicit praise of, senior lead-
ers, their known supporters or appointees, or
Scret
their policy preferences; marked departures
from formulistic language, shifting from an
emphasis on unity toward criticism of
unnamed leaders for "factionalism."
? In the party bureaucracy, evidence of person-
nel movement in key units such as the Orga-
nization Department (personnel), Propaganda
Department (media), and the General Office
(housekeeping affairs, party records, leader-
ship security); changes in the leadership of
the party Leading Groups that supervise gov-
ernment policies.
? In the government apparatus, unusual per-
sonnel shuffling; unanticipated major policy
initiatives; sizable cutbacks in, or criticism
of, current programs closely associated with
specific leaders-for example, the Three
Gorges Power Project or the 1993 Tax Plan;
enhancements in the real authority of "rub-
berstamp" organizations like the National
People's Congress or the Chinese People's
Political Consultative Congress, both of
which are headed by potential rivals of Jiang.
? In the Army, unanticipated personnel moves
in the Central Military Commission or in the
three General Departments (Staff, Logistics,
and Political); statements by senior Army
leaders that betray any succession-related
sentiments other than whole hearted endorse-
ment of Jiang Zemin; thinly disguised efforts
by retired PLA figures to influence succes-
sion politics or policy.-
Implications for the United States
The United States can have little direct impact
on the succession. Any action that might be
perceived as interfering in China's domestic
 affairs or favoring a contender would very
likely provoke widespread Chinese condemna-
tion. Under all short-term scenarios, China will
affect US interests by:
? Continuing to emphasize its expanding for-
eign economic relations, thereby ensuring the
importance of trade and foreign direct invest-
ment as central to US-China ties.
? Resisting major concessions-for example,
on human rights, nonproliferation, or admis-
sion into GATT and the World Trade Organi-
zation-as fraught with short-term political
risks for any Chinese leader who might be
cast as weak in defending Chinese interests or
sovereignty.
? Being particularly sensitive to perceived
slights to sovereignty over either Taiwan or
Hong Kong.
? Avoiding significant steps toward political
liberalization or greater emphasis on human
rights, whether because of the insecurities of
leadership groups feeling their way toward
new political relationships or simply out of
continuity with Deng's policy of linking
openness to political repression.-
US actions might indirectly affect the succes-
sion. For example, additional US trade or pro-
liferation-related sanctions might intensify
leadership infighting and fingerpointing in
Beijing. On the other hand, US gestures to
improve relations-for example, an exchange
of presidential visits-might boost the political
credentials of present leaders, and Jiang Zemin
in particular.F--]
 Annex
Significant Chinese Leaders
Politburo Standing Committee Members
Jiang Zemin, 68, is General Secretary of the Chinese Communist Party,
President of China, and Chairman of both party and state military commis-
sions. Jiang is, Dena's public choice as the "core" of the new leadership
In his public remarks he regularly emphasizes the
need for party control and the primacy of the center.
Li Peng, 66, oversees the State Council as Premier. Li reportedly has long-
standing ties to party elders, largely by virtue of his having been raised in
the household of former premier Zhou Enlai. Li has been dubbed the
reflexively anti-Western and particularly sensitive to outside criticism of
China's human rights record.F__1
Qiao Shi, 70, is Chairman of the National People's Congress (NPC),
China's rubberstamp legislature. Information on Qiao is fragmentary, and
his policy views are largely unknown. Although he is working to increase
the legislature's influence, his power derives primarily from his back-
ground in the security and legal apparatus.~
Li Ruihuan, 60, is Chairman of the Chinese People's Political Consulta-
tive Conference, a "united front" organization of generally non-Communist
members. Li has strongly supported Deng's economic reform program and
open-door policy. He held the propaganda and ideology portfolios until
1992 and currently focuses on united front work.n
Zhu Rongji, 66, is Vice Premier and People's Bank of China Governor.
Zhu has been the point man for recent banking and tax reforms. He favors
market solutions to microeconomic problems but continues to support a
high degree of state intervention in the economy. A variety of reports indi-
cate Zhu has broad support within the bureaucracy's reformist wing but
weak party and military connections.-
 Liu Huaqing, 78, is Vice Chairman of both the party and state military
commissions and a career military officer.
Liu has supported Deng's push for military modernization and
professionalization. A strong backer of closer US-Chinese military ties
before the Tiananmen crackdown
wants to renew the relationship.
Hu Jintao, 52, oversees personnel and organizational affairs and is the
ranking member of the Secretariat-the working body responsible for
internal party matters. A staunch public proponent of Deng's reform
agenda, Hu's background is largely in the party apparatus.n
A Key Party Elder
Yang Shangkun, 87, is a former President of China and Vice Chairman of
the Central Military Commission. A Long March veteran, he has been
closely allied with Deng for decades. Yang and his half brother were
removed from the military chain of command in 1992, ostensibly to satisfy
senior commanders displeased by the Yangs' heavy politicization of the
PLA. Yang-viewed by some Chinese observers as a key potential broker
in the successio
 Warning Notice Intelligence Sources
or Methods Involved
(WNINTEL)
National Security Unauthorized Disclosure
Information Subject to Criminal Sanctions
Information available as of 16 February 1995 was
used in the preparation of this National Intelligence
Estimate.
The following intelligence organizations participated
in the preparation of this Estimate:
The Central Intelligence Agency
The Defense Intelligence Agency
The National Security Agency
The Bureau of Intelligence and Research,
Department of State
The Office of Intelligence Support,
Department of the Treasury
also participating:
The Deputy Chief of Staff for Intelligence,
Department of the Army
The Director of Naval Intelligence,
Department of the Navy
The Assistant Chief of Staff, Intelligence,
Department of the Air Force
The Director of Intelligence,
Headquarters, Marine Corps
This Estimate was approved for publication by the
National Foreign Intelligence Board.
Dissemination Control NOFORN (NF) Not releasable to foreign nationals
Abbreviations NOCONTRACT (NC) Not releasable to contractors or contractor/consultants
ORCON (OC)
Dissemination and extraction of information
controlled by originator
 S4ret