PROBLEMS AND PROSPECTS IN COMMUNIST CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP10X00001R000100010012-3
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 36
• Document Creation Date: December 22, 2016
• Document Release Date: January 19, 2011
• Sequence Number: 12
• Publication Date: May 1, 1963
• Content Type: NIE

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NATIONAL INTELLIGENCE ESTIMATE
NUMBER 13-63
(Supersedes NIE 13-4-62 and
NIE 13-4/1-62)
Problems and Prospects
in Communist China
Submitted by the
DIRECTOR OF CENTRAL INTELLIGENCE
Concurred in by the
UNITED STATES INTELLIGENCE BOARD
As indicated overleaf
1 MAY 1963
SE
COMLLED DISSEM
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NIE 13-63
1 May 1963
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SECRET
The following intelligence organizations participated in the preparation of
this estimate:
The Central Intelligence Agency and the intelligence organizations of the Depart-
ments of State, Defense, the Army, the Navy, the Air Force, and NSA.
Concurring:
Director of Intelligence and Research, Department of State
Director, Defense Intelligence Agency
Assistant Chief of Staff for Intelligence, Department of the Army
Assistant Chief of Naval Operations (Intelligence), Department of the Navy
Assistant Chief of Staff, Intelligence, USAF
Director for Intelligence, Joint Staff
Director of the National Security Agency
Abstaining:
The Atomic Energy Commission Representative to the USIB, and the Assistant Di-
rector, Federal Bureau of Investigation, the subject being outside of their
jurisdiction.
This material contains information affecting the National Defense of the United States
within the meaning of the espionage laws, Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner to an unauthorized person is prohibited.
GROUP 1
Excluded from automatic
downgrading and
declassification
SECRET
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NATIONAL INTELLIGENCE ESTIMATE
NUMBER 13-63
Problems and Prospects
in Communist China
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SECRET
TABLE OF CONTENTS
Page
THE PROBLEM . . . . . . . . . . . . . . . . . . . . . . . . 1
CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
I. THE ROAD TO 1963 . . . . . . . . . . . . . . . . . . . . 2
II. PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . 4
A. Political . . . . . . . . . . . . . . . . . . . . . . . . 4
B. Economic . . . . . . . . . . . . . . . . . . . . . . . 5
C. Military . . . . . . . . . . . . . . . . . . . . . . . . 7
D. Sino-Soviet Relations . . . . . . . . . . . . . . . . . . 9
E. Foreign Affairs . . . . . . . . . . . . . . . . . . . . . 11
I. ECONOMIC PERFORMANCE IN 1962 . . . . . . . . . . . . 15
A. Agriculture . . . . . . . . . . . . . . . . . . . . . . 15
B. Industry . . . . . . . . . . . . . . . . . . . . . . . 16
C. Foreign Trade . . . . . . . . . . . . . . . . . . . . . 17
D. Transportation . . . . . . . . . . . . . . . . . . . . 18
E. Education and Science . . . . . . . . . . . . . . . . . 18
II. PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . 19
A. Short-Term Prospects . . . . . . . . . . . . . . . . . 19
B. Future Economic Policy . . . . . . . . . . . . . . . . . 19
C. Agriculture . . . . . . . . . . . . . . . . . . . . . . 20
D. Industry . . . . . . . . . . . . . . . . . . . . . . . 20
E. Foreign Trade . . . . . . . . . . . . . . . . . . . . . 21
F. Education and Science . . . . . . . . . . . . . . . . . 22
G. Population . . . . . . . . . . . . . . . . . . . . . . 23
Table 1: Air Forces . . . . . . . . . . . . . . . . . . . 25
Table 2: Naval Forces . . . . . . . . . . . . . . . . . . 26
Table 3: Ground Forces . . . . . . . . . . . . . . . . . 28
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Disposition of Communist Ground Forces
Communist China: General
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PROBLEMS AND PROSPECTS
IN COMMUNIST CHINA
THE PROBLEM
To establish where Communist China now stands in its do-
mestic situation and foreign policies, to identify the major prob-
lems it faces, and to estimate probable developments over the
next two years or so and, where possible, further ahead.
CONCLUSIONS
A. Communist China's domestic situation appears slightly im-
proved from its recent grievous state. To a considerable extent
this improvement reflects relatively moderate, pragmatic policies
which have replaced the excesses of the "leap forward" and com-
mune programs. With good luck and good management, the
economy could within the next couple of years resume a rapid
rate of growth approaching that of the First Five-Year Plan,
though it is likely to fall short of this. A critical question over
the next five years will be whether the Chinese Communist
leadership will sustain a pragmatic course in the face of its
strong ideological compulsions. Unsound doctrinaire policies,
bad weather, and other unfavorable factors could combine to
cause complete economic stagnation. (Paras. 1-6, 11-17)
B. Though discontent will persist and could increase if the
economic situation deteriorates, we do not believe that dissidence
will pose any serious threat to the regime in the next two years.
(Para. 10)
C. Communist China's economic difficulties and the drastic
reduction of Soviet cooperation have lessened the relative effec-
tiveness of Communist China's military establishment. Never-
theless, Peiping still has by far the strongest Asian army, and
this is sufficient to support the kind of relatively cautious foreign
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policies Peiping has actually been conducting or is likely to con-
duct during the next two years. It will almost certainly not
have a militarily significant nuclear weapons system until well
beyond this period.' (Paras. 18-23)
D. Peiping's dispute with Moscow springs from basic issues of
incompatible national and party interests, and the Chinese Com-
munists show no signs of relenting. Public polemics may be
damped down on occasion, but we do not believe a fundamental
reconciliation will take place. The Chinese will almost certainly
continue to attempt to expand their influence at Soviet ex-
pense in the underdeveloped countries and to turn Communists
throughout the world against Khrushchev and his policies. A
formal schism could occur at any time, although the chances are
reduced by each party's great anxiety to avoid the onus of having
split the world Communist movement. (Paras. 24-30)
E. Communist China's foreign policy will probably continue
generally along current lines. Peiping will remain passionately
anti-American and will strive to weaken the US position, espe-
cially in east Asia, but is unlikely knowingly to assume great
risks. China's military force will probably not be used overtly
except in defense of its own borders or to assert territorial claims
against India. Subversion and covert support of local revolu-
tions will continue to be Peiping's mode of operation in southeast
Asia and, to a necessarily more limited degree, elsewhere in Asia
and in Africa and Latin America. (Paras. 31-40)
DISCUSSION
1. THE ROAD TO 1963
1. The situation in Communist China is a little better than it has
been during the past two years. However, the effects of ill-advised pol-
icies and the almost total loss of Soviet support, intensified by a long
spell of bad weather, have left a China that is far different from the
one which, five years ago, so exuberantly undertook the risks of the
economic "leap forward" and of assertive independence of Moscow.
2. By 1958, the Chinese Communist leaders had concluded that the
country's rate of economic progress was unsatisfactory. Despite im-
pressive growth in the industrial sector, China's agricultural produc-
1 This question will be discussed in detail in NIE 13-2-63, "The Chinese Commu-
nist Advanced Weapons Program," (TOP SECRET) to be published soon.
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tion had not increased sufficiently to feed a growing population, repay
the Soviet credits, finance current imports, and provide capital for rapid
industrial development. China's leaders apparently concluded that they
could meet their economic problems only by a radical departure from
Soviet techniques of economic development. Deciding to rely chiefly
on manpower, their only readily available surplus resource, they suddenly
and summarily organized the peasants in mid-1958 into huge super-
collectives-communes-that were to regulate every phase of produc-
tive activity in the rural areas. At the same time they embarked on
an all-out, frenetic drive for industrial and agricultural development
under the banner of "the great leap forward."
3. This sharp divergence from the Soviet model was part and parcel
of a developing Sino-Soviet dispute over a broad spectrum of military,
economic, diplomatic, and ideological questions. By mid-1958, the Chi-
nese leaders had apparently become convinced that the USSR did not
intend to satisfy Chinese desires respecting advanced weapons, indus-
trial development, and great power status. They initiated sharp new
departures not only in economic development but in military programs.
What was particularly galling to the USSR was Peiping's growing ideo-
logical assertiveness. Communist Chinese leaders became increasingly
critical of Moscow's international policies. By the end of 1960 the USSR
had responded by withdrawing most of its technicians, Soviet deliveries
were declining sharply, and the rift between China and the Soviet
Union had become wide and deep.
4. Communist China has paid a staggering price for these assertions
of Chinese political and economic independence and the decisions of
its leaders to force the rapid emergence of a great new China by radi-
cal means. The new Chinese theories of development created economic
and psychological chaos. The drastic reduction of Soviet cooperation
critically increased the regime's difficulties, and led to technical break-
down and disorganization in industry and drastic setback to Peiping's
modern weapons programs. By the end of 1962, the nation's economy
was generally no further along than it had been at the end of 1957.
The Chinese people have spent five strenuous, painful years on a tread-
mill. And whereas the regime had entered 1958 with a great reservoir
of respect and popular support, it now has to call upon a weary and
disillusioned people to move the country forward.
5. The past several months have shown signs of improvement. The
food situation eased somewhat in the summer of 1962, as a result of
better weather, agricultural decentralization, and an increase in private
plots and "free markets." There has been a rise in the production of
agricultural support goods (e.g., tools, pumps, and fertilizer). These
developments, and others such as the one-sided victory over Indian
forces on the Himalayan border, appear to have improved popular morale
somewhat and have probably reduced the dissidence potential.
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6. Peiping's leaders have entered 1963 in a mood of some confidence.
Although they admit to having set overambitious goals and committed
other errors, they evince no doubts about the validity of Marxism-
Leninism or the correctness of their interpretation of it. They place
the major blame for past disasters upon cadre errors, unprecedentedly
bad weather, and Soviet sanctions. They believe that by surviving these
trials they have demonstrated the soundness of their regime. Commu-
nist China can now recover on its own, they apparently believe, and
without the need to rely on external aid from an untrustworthy
partner.
A. Political
7. The leadership elite of the Chinese Communist Party has not sur-
vived the crises of the past five years unscathed. In 1959 the Minister
of Defense and the Armed Forces Chief of Staff were removed from
office and disgraced. A few other key figures appear to have been
shoved quietly into the background. A number of provincial First Sec-
retaries and other middle-level officials have lost their jobs. At the
lower levels of the party there has been a considerable increase in cyn-
icism and a notable loss of elan.
8. The regime nevertheless remains under the control of essentially
the same group of Long-March veterans who have led Chinese commu-
nism since the mid-1930's. Ultimate power still rests with Mao Tse-
tung, although basic decisions are probably reached by leadership con-
sensus. It is unlikely that the composition of the leader group will be
seriously altered during the next two years or so, although the actuarial
odds will be increasingly against this group-nearly all of whom are
in their 60's or 70's. If Mao, who will be 70 this year, should die, he
would probably be succeeded by Liu Shao-ch'i, the present Chairman
of the government and Mao's designated heir, but Liu would not enjoy
Mao's prestige and pre-eminence over his colleagues.
9. The Chinese Communist regime will almost certainly continue
to adhere to its own brand of communism and to remain very much
anti-US. The character and direction of its domestic policies over the
next two years are, however, less certain. Beginning in 1960, Chinese
leaders have relaxed pressures and controls and removed many of the
coercive features of the commune and "great leap forward" programs.
In the past few months they have begun to intensify political pressures
and controls aimed at increasing central direction of the economy and
curbing private activities. This recent behavior raises a question of
the extent to which they may reverse over the next few years the more
permissive and pragmatic courses which have helped alleviate the con-
sequences of Peiping's earlier policies.
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10. Any significant rise in public dissidence in the near future is un-
likely. The bulk of the people, especially the four-fifths who constitute
the peasantry, seem prepared to work stoically for very modest, direct
rewards, as they have for centuries. For the most part, they will prob-
ably continue neither to combat nor support the regime, but will strive
to ignore it. Judging from the limited available evidence, they will
probably remain more interested in personal survival than in revolution.
The regime will have somewhat greater difficulty with the young people,
who are embittered by current drastic restrictions in educational op-
portunities and frustrated by very limited and arbitrarily assigned job
opportunities. Dissidence tendencies would increase if the regime
pushed political and economic controls too harshly or too far or if food
supplies decreased sharply. We doubt, however, that conditions will
deteriorate so far in the near future as to precipitate widescale resist-
ance. Taipei is unlikely to receive decisive popular support for any
military efforts short of a major invasion which had established momen-
tum. Dissidence among national minorities (e.g., in Sinkiang) will
almost certainly persist but remain localized.
B. Economic 2
11. Communist China has the potential for substantial economic
growth. It has good supplies of most of the natural resources needed
by modern industry and it has a huge and hard working labor force.
The much greater productivity of Japanese and Taiwanese fields in-
dicates that Chinese agricultural output could be considerably in-
creased. Properly managed, the economy of the Chinese mainland
could provide a continually improving standard of living for a number
of years to come, in spite of a population growth rate that may again
rise to as much as 2.5 percent a year.
12. During the past five years, however, Communist China's economy
has been grievously mismanaged. The leadership has been handicapped
by inadequate economic training and experience, limited by a narrow
doctrine, and misled by fanaticism. The Second Five-Year Plan was
abandoned in its infancy in favor of the uncoordinated frenzy of the
"leap forward." In addition, several consecutive years of very bad
weather and the abrupt withdrawal of Soviet economic and technical
cooperation further upset the economy.
13. Following the chaos of the past five years, Peiping has apparently
decided to go ahead on schedule with a Third Five-Year Plan to cover
the years 1963-1967. Since the plan is hardly beyond the preliminary
stage and even the annual plan for 1963 has apparently not been for-
mulated, the chief significance of announcing the Third Plan at this
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time is as a signal that the regime is, for the moment at least, intent
upon returning to a systematically planned economy: The one big
deviation from standard Communist practice is the order of priority
for planning and investment: first, agriculture and those branches of
heavy industry which support agriculture and national defense; then
light industry; and finally industry in general. This stress on agri-
culture marks a belated recognition that greater agricultural invest-
ment is necessary to enable China to feed its people and that this is a
prerequisite to a vigorous and rapidly growing heavy industry.
14. In any event, the outcome of the race between growth in agricul-
tural production and growth in population will be constantly in doubt.
In 1962, population stood at 60 million above the 1957 level, while grain
production had no more than regained the 1957 level. To succeed in
agriculture over a period of years, Peiping must not only minimize the
depressing effects of collectivization and lowered incentives but stimu-
late production with increasing amounts of fertilizer, improved seed,
better disease and insect control, better water conservancy, and more
modern tools and techniques. It takes time and money to develop
these resources and utilize them effectively. In the meanwhile, the
critical factor may well prove to be Peiping's management of the peas-
antry. The outlook is not bright in this respect. Communist agri-
cultural management has demonstrated itself in China, as elsewhere,
to be a damper on productivity.
15. In industry there has been a modest improvement in performance
in recent months, according to the scanty evidence available. The cur-
rent stress on quality controls, coordination among industries, and the
gearing of output to actual needs will, if continued, probably place in-
dustry on a sounder, more rational basis. The need for goods to pro-
vide incentives for labor and items for export has induced Peiping to
give light industry priority over those branches of heavy industry that
do not directly support agriculture or national defense. What is needed
for a large increase in light industrial production is not so much new
investment as reactivation of presently idle capacity; this, in turn, de-
pends on increased supplies of raw materials from agriculture.
16. The margin between success and failure will remain so slim, and
the variables so great, that any estimate of Communist China's overall
economic future must be general and tentative. If the regime continues
to pursue relatively moderate and rational policies and if it has reason-
ably good luck with the weather, the Communist Chinese should enjoy
continued, though modest, recovery during the next year or so. This
will result largely from returning idle capacity to production, and it
will probably be accompanied by improvement of product quality, more
effective coordination of the allocation of resources, and better mainte-
nance and repair of equipment. Over the longer run, the imponderables
increase, and a wide range of developments is well within the limits
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of possibility. We believe that the upper limit of what Peiping can
achieve over the next five years, with the variables generally favorable,
is a resumption of substantial economic growth approaching that of the
First Five-Year Plan.
17. Of the variables which, unlike the weather, are subject to Peiping's
control, the one which probably is of critical importance to the economy
is national economic policy. The present order of economic priorities
and the use of material incentives to stimulate production run against
the grain of Peiping's doctrine. Both the strong Chinese craving for
"modernity" and the doctrinaire Communist compulsion toward rapid
industrialization militate against lasting primacy for agriculture. As
soon as the Communist Chinese leaders judge the agricultural founda-
tion to be adequate, they will almost certainly shift their emphasis
to industrial expansion, and they may do so prematurely. Moreover,
to renew a program of general development entailing large capital
expenditures would require reimposition of stringent controls over con-
sumption, distribution, and procurement of agricultural output. The
regime may not be successful in increasing its take from the hard-
pressed countryside, and, even if it is, the substitution of political pres-
sures for economic incentives could again depress agricultural output
and stimulate dissension against the regime. With this in mind, to-
gether with the possibility of adverse trends in such other variables
as crop weather and foreign economic relations, we believe that the
regime's economic achievements are likely to fall short of the upper
limit described in the preceding paragraph. Furthermore, it is pos-
sible that a combination of unfavorable developments could result in
economic stagnation which in time could critically erode the unity
and strength of the regime.
C. Military 3
18. The modernization of the armed forces, which was progressing
steadily until about 1960, has practically ended, except for the continued
introduction of radar and certain other electronic equipment. No ad-
vanced aircraft, submarine components, or other items of advanced
equipment have been received from the USSR in the past two and one-
half years, domestic production of fighter aircraft and submarines has
ceased, and inventories are being reduced by deterioration and cannibal-
ization. During the depths of the domestic decline, the military forces
suffered shortages of even routine items of supply, but this condition
has apparently been alleviated in the past year. In general, the army
has been less affected than the other services.
19. Peiping almost certainly intends to achieve domestic production
of all necessary weapons and materiel for its armed forces. It has a
8 Annex B sets forth Order of Battle figures for Chinese Communist air, naval,
and ground forces.
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long way to go before reaching this goal, however. The Chinese at
present are probably unable to produce even MIG-17's entirely by them-
selves, and it will be a number of years before they can design and
produce more advanced types of military aircraft. Indeed they may
have chosen instead to concentrate their limited resources on missiles.
Their wholly domestic naval shipbuilding capacity is likely to be re-
stricted to surface ships of the smaller types during the next few years.
20. Our knowledge of the morale of the Chinese Communist forces
is minimal. From Chinese documents we know that morale was low
during the depth of the food shortages (late 1960, early 1961) when the
troops were underfed and overworked and were distressed by the even
greater suffering of their families. Measures taken to ease the situation
of the troops and to provide special rations to their families appeared to
improve morale beginning in the latter half of 1961. The Chinese troops
in the recent Sino-Indian border fighting displayed no indication of
poor morale. Air force and navy units have not been similarly tested,
however, and the decreasing effectiveness of their equipment, along with
the inadequacy of training caused by fuel stringency and lack of spare
parts, may have lowered morale in these services.
21. Additionally, there have been problems at top command levels,
where the military policy of the party was apparently challenged. How-
ever, dismissal of Defense Minister P'eng Te-huai and the strengthening
of security measures within the armed forces appears to have insured
subservience to the party.
22. Peiping's military policy has always been characterized by caution
in undertaking initiatives in the face of superior power. Hence the
decline in the relative effectiveness of its military equipment and weapons
is likely further to temper Peiping's policy, especially in circumstances
where it might confront US armed power or US-equipped Asian air forces.
However, the Chinese Communist Army will continue to be the strongest
in Asia and to provide a powerful backing for Chinese Communist foreign
policy. The Sino-Soviet dispute will probably place additional demands
on Chinese military dispositions and capabilities, since one of the con-
sequences of China's new "independence" from the USSR will be the
need to keep a closer watch than previously on the long China-Russia
border-which the Chinese still consider a "difficult" and "unsettled"
question.
23. Advanced Weapons.4 Peiping appears determined to achieve a
nuclear and ballistic missile capability, and in time it will almost cer-
tainly do so, though it is not likely to acquire a militarily significant sys-
tem until well beyond the period of this estimate. In the shorter term,
4 This subject will be treated fully in the forthcoming NIE 13-2-63, "Communist
China's Advanced Weapons Program," (TOP SECRET).
8 SECRET
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the Chinese Communists probably hope to produce and detonate a nu-
clear device as a step toward developing this capability and in the ex-
pectation that this would boost morale at home, strengthen the regime's
claim to world power status, and inspire fear in its Asian neighbors. For
some time to come, even a limited effort in the nuclear and missile fields
will severely tax the regime's economic and technical resources.
D. Sino-Soviet Relations
24. We believe that Peiping's continued willingness to challenge Mos-
cow's leadership in spite of the costs and risks involved is based prin-
cipally on the following elements:
a. A conviction that Moscow's policies are inimical to Communist
China's national interests, and in particular that Moscow wishes to
retard or prevent Communist China's development as a leading world
power. The Chinese Communist leaders see Moscow's unwillingness
to confront the US as involving the postponement of such national goals
as the seizure of Taiwan. These differences are compounded by the
xenophobic emotions inherent in the Chinese racial, nationalistic, and
cultural pride and practices.
b. A determination that Peiping must be accepted as an equal partner
in the formulation of Bloc policies.
c. A conviction that Moscow is becoming increasingly revisionist and
bourgeois, abandoning classic revolutionary goals and destroying the
militancy of the world Communist movement. The Chinese are par-
ticularly outraged at what they interpret as attempts to temporize with
the US arch-enemy.
d. A conviction that in the present historical stage the victory of
communism will be won chiefly in the underdeveloped areas of the
world, and that the militant "path of Mao Tse-tung" provides the best
blueprint for the struggle in these areas.
e. A conviction that Moscow's "revisionist" policies are unacceptable
to significant elements in other Communist parties (particularly those
parties out of power) and even in the Soviet Party itself. This factor,
together with restiveness in many parties to Soviet domination, prob-
ably nurtures the conviction of the Chinese Communist leaders that
they will inevitably prevail.
25. The present Sino-Soviet relationship can be characterized as one
of de facto break. The two regimes have long been at odds on a wide
range of issues. Party and state contacts between them are minimal.
They are engaged in competitive proselytizing within the world Com-
munist movement. During the past year, polemics have become in-
creasingly bitter and explicit. There are even some indications of grow-
ing tensions along the Chinese-Russian borders.
SECRET 9
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26. Nevertheless, both parties have been at pains to avoid a formal
break.5 Each continues to preach the unity of the Communist move-
ment. This is in part a device to throw on the other the blame for the
disunity now apparent; both parties wish to avoid a situation which
might involve a formal renunciation of the alliance and to avoid the
onus for having forced such a break if it does in fact ensue. They share
a mutual concern for the advantages that a formal break would give
their common enemies, and for the damage it would do the world Com-
munist movement. Additionally they wish, in view of their long common
border, to keep some limits on hostility. Both sides probably hope that
eventually, perhaps after the departure of the rival leadership, the
other will see reason and make the critical concessions necessary to re-
store unity.
27. Bilateral Sino-Soviet discussions of differences may take place in
the immediate future, but in any discussions that transpire the Chinese
are likely to be truculent and assertive. Moscow will endeavor to tem-
porize and avoid a dramatic and adverse denouement of the Sino-Soviet
conflict, but will feel obliged to react forcefully if pushed hard enough.
Thus a formal break is possible. It is also possible that at any time
negotiations may result in a temporary damping down of the public
aspects of the dispute, but the fundamental issues will persist. Sino-
Soviet relations will continue to be plagued with tensions that will lead
to continuing estrangement and have correspondingly adverse effects
for Bloc and international Communist unity.
28. The practical effects of the dispute on Communist China will con-
tinue to be serious. China's industrial plant and military establishment
will continue to suffer from lack of Soviet cooperation. Petroleum
products now make up about half of China's imports from the USSR,
and a further cutback here, especially in aviation fuel and high quality
lubricants, would for a time seriously reduce Peiping's military capa-
bilities. A cutoff of spare parts for Soviet equipment would also handi-
cap both military and industrial progress. New foreign and domestic
sources of supply could, however, probably be developed, in some cases
fairly rapidly.
Some con-fusion has surrounded assessments of the Sino-Soviet "break" and
of its consequences. This paper seeks to make the following distinctions:
1. A break already exists in Moscow-Peiping relations-and may have existed
since at least 1960: this we call a de facto break (paragraph 25).
2. Most discussions of whether or not a Sino-Soviet break will occur have been
directed, in our view, to what should be called a formal break. Such a formal
break could take many forms: unlike the Soviet-Yugoslav situation of 1948,
there is, technically, no international Communist body from which to expel the
CCP, or the CPSU. There could, however, be a severance of party relations, a
formal and specific denunciation (possibly emanating from separate interna-
tional Communist conferences), or any circumstances in which at least one of
the protagonists states officially that a formal break now exists.
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29. Continuing estrangement will almost certainly cause Khrushchev
increasing embarrassment within the CPSU, and also lead to more com-
petition for adherents and influence throughout the world Communist
movement, with China tending increasingly to assert itself as a rival
center of truth, authority, and example. Peiping already appears to
have displaced Soviet influence in North Korea. North Vietnam will
continue to attempt to profit from its "neutralism," but it appears to be
drifting toward Peiping. In Cuba, it is likely that the Chinese posture
encourages Castro to reject Soviet advice which conflicts with his own
predilections. Peiping will press its campaign to win over the leftist
militants throughout non-Communist Asia, Africa, and Latin America,
lining up the ad hoc support of parties where it can and settling for
splinter factions elsewhere, e.g., Brazil. Further Chinese gains are prob-
able in the Japanese and Indonesian Communist parties, at the expense
not only of pro-Soviet factions but of Soviet interests and influence in
those countries. We definitely do not expect the balance in the world
Communist movement to shift to Peiping in the next two years-or,
perhaps, ever.
30. Peiping may attract enough adherents in the underdeveloped
areas of the world to cause the Soviets to adopt a somewhat more
militant public posture in these areas, in an effort to outbid the Chinese
for the support of selected revolutionary movements and to prove them-
selves true Marxist-Leninists. However, the USSR's actions in the Far
East (as elsewhere) will almost certainly continue to spring principally
from considerations of Soviet security and interests, not the status of
relations with Peiping. Indeed, even if there were a formal Sino-Soviet
break, the USSR would almost certainly intervene in any US-Chinese
hostilities which threatened to establish a non-Communist regime in
China along the USSR's borders.
E. Foreign Affairs
31. Peiping is engaged in a struggle with Moscow for influence in the
Communist Parties of the underdeveloped nations of Asia, Africa, and
Latin America. The Chinese Communists believe that they are uniquely
fitted to lead this major portion of the world's peoples into communism
because of their own experience, their correct interpretation of Marxism-
Leninism, and their status as a nonwhite, non-European people who
have been victims of imperialism. According to Peiping's reasoning,
when these nations are brought into the "Socialist camp," the Western
capitalists, deprived of their captive markets, will be unable to retain
their positions of power, and socialism will triumph.
32. Peiping recognizes that this is a long-term objective which at pres-
ent it lacks the capability to bring about. It can provide very little ma-
terial aid to Communist revolutions except in countries on which it
borders, e.g., Laos. Thus a limited and somewhat opportunistic policy
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is followed, with the aim of reducing the US and Western presence in
Asia and (with lesser priority) the rest of the underdeveloped world.
/33. Peiping's foreign policy objectives can be roughly distinguished
by the amount of risk the regime is prepared to take to carry them out.
The obvious first rank objective is the preservation of the regime and the
protection of its existing boundaries. For these purposes Peiping is
willing to go to war, almost regardless of the odds. If US or SEATO
troops approached its borders through Laos or North Vietnam, Peiping
would almost certainly be ready to commit its forces openly, unless in
the particular circumstances it saw greater advantage in more covert
military operations. The acquisition-of Taiwan falls in the second rank
of objectives-those for which Peiping is fully prepared to use overt
military force, but only when the prospects of success are judged to be
high. To achieve this goal, Peiping is prepared to run fewer risks and
is particularly anxious to avoid direct conflict with the US. Peiping
almost certainly will not attempt to seize by military force either Taiwan
or any of the major offshore islands which it believes the US would help
Taipei to defend.
34. For its broader and longer range goals of spreading communism
throughout the underdeveloped world, Peiping is probably not prepared
to accept any substantial risk, although it must be noted that Peiping
tends to estimate the risks involved in supporting "wars of national
liberation" much lower than does Moscow. Peiping apparently does
not intend to undertake overt conquests of foreign lands in the name of
communism, but intends to let indigenous revolutionaries do the fight-
ing and the "liberating." Peiping is prepared to train foreign nationals
in guerrilla and political warfare, and will back revolutionary move-
ments to the extent of its limited capabilities with equipment, funds,
propaganda, and support in international affairs.
35. Peiping's approach to world affairs is strongly influenced by Chi-
nese nationalism. Chinese nationalistic feelings have been an asset to
the regime domestically and have shaped certain courses of foreign policy
quite apart from, and sometimes contrary to, the interests of commu-
nism. The Sino-Indian confrontation in the Himalayas is a case in
point. Here, Chinese national interests and motivations took precedence
over the interests of the Indian Communist Party.
36. During the next two years, Peiping will remain active in south-
east Asia. In Laos, Peiping will continue to encourage and aid North
Vietnamese and Pathet Lao efforts to dominate the country. There is
already a Communist Chinese presence in the country, and the nucleus
of a Chinese-built road network is designed to increase ties to mainland
China. These roads could also facilitate the movement of Chinese
troops if an eruption of fighting in Laos were to bring US or SEATO
forces into the area. Peiping will encourage and support subversive
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activities in Thailand, and will probably try to exploit racial and other
tensions in the emerging Federation of Malaysia. In some parts of
southeast Asia, the overseas Chinese provide an instrument for Peiping,
but they are unpopular in the host countries and in many areas appear
to be less responsive than formerly to Peiping. Peiping's long-range
goals almost certainly envisage the gaining of dominant influence over
the area and the exploitation of its economic riches.
37. Communist China's policies toward its two greatest Asian neigh-
bors, India and Japan, are likely to continue along approximately the
present lines through the next two years or so. The Chinese Commu-
nist leaders wrote off Nehru some time ago as a bourgeois nationalist
whose usefulness to them has passed and who therefore need no longer
be courted. They now are aiming to diminish India's stature as an
alternative model of development and to undermine its status as a leader
of the nonaligned and Afro-Asian blocs. They almost certainly have
no intention of invading India beyond Chinese-claimed territory during
the next two years, though they will respond vigorously to anything
they consider a provocation. In any case they will carry on a continu-
ous political campaign against the Indian leadership. In the case of
Japan, Peiping will simultaneously strive to gain dominant influence in
the Japanese Communist Party; nudge the Socialists and other leftists
into more militant and anti-US courses; bid for Japanese businessmen's
support, by dangling trade prospects before them; woo the Japanese
public with propaganda and people-to-people diplomacy; and demand
recognition from the existing Japanese Government.
38. Communist China will continue to exert considerable influence in
Asia, almost regardless of developments in its domestic and foreign
policies. The depressed conditions of life in China have somewhat tar-
nished the image of China held widely in Asia. However, this effect will
probably prove short-lived, especially if mainland China regains some
of its former economic momentum. More important, fear of Commu-
nist China will almost certainly continue and may grow, Even now,
the policies of several Asian countries, especially Burma and Cambodia,
are conditioned in important measure by desire not to provoke Peiping.
39. Fear will also be increased by detonation of Communist China's
first nuclear device, though the psychological impact will not be as great
as would have been the case had the Chinese detonation come suddenly
a few years ago. Initially at least, most Asian governments will make
new and most earnest inquiry into US intentions for the defense of east
Asia and the western Pacific.
40. Peiping's intense anti-Americanism is deeply rooted both in Com-
munist doctrine and in militant Chinese nationalism. This attitude will
almost certainly persist as long as the present group of leaders remains
in control, and there is no reason to anticipate a softening by their suc-
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cessors. Peiping remained antagonistic toward the West even in the
winter of 1961-1962, when the regime's fortunes were in many ways at
their lowest ebb and it had fears for its own security. The regime might
make minor concessions for expediency, but in the foreseeable future it
will almost certainly not abandon its basic anti-American attitude.
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ANNEX A
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ANNEX A
ECONOMIC
1. ECONOMIC PERFORMANCE IN 1962
1. In 1962, the moderate economic policies adopted in the winter of
1960-1961 were continued. Private activity in agriculture and in rural
trade was still permitted. Major industrial goals included the expansion
of production to support agriculture and the expansion of output in
light industry, handicrafts, and the mining and timber industries. Em-
phasis was placed on improvement of quality, on cost reduction, on in-
creases in output per worker, and on better care of equipment.
2. The communique issued after the 10th Plenum of the 8th Party
Congress, which met secretly in Peiping on 24-27 September 1962, sug-
gests that the retrenchment and consolidation prevailing in 1961 and
1962 will be generally continued for the time being, but that some tight-
ening up of discipline in economic affairs is considered necessary to
direct and mobilize resources as a condition for a more organized devel-
opment effort. To these ends, the party appears to have decided (a) to
retain recent emphases on more conservative management policies for
industry, policies which are similar to those that prevailed in 1957; (b)
to retain the "leap forward" and "communes," at least as concepts; and
(c) to permit no further retreat in collectivization of agriculture, and as
a corollary, to restrict private "capitalist" tendencies in the countryside.
3. Economic information, either officially released or independently
acquired, continues to be extremely fragmentary. Official claims note
advances in some areas of production in 1962; refugee, diplomatic, and
traveler reports indicate improvement in the supply of some foods and
other consumer goods; and weather data suggest slightly better growing
conditions during the year for the country as a whole. These bits and
pieces, together with Peiping's more optimistic outlook since September,
suggest moderate improvement in an extremely difficult situation. Even
with improvement in 1962, serious problems still remain in every major
sector of an economy that probably is no more productive than it was
in 1957.
A. Agriculture
4. A slight increase in production of grain appears to have occurred
in 1962,6 but from 1960 and 1961 levels which were abnormally low. Pro-
duction of grain in 1962 is estimated to have been on the general order
'Our estimates of output are based primarily on weather data, although the
probability of somewhat larger acreage of fall grain crops and slightly increased
supplies of chemical fertilizer also have been taken into consideration.
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of the 185 million metric tons harvested in 1957, when the population
was about 10 percent smaller. The average diet in the 1962-1963 con-
sumption year has probably improved above that of the previous con-
sumption year, largely as the result of increased production on private
plots. The food situation remains stringent, but no longer desperate.
5. The expected level of grain imports by China in the 1962-1963 con-
sumption year (July-June) suggests that domestic production and stocks
are far from comfortable. Contracts have already been signed for de-
livery of about 3.3 million metric tons of grain during the first six months
of 1963-about the amount imported during the same period of 1962.
We estimate that five million tons of grain will be imported during the
1962-1963 consumption year. This is a million tons less than in the
previous year but still amounts to about four percent of total food grain
consumption. By comparison, China exported about one million tons
of grain in 1957.
6. The acreage planted to cotton in 1962 was about half that planted
in 1957, and the output was correspondingly only about half the 1.64 mil-
lion tons produced in 1957.
B. Industry
7. In 1962, the Chinese Communists seem to have achieved moderate
success in industry. Compared with 1961, there appear to have been
increases in the output of priority goods such as chemical fertilizer,
some farm implements, and many types of light industrial and handi-
craft products. Output per employed worker probably increased some-
what, although in large part this resulted from laying off excess labor
and thereby adding to the problem of unemployment. Technical and
managerial personnel were accorded greater prestige and responsibility.
Problems of quality, cost, and maintenance of equipment eased some-
what, but still persist as obstacles to industrial efforts.
8. The available evidence, which is fragmentary, suggests that total
industrial production in 1962 was about equal to that of 1957, or roughly
half the 1959-1960 peak. Production of agricultural chemicals, some
farm equipment and tools, and a number of light industrial products
was considerably above the level of 1957, but production of the machine
building and textile industries was below that of 1957. Production of
steel and electric power may have been at roughly the level of 1958.
9. Shortages of food for industrial workers, the insufficient supply of
agricultural raw material, and the regime's shift to priorities in favor of
agriculture account for only part of the difficulties in industry. In addi-
tion the industrial sector has been severely damaged by the excesses of
the "leap forward," which produced neglect and abuse of equipment,
shoddy construction, and wasteful imbalances in the capacity of inter-
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dependent enterprises and industries. Greatly compounding all these
problems was the withdrawal of Soviet technicians, the drop in Sino-
Soviet trade, and the drying up of opportunities for study in the USSR
and Eastern Europe. The cumulative effect of these handicaps has
been serious.
10. Many industrial plants are producing far below capacity. The
reason for this situation in light industry is clear: the inability to obtain
the necessary raw materials from agriculture. The explanation for
idle capacity in heavy industry is more complex. Some heavy industrial
plants-for example, aircraft, shipbuilding, truck, and chemical fertilizer
plants-are producing below capacity because of the lack of spare parts,
key components, raw materials, or technical expertise. These deficiencies
exist in the plants themselves or in industries supplying components and
raw materials. In addition, the drastic cutback in the investment pro-
gram and the sharp decline in industrial output has lessened the need
for basic heavy industrial items such as steel, electric power, construc-
tion materials, and some types of machinery. In the industries support-
ing agriculture, however, especially the chemical industry, additional
plant and managerial-technical personnel are sorely needed.
11. We believe that factories producing military equipment have been
able barely to keep up with peacetime attrition on some important items
of military equipment. Production rates at some existing facilities may
have recovered somewhat from the low levels of 1960-1961, but except
in the electronic field we believe that little or no headway was made in
the program to modernize the equipment of the armed forces. Almost
certainly, no significant additions were made to the capacities of indus-
tries producing conventional armaments.
12. It is estimated that the total availability of petroleum products in
Communist China in 1962 was slightly less than in 1959, the last year
for which there is reliable data, but supplies apparently were adequate
to meet the essential needs of both civilian and military consumers,
though on an austere basis. Of the total supply, about 70 percent was
produced domestically, as compared with 50 percent in 1959. Commu-
nist China, as far as is known, has not produced aircraft fuels except
on a trial basis, and continues to rely on imports from the USSR. The
Chinese, however, have the capability of producing jet fuel, although
such production would necessarily reduce output of other petroleum
products, and difficulties with quality probably would be encountered.
China probably does not have the capability to produce high-test aviation
gasoline and certain high-quality lubricants.
C. Foreign Trade
13. The reduction in agricultural products available for export, the
deterioration in Sino-Soviet relations, the cutback in investment, and
the decline of industrial output have combined to lower China's total
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volume of trade and to alter its direction and composition sharply.
Total trade in 1962 may have amounted to as little as $2.5 billion, com-
pared with $4.2 billion in 1959. Trade with the USSR declined from a
peak of $2.0 billion in 1959 to perhaps as low as $600 million in 1962.
Imports of petroleum products, almost all from the USSR, declined from
3.2 million metric tons in 1961 to 1.9 million tons in 1962, although
imports of aircraft fuels and high-quality lubricants in 1962 continued
at the level of 1961. The regime is now concentrating on imports of
foodstuffs and raw materials; machinery and equipment imports fell off
about 85 percent between 1959 and 1962. In November 1962, the Chi-
nese Communists concluded a long-term trade agreement with Japan
and throughout the year were actively contacting Western suppliers of
industrial products, but few deals of any size or importance have been
concluded as yet. China's foreign exchange position remained tight in
1962, but the regime managed to meet its obligations promptly.
D. Transportation
14. In 1962 all forms of transportation in Communist China appeared
to be operating at about the 1961 level or lower, with the possible excep-
tion of coastal shipping, which is reported to have been more active
during the latter part of the year. Although efficiency and capacity
continued to be hampered by poor administration, low worker morale,
insufficient and low-quality fuel, and lack of materials for maintenance,
the transport system is apparently supporting the economy with less
difficulty than in recent years, largely because decreased economic ac-
tivity has greatly reduced demands on the system. The impressive
earlier program for extending China's transportation network, which was
abandoned in the collapse of the "leap forward," remained in abeyance
during 1962. Except for construction on militarily significant roads in
Yunnan and Tibet, there was little construction during 1962 on major
railways and highways. Production of locomotives, freight cars, and
trucks remained at very low levels. Maintenance and production
of spare parts for transportation equipment probably improved little
if at all.
E. Education and Science
15. In the fall of 1962, the regime drastically curtailed student enroll-
ment at all levels and closed many substandard schools. As a result,
some five million high school and college-level students were thrown
on the already saturated labor market. This has caused great disap-
pointment among students and their parents. The drastic decision to
retrench was undoubtedly a difficult one for the regime to make; it was
probably taken to avoid a further diminution in the quality of education,
but it may eventually lead to even greater disillusionment and resent-
ment.
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16. A comprehensive 12-year plan for science, which was to have run
from 1956 through 1967, has been at least revised and possibly aban-
doned. In 1962, the regime began to woo the Western-trained scientists
who had been ignored or suppressed during the "leap forward." Em-
phasis is now being placed upon quality in scientific training and re-
search, and political interference in the scientific and academic com-
munity has been markedly reduced. The call for scientific support of
agricultural development seems to be increasing.
A. Short-Term Prospects
17. The Chinese Communist leaders seem to have drawn confidence
from having weathered the extreme crisis of the past three years and
have entered 1963 in a mood of cautious optimism. However, they fore-
cast no major increases in production in 1963, and are hoping for an
"upsurge" in 1964 if all goes well, hinging on their success in securing
further increases in grain output while restoring production of indus-
trial crops. Their foreign trade negotiations also seem pointed towards
1964; their trade missions in western Europe have frankly stated that
they are exploring equipment availabilities on which firm import de-
cisions will not be taken before the fall of 1963.
18. While only modest economic growth at best is expected in 1963,
the outlook for 1964 and 1965 is obscure. The generally depressed agri-
cultural situation still colors the entire economic outlook, although,
given average weather, further moderate agricultural recovery seems
likely. The prospects are fair for restoring industrial crop produc-
tion, and the resulting light industry expansion could increase indus-
trial output by about five percent annually in 1964-1965. Even greater
increases in industrial output might be secured if the regime can re-
orient its foreign trade to support a substantial expansion in capital
construction. With an apathetic population, low food stocks, unsettled
foreign trade relations, and heavy foreign debt service obligations, it
seems unlikely that China can organize the domestic and foreign re-
sources for a rapid increase in investment. But even without increased
investment, greater utilization of presently idle capacity could increase
industrial output by 5-10 percent a year in 1964-1965.
B. Future Economic Policy
19. Communist China's economic prospects depend heavily on whether
the leadership in Peiping will postpone its goal of transforming China
into a modern industrial and military power long enough to insure a
safe margin in agricultural production. A Communist state has never
before given first priority to agricultural development. The leaders
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have certainly been burned by the catastrophic failure of the 1958-1960
"leap forward" and will presumably be extremely chary of risking a
repetition. The composition of the leadership's top echelon remains es-
sentially unchanged, however, and its record is such that a return to
radical, politically charged programs cannot be ruled out. The likeli-
hood of a return to such programs will increase in the longer term if
progress toward cherished goals appears to lag.
20. In November 1962, several high-ranking officials, including four
Politburo members, were appointed to the State Planning Commission,
which suggests that a high-level task force has been formed to draw up
a Third Five-Year Plan. The plan, when and if it appears, is likely to
be more of a political than a planning document, for the uncertainties
confronting the regime would seem to preclude detailed long-term plan-
ning. Its goals are likely to be general and qualitative rather than
specific, and the regime would probably view it as an important instru-
ment for attempting to inspire confidence, unify the country, and gal-
vanize support.
C. Agriculture
21. The regime intends to continue to give priority to agriculture, and
Peiping appears to be thinking in terms of an agricultural moderniza-
tion program that will require 20 to 25 years. Certain elements of this
program seem reasonable and feasible for expanding farm output, such
as the emphases on research and extension facilities, promotion of chem-
ical fertilizer, electrification, and irrigation. Other pronouncements
calling for rapid mechanization, strengthened collectivization, and
"politics leading economics" could lead to adverse effects on farm out-
put through inflexible management, lack of peasant production incen-
tives, and a concentration on releasing rural manpower for industry.
22. Even if the reasonable elements in the leadership prevail, there
still can be no speedy solution in agriculture. If increased supplies
of chemical fertilizer and other inputs are to yield maximum results,
they must be accompanied by improved varieties of seeds and improved
farming practices. Research and extension services (and, above all,
the trained technicians to man them) cannot be created overnight,
nor can they be expected to bear fruit on any scale within less than
a decade. Furthermore, it remains to be seen just how much effect
the recent steps toward centralization will have on the crucial question
of peasant incentives.
D. Industry
23. Current emphasis on industries producing goods for agriculture
and for consumers is likely to continue for at least the next year or so.
Some branches of heavy industry that cannot now produce enough to
meet the requirements of the priority sectors of the economy are likely to
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industrial raw materials. Japan would represent a complementary
trading partner for the Chinese, although Western Europe would be
a keen competitor for the Japanese. Large-scale diversion of Chinese
trade from Bloc to non-Bloc countries would involve initial costs to the
Chinese of developing new markets for their exports and new sources
for their imports, and would require costly and time-consuming ad-
justments to Western specifications for most machinery imports.
More important, such a diversion of trade would place restraints on
Chinese foreign policy, including the subordination of political goals
in trade with Japan, and the willingness to supply technical data to
foreign businessmen, to accept non-Bloc technicians in China, and to
send Chinese personnel outside the Bloc for training.
27. The outlook for trade with Japan is obscure, in spite of the
signing of a long-term trade agreement in November 1962. Japan could
be a highly profitable market for low-price, bulky minerals such as
salt, magnesite, coal, and iron ore that are hard for China to sell else-
where. But erratic and unstable political relations have discouraged
potential Japanese industrial users from regarding Communist China
as a source for large quantities of such products. Nevertheless, Sino-
Japanese trade has been rising slowly and may continue to expand.
28. Peiping would probably wish to reserve a substantial amount of
foreign exchange for future grain purchases during 1963-1965, but
during this period Peiping is obligated to liquidate a Soviet trade debt
of about $500 million, and to pay nearly another $500 million on out-
standing grain credits and on existing food purchase commitments.
These figures suggest little margin for an increase in imports.
F. Education and Science
29. Although it has done much to correct damaging excesses in the
fields of education and science, the regime now faces the difficult and
delicate task of stretching the limited resources of the intellectual com-
munity to achieve immediate production results-in such fields as the
mechanization of agriculture and the modernization of weapons. At the
same time training and development programs of sufficient depth and
scope must be undertaken to overcome China's backwardness across a
wide range of disciplines. Communist China has isolated itself from
much current scientific development throughout the rest of the world,
except indirectly through scientific journals.
30. Communist China's research and development effort still suffers
from a very critical shortage of scientific and technical manpower in
the upper levels of competence and experience. Almost as critical is
the shortage of experienced scientists capable of independent research
but with abilities below those of the top rank; these are the men who
form the main body of researchers in a mature scientific community.
On the other hand, China is much better supplied with persons trained
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 as technicians and highly specialized engineers. China had a great
need for such types and has used them in providing technical services
to the economy, particularly in engineering development work aimed
at adapting foreign designs and processes to conditions in China.
31. The total number of college graduates by itself is impressive-
over one million, with nearly 600,000 in scientific and technical fields,
including medicine and public health. These figures in themselves,
however, are not true indicators of China's research and development
capabilities because the average quality of the graduates is not high.
Communist China is believed to have some 2,000 to 3,000 highly quali-
fied scientists in research and development. Among the scientific lead-
ers and the main body of experienced scientists and technologists, there
exists a useful degree of competence in practically all scientific and
engineering fields. The regime thus has the resources to assemble a
team of researchers competent to attack almost any objective, but not
enough to man many teams effectively at the same time.
32. The regime's new attitude toward research and training is prob-
ably producing an improved environment for research and development
and should permit reasonably effective scientific and technological sup-
port during the next few years.
G. Population
33. Regardless of what approach the Chinese Communists may take
to economic recovery in the next five years, the population pressure on
food resources will continue to be a major underlying problem. The
rate of population growth averaged an estimated 2.4 percent from 1953
through 1958, slowed down to 1.5 to 2.0 percent in recent years, and
probably will rise if average diets improve. Marxist doctrine would
make it awkward for the regime to push an all-out birth control cam-
paign. Even if this were not so, Peiping may feel it could do little to
control the birth rate effectively, especially in rural areas where social
beliefs are hard to change and medical services are poor. Since the
spring of 1962, a low-key campaign has been conducted in urban areas
to encourage late marriages and family planning, but this policy will
have only a negligible effect on the national birth rate within the next
decade.
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ANNEX B
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ANNEX B
ORDER OF BATTLE TABLES
TABLE 1
AIR FORCES
(As of 1 April 1963)
TYPE OF AIRCRAFT
CCAF
ROLE
NUMBER a
TOTAL
FAGOT (MIG-15) .................
Fighter (Day)
690
FARMER (MIG-19) ................
Fighter (Day)
60
FRESCO (MIG-17) ................
Fighter (Day)
815
FRESCO D (MIG-17D) b ...........
Fighter (Day)
145
1,710
BEAST (IL-10) .................... Ground Attack c 40
40
BAT (TU-2) .......................
Light Bomber, piston
100
BEAGLE (IL-28) ...................
Light Bomber
175
BULL (TU-4) ......................
Medium Bomber, piston
15
290
C46/C47 ............................
Transport
30
CAB ...............................
Transport
35
COACH ............................
Transport
35
COLT ..............................
Transport
25
COOT ..............................
Transport
2
CRATE ............................
Transport
45
172
TOTAL ............................................................... 2,212
CCNAF
FAGOT ............................ Fighter (Day) 170
FRESCO ........................... Fighter (Day) 70 -
FRESCO D ......................... Fighter (Day) 30 270
BAT ............................... Light Bomber 5
BEAGLE ........................... Light Bomber 150 155
CAB ............................... Transport 15
COLT .............................. Transport 5
CRATE ............................ Transport 5 25
MADGE ............................ Reconnaissance 10 10
TOTAL ............................................................... 460
TOTAL AIR FORCE PERSONNEL ............ 82,000
a Figures rounded to nearest five.
'FRESCO D has a limited all-weather capability.
'In addition, a unit of 30 MIG-15 (FAGOTs) is specially trained in ground at-
tack. All FAGOT/FRESCOs are adaptable to ground attack, but have poor
range and load-carrying characteristics.
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SECRET
TABLE 2
NAVAL FORCES
(As of 1 April 1963)
Old Destroyer/"GORDYY"
Destroyer Escort/"RIGA" .
Submarine/"W" ..........
4
4
21
or
Soviet transfers
Chinese-built
Chinese-built
22
Submarine/"S-1" .........
4
Soviet transfers
Submarine/"M-V" ........
3
Soviet transfers
Patrol Escort/Various .....
Classes
15
Submarine Chaser/ .......
25
6 units Soviet trans-
"KRONSHTADT"
fers; 19 units Chi-
nese-built
Fast Patrol Boat/ ........
"SHANGHAI"
12
Chinese-built
Motor Gunboat ...........
44
Chinese-built
Fleet Minesweeper/ .......
14
12 Chinese-built
"T-43"
2 Soviet transfers
Minesweepers, Coastal ....
(Old)
4
Minesweeper, Auxiliary ...
20
Some Chinese-built;
some taken over
in 1949
Obsolescent; built in 1941.
Extensive Soviet technical and ma-
terial assistance involved.
Extensive Soviet technical and ma-
terial assistance involved. Com-
pletion of 4 units following Soviet
withdrawal is believed to have
been accomplished by the Chi-
nese.
Obsolescent; built in 1941.
Coastal submarine. Obsolescent.
Soviet aid needed for Chinese-built
units.
Soviet aid needed for Chinese-built
units.
Some Soviet components used for
Chinese-built units.
Soviet aid involved in Chinese pro-
gram.
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SECRET
TABLE 2 (Continued)
ORIGIN
Obsolescent; US WW-II design;
9 additional LST's in merchant
Medium Landing Ship ....
13
service.
Obsolescent; US WW-II design;
(LSM)
11 additional LSM's in merchant
Landing Ship Infantry ...
16
Taken over in 1949
service.
Obsolescent; US WW-II design;
(LSIL)
8 fitted for minelaying; 5-6 fitted
Utility Landing Craft ....
11
as minesweepers; 5-6 fitted with
rocket launchers.
(LCU)
Landing Craft Mechanized
200
(LCM)
Auxiliaries/Various .......
57
All but 3 taken over
All but 3 of WW-II (or earlier)
Classes
in 1949
design.
Service Craft/Various ....
380
Mostly Chinese-built
Limited to inshore patrol and serv-
Classes
ice craft.
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GROUND FORCES
(As of 1 April 1963)
ESTIMATED
UNITS STRENGTH
Infantry Divisions ............................... ....... 107 69 @ 15,000
38 @ 14,000
3 infantry regiments
1 artillery regiment
1 tank-assault gun regiment (in 69 divisions)
1 AA battalion
1 AT battalion
Principal weapons:
24 light and medium field artillery pieces
39 x 57/76-mm AT guns
120 light and medium mortars
12 light AA pieces
32 medium tanks
12 self-propelled assault guns
Armored Divisions ............................. ......... 4 @ 6,600
2 amored regiments
1 infantry regiment
1 artillery regiment
Principal weapons:
10 heavy tanks
80 medium tanks
14 self-propelled assault guns
20 light and medium field artillery pieces
12 light AA pieces
57 light and medium mortars
Airborne Divisions ....................................... 3 @ 7,000
Cavalry Divisions ....................................... 3 @ 5,000
TOTAL LINE DIVISIONS .......................... 117
Field Artillery Divisions ................................. 12 @ 5,500
1 @ 7,000
1 @ 7,800
3 gun or gun-howitzer regiments
1 AA battalion
Principal weapons:
108 pieces 122-mm to 152-mm
12 light AA pieces
Antitank Divisions ...................................... 3 @ 3,400
4 antitank regiments
96 56-mm to 100-mm AT guns
Antiaircraft Divisions ............................... ... 9 various
Border Defense and Military Internal Security Divisions 15 7,000
TOTAL GROUND FORCE PERSONNEL ......... 2,632,000
NOTE: The Ground Forces are organized into 34 armies and a number of inde-
pendent divisions and other units.
28 SECRET
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 Approved For Release 2011/01/19: CIA-RDP1 OX00001 R0001 00010012-3
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