CS/PRES BRIEFING TO CONFERENCE OF EMERGENCY PETROLEUM AND GAS ADMINISTRATION, (OFFICE OF OIL AND GAS, DEPT. OF INTERIOR) SHOREHAM HOTEL, 0950-1030 7 MARCH 1967

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00827A000800010001-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 106
• Document Creation Date: December 9, 2016
• Document Release Date: June 26, 2000
• Sequence Number: 1
• Publication Date: March 1, 1967
• Content Type: BRIEF

Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
Other
Activity
Approved For RJOase 2000/08/07 : CIA-RDP79TQOR27A000800010001-8
 Approved For Release 2000/08/07 : CIA-RDP79TOW27A000800010001-8
CS/PRES Briefing to conference of
Emergency Petroleum and Gas Administration,
(Office of Oil and Gas, Dept. of Interior)
Shoreham Hotel, 0930-1030 7 March 1967
(Also used "Indications of Instability in Western
Hemisphere" from Rivers Briefing 1 Mar 67)
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Relase 2000/08/07 : CIA-RDP79T00O7A000800010001-8
AGENDA
NATIONAL HEADQUARTERS - EPGA -,CONFERENCE.'
Shoreham Hotel, Washington., D. C.
March 7-8, 1967
MARCH 6 MONDAY Advance Registration & Reception
MARCH 7 TUESDAY
(Hotel lobby)
P.M. - 9:00 P.M.
8:00
- 9:00
Registration
9:00
- 9:15
Opening and Introductions
T. W. Nelson (Mobil)
Conference Chairman
0. P. Lattu (OOG)
Conference Co-Chairman
9:15
- 9:30
Remarks
Hon. Stewart L. Udall
Secretary of the Interior
9:30
- 10:30
Intelligence Briefing
(c IA) STATINTL
10:30
- 10:45
Break
10:45
- 11:30
Military Petroleum Planning
for Limited War
Lt. Gen. R. D. Meyer (JCS)
11:30
- 11:50
Civil Defense Preparations in
Industrial Facilities
Joseph Romm
Acting Director, OCD
11:50
-
(Speaker)
ADM. D. L. McDonald, USN
Chief of Naval Operations
1:15
- 2:30
Counterinsurgency Activities
Col. William H. Crosson, Jr.
(U.S. Army, JCS)
2:30
- 3:00
Resource Management and Economic
Stabilization in Limited War
Leonard A. Skubal
Chief, Econ. Stabilization
Division, OEP
3:00
- 3:15
3:15
- 3:45
Organizing for International
Oil Emergencies
David J. Jones (SONJ)
3:45
- 4:45
John Ricca (OOG)
4:45
-
The EPGA Operating Manuals
Review Program for 2nd Day
Announcements, etc. Adjourn
T. W. Nelson (Mobil)
6:30
- 8:00
4qw, 8: oo
-
Dinner and Program
"The NORAD Story"
Col. H. A. Davis, Chief
NORAD Briefing Team
Approved For Release 2000/08/07 : CIA-RDP79T0682YA8MD?V(~OQegense
omman
 Approved For Relse 2000/08/07 : CIA-RDP79TOdWA000800010001-8
MARCH 8 - WEDNESDAY
8:30
- 9:45
General Background - Section I
C. M. Case (OOG)
R. E. Geiger (Mobil)
9:45
- 10:15
Office of Program Coordination
M. W. Belaga (SONJ)
H. R. Gregg (SONJ)
10:15
- 10:30
Break
10:30
- 11:00
Staff Offices
(Secretariat, Adm. Services,
Stat. Services, Information,
General Counsel, Finance
Counselor)
V. M. Brown (NPC)
11:00
- 11:30
Domestic Petroleum Operations
John Bell (Humble)
J. W. Winfrey (Humble)
11:30
- 11:45
Foreign Operations
L. W. Finlay (SONJ)
11:45
- 12:00
Gas Operations
E. H. Fisher (PG&E)
12:00
1:30
Lunch
1:30
- 2:00
Support Services
W. H. Klarquist (SOCAL)
H. B. Douglas (SOCAL)
2:00
- 4:30
Discussion Groups
4:30
- 5:00
Reports by Asst. Adm's.,
Remarks and Adjournment
Meeting of Reg. Adm's, T. W. Nelson (Mobil)
RMR's, and Dep. Adm's. 0. P. Lattu (OOG)
John Ricca (OOG)
-2-
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Relese 2000/08/07 : CIA-RDP79T00W7A000800010001-8
1.
8.
Comparative GNP Grawth
2.
8.
Absolute Difference, GNP.
3.
9.
US/SOV GNP BY END USE
4.
9 '
Sov Military Expenditures
5.
10.
Breakdown of Sov R&D/Adv Wpns Spending.
6.
17.
ChiCom Leadership
7.
25.
MRBM
coverage from China
8.
30.
Map,
South Vietnam
9.
44.
Map,
Haiphong, and photo
10.
46
Map,
Laos
11.
48
Map,
Thailand
12.
50
Map,
Cambodia
13.
52
Map,
Indonesia/Malaysia
14.
55
Map,
South Asia
15.
62
Map,
Middle East
16.
84
Map,
Congo
17.
89
Map,
Southern Africa
18.
93
Map,
Nigeria
19.
97
Map,
Cuba
20.
9?9
Map,
Latin America.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Release 2000/08/07 : CIA-RDP79T0O627A000800010001-8
7 March 1967
CS/PRES BRIEFING FOR
Conference of Emergency
Petroleum and Gas Administration
(EPGA) Shoreham Hotel, 0930-1030
I. As a rule we do not discuss our operations, but
I would like to tell you, before Ramparts Magazine
does, that another one of our efforts is about to
be exposed.
A. The Soviets have finally managdd to decipher
some old scrolls they found in the part of
Eastern Turkey that was once Armenia.
B. The scrolls apparently contain a deposition
from a couple of snakes that at-,the instigation
of CIA, a shipmaster named Noah subverted a
sub-sonic dove to carry out an aerial reconnaissance
mission over territory near the present borders
of the Soviet Union.
II. A lot of important information today is no more
classified than the fact that the waters were receding
at the end of the Biblical flood. But when that informa-
tion has been evaluated by our intelligence services,
and matched up with other information obtained by
sensitive methods, we have to classify it "SECRET."
A. So from our point of view, the information I am
going to discuss with you today is "SECRET," and
you will see that classification on some of the
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Release 2000/08/07 : CIA-RDP79TOOWA000800010001-8
illustrations I will be using, but iw actually
iwuvwthe classification applies only to the
fact that this information came from--and
represents the analysis of--the Central
Intelligence Agency.
III. I propose to start with the Soviet Union and Communist
China, and then survey the trouble spots and potential
trouble spots elsewhere in the world.
A. There is a lot of ground to cover, so I will
dispense with any further introductory remarks.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Release 2000/08/07 : CIA-RDP79TOO927A000800010001-8
Military
I. The armed forces of the Soviet Union have been
engaged for several years in a dynamic program
of research and development, looking for some
kind of a breakthrough which would end the
present nuclear stalemate and swing the balance
of power in favor of the Soviet Union.
A. They have not achieved any such breakthrough,
and we have no indications that they may be on
the verge of one.
B. They are, however, achieving improvements
across the board in their strategic offensive
capabilities, in their defensive posture, and
even in their general purpose forces.
C. They remain behind the United States in the
number of warheads each can deliver on the
territory of the other.
1. There is a new deployment program in
progress for intercontinental ballistic
missiles, however, which represents a
Soviet effort to catch up numerically.
D. At the same time, as you may have seen in
the accounts of Secretary McNamara's congressional
testimony, the Soviets are deploying a defensive
system around Moscow designed to intercept
incoming ballistic missiles.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8 r3i)
 Approved For Release 2000/08/07 : CIA-RDP79T00$27A000800010001-8
1. We dornot consider this a very effective
system. It can be fooled, and it can be
overwhelmed. Also, insofar as defenses
intended primarily to intercept ballistic
missiles are concerned, we know of none
anywhere else in the Soviet Union except
around Moscow.
2. The rest of the country is still concerned
with defending itself adequately against
things like manned bombers and air-to-surface
stand-off missiles like our HOUND DOG.
E. But I think the important conclusion to be drawn
from everything that we know about the Soviet
military establishment is this:
F. The Soviets continue to increase their military
budget, their effort to achieve a major breakthrough,
and their general improvement of military posture.
1. Over the next few years, these improvements
are going to give the Soviet leaders increasing
confidence that they are creating their own
effective deterrent, in the form of a military
establishment whichcould undergo nuclear attack,
and come through with enough punch left to
destroy a significant portion of the population
and resources of the United States.
2. We doinot believe that the Soviets themselves
expect to be strong enough--even over the next
Approved For Relea 2000/O8J0?43IAAROR7i9T0O82l5AO 80OO100?din
 Approved For Reluse 2000/08/07 : CIA-RDP79T00$2,7A000800010001-8
of a war against the United States.
3. Such growing confidence in their offensive and
defensive capabilities, however, is kke one
of the factors which can lead to disastrous
miscalculations when nations are trying to
face each other down at the brink of a war
which no one may want.
4. It makes it necessary to maintain a continuing
watch on the men who now lead the Soviet Union,
their abilities, and their policies.
The Soviet Leadership
I. The men who threw out Khrushchev more than to
years ago have now had time to establish their
policies, their relationships, and their method
of operation.
A. What has emerged is essentially a collective
leadership.
1. There has been a steady enlargement in
the position of the Party feneral Secre-
tary, Leonid Brezhnev.
2. The present leaders, however, are a blend
of mixed interests and authority. They
have held together remarkably well, but
they have done it with undramatic,
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Relgse 2000/08/07 : CIA-RDP79T00$,y7A000800010001-8
middle-of-the-road policies. The
guiding principle appears to be: "Don't
rock the boat."
B. Decisions are determined by compromise, and
implemented with caution.
1. This avoids the erratic initiatives of
Khrushchev's time, and minimizes the
risk of major failures.
C. The present leadership has not vet demonstrated,
however, that it has designed a durable
governmental machinery which can make the
hard decisions and still avoid the tendency
toward the one-man rule of the Stalin and
Khrushchev eras.
1. Such highly political problems as economic
reform and resource allocation have not
been resolved.
2. And while the Kremlin outwardly maintains
an image of collective leadership, the subtle
struggle for power and position continues.
D. Nevertheless, I should point out at this juncture
that "not rocking the boat" in no senses implies
any weakening of the major thrust of Soviet foreign
policy--the extension of Russian influence beyond
the borders of the Soviet Union.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Rejse 2000/08/07 : CIA-RDP79TOQ$27A000800010001-8
Soviet Economy
II. The Soviet economy in some ways symbolizes this
temporizing on the part of the leadership. The
same problems are still there; reforms are being
attempted cautiously and gradually. As an example,
1. The cold war did not end with the fall of
Khrushchev, or the Cuban missile crisis, or the
nuclear test ban treaty, or the Sino-Soviet dis-
pute, or any of the other hopeful developments
of the past few years.
2. Rather it has changed its character as the full
meaning of the nuclear stalemate becomes apparent
to the Soviet leadership. It is more political,
more subtle, and slower moving.
3. But the goals remain the same. Marxism-Leninism
is still taught in the schools, and still forms
the thinking of the Pelitburo.
4. The low-keyed style of government under Brezhnev
and Kosygin is probably better suited to the cold
war as it is now fought than Khrushchev's flam-
boyance. They are inching forward along tested
lines of policy to reduce our power and influence
wherever they can do so, just as their predeces-
sors did, and perhaps more effectively.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For RMease 2000/08/07 : CIA-RDP79TOW27A000800010001-8
the U.S.S.R. is already in the second year of
a Five-Year Plan period, and the plan has not
yet been put in final form and approved.
CHART, COMPARATIVE GNP GROWTH
ik. The Soviet economy is somewhat less than half
the size of ours, and the Soviet Cross National
Product in 1966 was about 4S percent of the
U.S. CNP.
1. The CNP growth rate in Russia last year
was 7 1/2 percent, but this was due to
the largest grain crop in Soviet history.
2. The average growth rate of the preceding
five years was 4 1/2 percent, and the
outlook from now through 1970 is for
about 4 to 5 1/2 percent increase each
year.
CHART, ABSOLUTE DIFFERENCE IN GNP
3. Incidentally, the present leaders of the
Soviet Union are apparently too realistic to
continue Khrushchev's boasting about overtaking
the United States, and this chart shows why:
4. Even when the Soviet growth rate matches ours,
the absolute increase in GNP in the Soviet Union
is much smaller, because the percentage is on
a smaller base. As a result, they are not
reducing the absolute gap between the two
economies. If anything, it is growing.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-
 Approved For Release 2000/08/07 : CIA-RDP79TOO027A000800010001
CHARTi U.S. and SOVIET GNP BY END USE
5. Bodeen We cannot, however, just write off the
Soviet economy as an element of national power,
because they allocate their national product by
entirely different ground rules.
6. The Soviet population is about 20 percent bigger
than ours, but the consumer has to be satisfied
with only one third of ghe goods that our economy
produces for the consumer here.
7. Because of this, with an economy barely half the
size of ours, Soviet expenditures for defense
approach our own.
1 iatever the pro ems, and whatever the
SoyjQS'-'
achievements, we expect that theeeconomy
will give the military establishment whatever
is considered necessary by the Kremlin for
national security.
CHART.,, SOVIET DEFENSE EXPENDITURES
Military Expenditures
III. Soviet spending for military purposes and space
remained fairly stable from 1962 through 1965, but
it increased an estimated 7 percent in 1966. It
appears that another 4 percent will be piled on top
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Rase 2000/08/07 : CIA-RDP79T0?027A000800010001-8
of last year's increase in 1967.
A. The Soviets have announced a military
budget for 1967 which is the his;hest since
l'\\'orld !';rir II. It amounts to 14.5 billion
rubles--an increase of 1.1 billion over
the published figures for 1966.
1. The announced defense budget, however
includes only about 60 percent of the
actual military expenditures.
2. !;e estimate that total Soviet defense
spending in 1967 will be about 19.8
billion rubles, or about 54 billion
dollars in comparable terms.
CHART,..SPENDING FOR ADVANCED WEAPONS AND R&D
11. Soviet spending for advanced military and
space syster.ms--and particularly for Research
and Development--is growing much faster than
the total defense budget.
1. As this chart shows, it more than doubled
between 1958 and 1966.
2. These programs demand the best and
scarcest resources in plant, material,
and skilled technology. The military
demand for these resources highlights
the whole resource allocation problem in
the Soviet Union. But we expect that the
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Reiase 2000/08~(.$bTRDP79T0(W7A000800010001-8
No Foreign Dissem
military and s~~ace programs will continue
to have first call on available resources.
Soviet Relations With the United States off
IV. I want to touch on just two facets of Soviet
foreign policy--Soviet relations with the United
States, and the Sino-Sovict dispute.
V. On the question of relations with the United
States, the public stance of the Soviet leaders
at present is that it is difficult to make any
progress in resolving issues with a nation which
is attacking their Communist brethren in North
Vietnam.
A. This position is dictated to a degree by the
role which support of the North Vietnamese
has come to play in the Sino-Soviet dispute.
1. It is also, of course, a handy pretext
by which the Russians can require the
overtures to come from us.
G. In fact, however, there has been some progress
on issues not affecting Vietnam--for instance,
the recent civil air and space agreements, and
the indications that it may be possible to
agree on a nuclear non-proliferation treaty.
C. In private, Soviet leaders have used numerous
opportunities to emphasize that they want to
-54-
No Foreign Dissem
Approved For Release 2000/08tDP79T00827A000800010001-8
 Approved For Reuse 2000/089AW- RDP79T0 17A000800010001-8
No Foreign Dissem
avoid any showdown with Washington over the
Vietnamese issue.
D. The Kremlin leaders realize that if there is
going; to be any meaningful progress along the
lines of their national interests in such
matters as European security, arms control,
and East-West trade, sooner or later they are
going to have to resume the dialogue with the
United States.
No doubt IWw~ the Soviet leaders are
delighted to see the United States bogged
down in Southeast Asia, and bM +?IL_;G will
continue to give the North Vietnamese any
aid which involves no maior risk for the
Soviet Union.
F. They do not, however, wish a direct Soviet-U.S.
confrontation, and it is clear that they want
to keep their lines of communication with
Washington open and working.
The Sino-Soviet Dispute
VI. As for the Sino-Soviet dispute, the dominating
factor in Soviet foreign policy today is that
relations between Moscow and Peking have hit
rock bottom.
No Foreign Dissem
Approved For Release 2000/08/6EC3 K'RDP79T00827A000800010001-8'
 Approved For Rejasse 2000/0810FC JA' DP79T0Q$27A000800010001-8
No Foreign Dissem
A. The Chinese have done their best in recent
weeks to goad Moscow into making a full
diplomatic break.
1. In mid-February, Peking eased up a bit
on some of the harassing tactics,
but the Chinese had already demonstrated
that they had it in their power to force
every last Russian out of Peking---and
they can exert that power at a moment's
notice.
2. Each side would prefer not to take the
final step in breaking diplomatic
relations, but the Soviets probably have
the most to lose.
3. A complete break could greatly complicate
Moscow's problems in getting military aid
through China to North Vietnam.
4. Virtually all Russian arms aid has taken
this overland route, largely because of
Soviet reluctance to risk a confrontation
with the U. S. on the high seas.
B. If the Chinese can force the Soviets to break
relations, they can then charge that the Soviets
are to blame For any interruption in the delivery
of military aid to North Vietnam.
-56-
No Foreign Dissem
Approved For Release 2000/08M, , WiA-RDP79T00827A000800010001-
 Approved For Re4case 2000/08/07 : CIA-RDP79T0W27A000800010001-8
swimming pool into a water reservoir in
The USSR has already gone to great lengths
to maintain a presence in China,.
1. When the Soviet embassy in Peking was
placed under virtual siege, most of the
dependents were flown home, but the same
aircraft brought in tons of food, and
tough young guards to patrol the embassy
grounds. The Russians even turned their
Approved For ReIease _400c01O8tO71iiVAA-RJ719iTQ 7AQ0Q$QQQ1Q@Q1-8
1. China has already tried to exploit Soviet
unwillingness to use the alternate sea
route, charging the Russians with cowardice.
2. The Chinese probably believe that in a pinch
the Soviets would still refuse to ship by sea,
and thus would discredit themselves in Hanoi.
C. Moscow is preparing for the worst, carefully
documenting the record in an effort to blame
Peking if aid to Hanoi is disrupted.
1. An official Soviet statement on February 9
accused Peking of "preventing the solution
of concrete questions," and Moscow has pub-
lished charges that the Chinese are diverting,
sabotaging, or re-labeling Soviet war materiel
passing through China to North Vietnam.
2. Soviet propaganda media have blamed Chinese
intransigence for the resumption of U.S.
bombing on February 14.
 Approved For Rase 2000/08/07 : CIA-RDP79T0A,&27A000800010001-8
COMMUNIST CHINA
Introduction
the "cultural revolution" been 94qrt*-i
, I want to discuss
-of ''~~ frta
7S" tcm
in l a to S~~' --- - -mss
A. You have all seen pictures, I'm sure, of
swarms of Chinese teen-agers marching
through the streets or across the country-
side, holding little books from which they
chant quotations from Mao Tse-tung.
R. This is what is known as "Mao's thoughts."
In China today, they are credited with almost
miraculous power, although for the most part
they are a collection of tired old cliches
like "all power comes out of the barrel of a
gun," or "be resolute, fear no sacrifice, and
and surmount every difficulty to win victory."
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-
 Approved For Re'4se 2000Y0ICPFDP79T00U7A000800010001-8
C. Even the Russians, who have been known to quote
Marx and Lenin, find 'Tao's thought a bit silly.
Pravda cited the case of a Chinese who commented
that if a man didn't know how to climb a pole,
studying "Tao's thoughts would hardly help
him do it. The man was denounced and purged
because everybody in China knows that "a study
of Chairman Mao's work gives immediate results."
1. Chou En-lai's wife recently stated that
doctors successfully sewed back a ringer
which had been cut off because they had
studied Mao's thought.
2. A forestry conference in Pekin;,, concluded
that the study of Mao would enable the
forestry service to grow better trees.
3. Peking Radio says that fighter pilots
shouted quotations from 'Tao over the
intercom as they started a dog-fight, and
were therefore able to shoot down a
Chinese Nationalist aircraft.
4. And according to the Chinese Communist
news agency, a Lanchou worker who broke
an arm, a leg, and several ribs in a fall
refused sick leave,,because Mao's thought
enabled him to live with his pain.
II. To us, it sounds ridiculous, but for the Chinese it
is in deadly earnest. A street mob recently forced
-65-
Approved For Release 20005VRIEIFP79T00827A000800010001-
 Approved For Reuse 2000A .DP79TO 27A000800010001-8
the Chinese chief of state, Liu Shao-chi (Lyew
Shako-chee) to recite Mao quotations from memory,
and ridiculed him when he fluffed a line.
Chinese Political Developments
(CHART, CHICOM POLITICAL LEADERSHIP)
t- r enlatr^rr..`n 7 Gad
A. Mao, at 73, is aging, sick, and more and
more inflexible.
1. He is clearly concerned that his Com-
munist Party is losing the revolu-
tionary zeal of its early days, and
cannot be relied on to keep China on
the right track after he is gone.
2. The teen-aged millions of the Red Guard
are supposed to re-kindle that zeal
with their youthful and unbridled en-
thusiasm.
B. To Mao Tse-tung, the cultural revolution
is primarily a drive to re-shape
the Communist Party, or replace it with a
more reliable, more fanatical, and younger
version.
Approved For Release 2000SEUR 'r P79T00827A000800010001-
 Approved For ReWse 2000/0SW- B P79TOU27A000800010001-8
C. But for the men who aspire to succeed Mao,
it has become a naked struggle for power
and for survival.
II. It is difficult to determine from day to day
where the cultural revolution stands, who is
on which side, or who is going to come out on top.
A. The prime mover for several months was
Defense Minister Lin Piao (Lin Beeow),
Mao's designated successor.
1. As soon as Lin was proclaimed Mao's
heir-apparent last August, he began
driving to unseat any potential rivals.
2. His immediate targets were the two men
who have been at the top of the party
machinery, Chief of State Liu Shao-chi
(Lyew Shaho-chee) and the general secretary,
Teng Ilsiao-ping (Dung Sheeow-ping).
tregarraetmcnT-
B. Subsequent developments, however, suggest that
Liu may have lost the initiative to Premier
Chou En-lai (Joe Un-lie).
1. Lin hasn't made a major public speech since
early November, and dropped from public view
in late November.
-67-
Approved For Release 2000/( 1f CJMP79TOO827AO00800010001-8
 Approved For R ease 20005 DC.RI WDP79T0 27A000800010001-8
3. Lin has been in chronic poor health for years,
and this may have contributed to his apparent
political decline.
C. Chou En-lai, on the other hand, has been the
dominant figure in Peking in recent weeks.
1. He has been issuing directives on how to
conduct the "cultural revolution," and has
even been ordering Lin's troops around to
settle disputes between Red Guards and local
authorities.
III. Early in January, the leadership struggle entered
a critical phase.
A. Evidence began appearing that the army was
less than monolithic in its loyalty to Mao
and Lin.
1. On January 11, for instance, the cultural
revolution group which was supposed to be
purging the military leadership was itself
purged, and was replaced by a new and
presumably trustworthy group of 18 men.
Within a week, however, two or three members
of this new group were themselves under
attack on ideological grounds.
B. At about the same time, several military commanders
in crucial positions were denounced for having
Approved For Release 2000/0$/, j79TOO827AOOO8OOO1 0001-8
 Approved For Ruse 2000/4EC"TP79TOO? 7A000800010001-8
plotted a coup. They included the commander and
the political commissar of the Peking garrison,
the commander of armored forces, a member of the
party's powerful "lilitary Affairs Committee, and
a number of key commanders in the provinces.
C. A number of top regional party officials were
accused of having joined in the plot. The most
important was Tao Chu (Taho joo) who was both the
party boss of the Central-South region, in Canton,
and number four man for a while in the inner circle
of Peking leaders. Tao was very active in Peking
right up to the time of his downfall at the end
of December.
1). We don't know the full story, but we suspect that
'lao and Lin may in fact have had a very close shave
in December or January.
E. The opposition aligned against then was a formidable
group, and it did not give up without a struggle.
1. For several weeks after the turn of the year,
there were disorders throughout China, as Tao's
opponents incited strikes and riots, and managed
to disrupt transportation and production.
F. It is now evident, however, that the opposition
has been largely suppressed. Many of its leaders
have been arrested, or are in hiding, and Peking
is working out an accommodation with several
provincial leaders.
Approved For Release 2000/0 dDl- 79T00827A000800010001-8
 Approved For Ruse 2000'f0&':` g-ZDP79T0 27A000800010001-8
2. 'lost of the incidents now involve clashes
between groups of unruly Red Cuards.
3. The army has been ordered to bring these
groups under control, and some of the more
militant Red Cuard organizations are being
disbanded.
00,00
IV. This return to a mo e orderly situation indicates that
most key military corn anders remained loyal to the
present political lead s in Peking.
A. The course of develo, ents indicates, however,
that their loyalty was secured only after Peking
shifted to more moderat tactics in the power
struggle.
1. It is also significant' that in January,
before the army took an 'ffective role, the
major responsibility for 'nning the cultural
revolution shifted to Chou, who is not only
a competent compromiser, but ore flexible
and more reasonable than eithe `tao or Lin.
B. The steam does seem to be going out the cul-
tural revolution. Its excesses .:ould b attributed
to a considerable degree to the volatil and unruly
youngsters who made up the Red Cuard.
-70-
Approved For Release 2000/Wr 79T00827A000800010001-8
 Approved For Re%dse 2000/OVfiFG "?P79T00@f 7A000800010001-8
1. Now a February 19 directive of the Central
Committee has ordered the secondary schools
reopened on March first. What's more, the
schools have been told to concentrate on the
academics and not spend too much time studying
".1ao's writings when they do reopen.
ion is in order a ouf--t ie ay-
orting of the recent turmoil from Tok , from
Hong ong, and from the handful of f eign
corresp dents in China, who are irtually
confined Peking itself:
1. The Chin e Communists do a great deal of
their talk' , in me phor and hyperbole.
Some of the re or s of pitched battles may
have arisen fr he use of military language
to describe ti at wa essentially a street brawl
between opp sing polit'cal factions.
2. Much of e reporting ha relied on wall
posters Premier Chou Fn-1 ''s latest speeches
have escribed them as irres nsible.
3. A g eat deal of this reporting an neither
b confirmed nor refuted by the h d intelligence
V. There is little doubt that many officials
have fallen victim to the purge. -' "
Approved For Release 2000/0 79TOO827A000800010001-8
C
 Approved For Rehdse 2000/OFPE(QIRTP79T0(,27A000800010001-8
B. Mao's victory has been won at great cost--if
it has been won. The party apparatus is all but
shattered, and the purge has left a legacy of
mistrust and bitterness among the surviving
leaders, D
C. \f Chou En- i manages to con lidate his sition,
d emerges a the dominant fi re, the tren of
of contro
Chou ha',.al eady ac 'eved a consider le degree
will `xobab con.inue. It is con eivable tha
rec`nt weeks to and moderation a d reasonable ess
more
re is little hard evidence
ultimate control to the
ments.
"1ao remains the leader of Chinese
nism, he can be expected at any time
renew his attempt to reshape society along
radical lines.
This would certainly renew the turmoil and
the infighting among top leaders.
11e long-range effect of the cultural revolution
remains up in the air, but there are two points which
we can make:
First, until 'lao goes and a new leader has firmly
consolidated his succession, China's leaders
will be divided and in conflict. They will find
-72-
Approved For Release 2000/0E4P79T00827A000800010001- ~9
 Approved For Rase 2000,W 44DP79TOW17A000800010001-8
it difficult to agree on any new Policy lines,
so we do not expect any radical departure from
existing policies.
Second, whoever wins, we can see no reason to expect
any dilution of Peking's implacable hostility
toward the United States.
For some time to come, however, the Chinese Communists
will probably suffer from a cultural revolution
hangover that could limit their capacity to engage
in foreign adventures.
--73-
Approved For Release 2000/0SE(1IP79T00827A000800010001-8
 Approved For Rase 2000/08/07: CIA-RDP79TOW27A000800010001-8
Chinese Milcmtary
I. When the Sino-Soviet split began in 1960, the
Chinese Communist military establishment amounted
to a sub-standard, World War II army, a large but
inferior air force, and a navy consisting largely
of submarines that didn't venture outside coastal
waters.
II. The withdrawal of Soviet help brought improvement of
the Chinese forces to ax complete halt.
A. Over the past two years, however, the Chinese
have regained momentum, and this time they are
doing it entirely on their own as far as we can
see, with no help from the Soviets.
B. The dominant fact, of course, is that Communist
China has achieved nuclear status.
C. At present, their nuclear weapons, along with
existing or imminent delivery systems, are crude
and limited by our standards, but by Far Eastern
standards they make a great contribution to
Chinese Communist military prestige.
III. Analysis of the five nuclear tests to date suggests
that the Chinese can probably already package a
nuclear device# for delivery by their handful of
aging medium bombers.
A. They may be working on one that could be delivered
by some 250 light jet bombers they have in their
inventory.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For Ruse 2000/08/07 : CIA-RDP79T0Q$27A000800010001-
(MAP, CIIICOM MISSILE NKNNW COVERAGE OF ASIA)
B. More important than an air-dropped weapon, however,
is the fact that they probably fired one of their
tests on a surface-to-surface missile.
begin deploying
C. We believe that the Chinese can probably @op&ogr
a medium-range missile with a nuclear warhead
this year. This map shows the area that could
be covered from Chinese Communist launchers with
a 1,000-mile missile.
1. The implications for the Far East, Southeast Asia,
and South Asia are obvious.
D. We also think they might be able to 1esmakdeploy
their first crude ICBMs in the early 1970's.
1. It is not beyond the range of possibility
that they could put a small satellite into
orbit some time late this year.
E. Chinese factories are also beginning to turn out
supplement
advanced fighter aircraft, to xop.?ame their aging
and obsolescent MIG 15s and MIG 17s. We would
not be surprised to find that they will soon begin
making a copy of the Soviet BADGER jet medium
bomber.
F. They have assembled one copy of a. Soviet ballistic
missile submarine, although they probably don't
have a missile fm system for it yet. Add they
are apparently making PT boats that carry guided
missiles.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8 -,
A-
 Approved For Reuse 2000/08/07 : CIA-RDP79T09&27A000800010001-8
IV. In other words, they are again making; progress in
upgrading their weapons, but it is being done on a
small scale, and with over-riding priorities which
mean that other technological progress and the
economy generally suffer as a result.
V. As for conventional military forces, the army amounts
to about 2,300,000 men, with more than 100 infantry
and a dozen armored or artllery divisions.
A. The Chinese Army has the capability to overrun
any of its mainland neighbors, provided it
does not encpunter significatt opposition
from a mMqtdiipam= major power.
1. It is short of armor, heavy ordnance,
n hanized trabsport, and fuel.
B. The air force and the navy have primarily
defensive missions.
C. The navy has the world's fourth largest
submarine fleet, but it has no experience
in sea-going operations.
V. There has been a lot of belligerent talk from
the Chinese over Vietnam, but we think there are
probably only three circumstances in which the
Chinese would feel obliged to intervene there with
military force:
A. U.S. air strikes against Chinese targets.
B. A major U.S. invasion of North Vietnam; or
C. Threat of imminent collapse of N.Vietnamese govt.
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 Approved For ReJgase 2000/08/07 : CIA-RDP79T0QA27A000800010001-8
VIETNAM
Introduction
I. For,Vietnam, the year 1966 was primarily the year
in which allied forces:
--took the initiative for open combat away from
the Communists in the South;
--developed a sustained and increasing aerial
bombardment of military targets in the North; and
--made a start down the road toward stable demo-
cratic government in Saigon.
A. Allied field tactics in the South have
featured massive search-and-destroy or
"spoiling" operations--designed to force
enemy concentrations into extended combat,
inflict heavy casualties, and prevent enemy
offensives.
1. Late in the year, these tactics were being
carried into enemy strongholds where allied
forces had not penetrated in strength since
the war began.
2. The Communists are putting renewed emphasis
on classical guerrilla tactics, in an effort
Approved For Release 2000/08/07 : CIA-RDP79T00827A000800010001-8
 r,an~r
to maintain rlor)ell i.um without risl:insl. IS
Approved For Release 2000/08/07 : CIA-RDP79TO0827A0Q0$0Q010001-8
large-scale clashes in V'hic1L All ie(a ; crew Can
bring superior rol>i.lity and Iirepok,ur to bear.
L. Nevertheless, at the end of the Year the Communists
had a larger main combat force in the South than
ever before; infiltration continued; and Hanoi's
determination to persist in the war appeared to
be undiminished.
TILE WAR IN SOUTH VIIiTNA"1
1. In the bitter fighting in South Vietnam last year, the
Viet Cong and regular units of the North Vietnamese
Army lost nearly 56,000 killed in action. A record
20,000 defectors responded to the government's psycho-
logical warfare program--about twice as many as in 1965--
and the bulk of these defectors had been Communist
military personnel.
A. But measuring a war by statistics immediately becomes
a paradox. Tn the course of the same year, our
figures on total Communist combat stren