EAST ASIA

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Document Number (FOIA) /ESDN (CREST): 
CIA-RDP79T00865A002200060002-1
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RIPPUB
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T
Document Page Count: 
18
Document Creation Date: 
December 12, 2016
Document Release Date: 
July 13, 2001
Sequence Number: 
2
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Publication Date: 
November 18, 1975
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NOTES
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Approved For Release 2001/08/08 : CIA-RDP79T00865A002200060 2-1 op Secret NOFORN rrLEE JED1TE East Asia Top Secret November 18, 1975 SC No. 00543/75 Approved For Release 2001/08/08 : CIA-RDP79T00865A002200060002-1 Approved For Release 2001/08/08 : CIA-RDP79T00865AO02200060002-1 Warning Notice Sensitive Intelligence Sources and Methods Involved (WNINTEL) NATIONAL SECURITY INFORMATION Unauthorized Disclosure Subject to Criminal Sanctions DISSEMINATION CONTROL ABBREVIATIONS NOFORN- Not Releasable to Foreign Nationals NOCONTRACT- Not Releasable to Contractors or Contractor/Consultants PROPIN- Caution-Proprietary Information Involved USIBONLY- USIB Departments Only ORCON- Dissemination and Extraction of Information Controlled by Originator REL... - This Information has been Authorized for Release to ... Cleaslfled by 010725 Exempt from general declassification schedule of E.O. 11652, exemption category: 458(1), (2), and (3) Automatically declassified on: Date impossible to Determine Approved For Release 2001/08/08 : CIA-RDP79T00865AO02200060002-1 Approved For ReleasTE)P/ IU ATR RAA002200060002-1 NOCONTRACT/ORCON This publication is prepared for regional specialists in the Washington com- munity by the East Asia - Pacific Division, Office of Current Intelligence, with occasional contributions from other offices within the Directorate of Intelligence. Comments and queries are welcome. They should be directed to the authors of the individual articles. November 18, 1975 Tokyo and Pyongyang: A Gradual Shift . . . . . . . . . . . . . . . South Korea: Closeup on Energy . . . . . . . . . . . . . . . . . . 10 Approved For ReleaseI2 l0> I RI DI i &6,-002200060002-1 Approved For Rele'f-e fb0SM1MIU-E MJV*65A002200060002-1 Tokyo and Pyongyang; A Gradual Shift Relations between Japan and North Korea have undergone gradual but important changes since 1971. Over the past four years, a private, official dip- lomatic channel has been established; political and semi-official contacts have increased; and trade and travel between the two countries have grown markedly. At this point, formal relations could be established quickly. Pyongyang would be willing, 7 but Tokyo has no compelling reason to move this far at this stage. Indeed, relations between the two countries are not likely to improve at the same pace as the past four years without further forward move- ment in the overall pattern of detente. Tokyo is unlikely to allow events to move in any inexorable upward trend that could result in formal relations with Pyongyang prematurely. Even so, interaction between Tokyo and Pyongyang, based on the level of contacts already established, could be an important factor in North-South developments on the Korean Peninsula. Changing Perceptions The mutual desire of both countries to improve ties flowed from the emergence of detente in Asia in 1971. At the outset, Pyongyang--perhaps because of prior discussions with Peking--moved more rapidly and vigorously than Tokyo in pursuit of its inter- ests in the new climate. In 1971-72, North Korea turned to the non-communist world as a major source of technology and capital goods, opened a dialogue with South Korea, and undertook a major drive for diplomatic support among both Western and nonaligned states. Japan figured importantly in the North's plans--as an economic power, a key political sup- porter of Seoul, and an important element in the power equation arrayed against Pyongyang. North November 18, 1975 Approved For Rele P0~f > A-tp 65A002200060002-1 Approved For Re1ea'FCV0164MR.-F65A002200060002-1 Korea hoped at the outset to move as far and as fast with Japan as possible in order to strain Tokyo's ties with both Seoul and Washington. Japan, on the other hand, surprised by the Sino-American under- standing of 1971, entered the new era uncertainly with no precise plan in mind. Indeed, Tokyo initially could do little more than feel its way until the pace and scope of detente became more clear. With respect to North Korea, Tokyo exercised special caution be- cause of Japan's basic interest in stability on the Korean Peninsula and its security relationship with the US. Opening Moves Pyongyang made its first significant gesture in 1971, two months after the surprise announcement of President Nixon's pending visit to China and a month after the opening of Red Cross talks had in- t:-oduced the climate of detente to Northeast Asia. In an interview with the Asahi Shimbun on September (i 27, Kim Il-song called for an expansion of techni- cal, economic, cultural and press exchanges with Japan, expressed interest in visits by members of the ruling Liberal Democratic Party (LDP), and talked of turning to Tokyo as a major source of in- dustrial imports. Throughout late 1971 and early 1972, the North Korean president used interviews with visiting Japanese to raise the possibility of establishing relations. Tokyo officials were more cautious at this juncture. Surprised by the Sino-American announce- ment, their immediate concerns were directed more at Peking than Pyongyang. Tokyo did, however, an- nounce a phased liberalization of restrictions on travel to and from Pyongyang, while denying requests for Export-Import Bank financing of whole plant ex- ports to the North. November 18, 1975 Approved For Relea-ea0P1/~A / BR ItR"YA8A5A002200060002-1 Approved For ReleTsQ-Voo$ 0 ]F&-Ik T EQ$65A002200060002-1 In January 1972, a suprapartisan delegation of Japanese legislators visited Pyongyang and signed an agreement urging: --the expansion of bilateral trade to $500 million by 1976; --Japanese acceptance of deferred pay- ment terms; --technological cooperation; --the exchange of official trade offices. The delegation probably hoped that the agreement would develop along the lines of the Liao'-Takasaki agreement negotiated ten years earlier. That agree- ment--covering Sino-Japanese trade--led to the es- tablishment of semi-official Memorandum Trade Offi- ces in Tokyo and Peking, and served as a channel for a phased buildup of political relations. Since 1972, however, both Japan and North Korea have agreed that such trade offices are unnecessary. Pyongyang has never demanded--as Peking did--that trade be restricted to designated friendly firms. Tokyo for its part, later opted for a more official, direct channel of communication. July 1972 Watershed Tokyo's major response to detente--improving relations with all Asian Communist states---came with the installation of the Tanaka government in July 1972. Within days, Japanese diplomats in Mos- cow privately established official contact with their North Korean counterparts. Contacts were elevated to the level of embassy minister by December of that year and have continued, albeit sporadically, ever since. North Korean officials visiting Tokyo in q_1 October 1972 and again in October 1974 also held pri- vate talks with Japanese officials, but the Moscow November 18, 1975 Approved For Rele'i-QfbCISNl A-$tj R,B65A002200060002-1 Approved For Rele00e8ffME14-IVM65A002200060002-1 channel remains the only known venue for consistent private exchanges. North Korean public commentary on Tanaka was innediately favorable. In July 1972, Kim Il--now premier--delivered a forthright speech that sig- naled a new positive official attitude toward Tokyo. North Korean propaganda portraying Japan as a mili- tary threat was drastically reduced, and it was prob- ably about this time that Pyongyang withdrew anti- Japanese themes from its school curriculum. Both governments also facilitated a considerable increase in travel and trade, which on Tokyo's part included the use of Export-Import Bank credits be- ginning in October 1973. From a modest total of $58 million in 1970, Tokyo and Pyongyang increased the annual trade volume to $150 million in 1973, and to $368 million in 1974. Meanwhile, yearly visi- tors moving in both directions increased from 43 in 1970 to more than 1,400 last year. The Past Year: Changes in Atmosphere In the final months of the Tanaka government last year, Tokyo's deteriorating relations with Seoul began to complicate the process of increasing ties with the North. Tensions between Japan and South Korea had begun to build in 1973 with the abduction of Kim Tae-chung from Tokyo by the ROK CIA, and in- creased markedly a year later when a Korean resi- dent of Japan assassinated Madame Pak Chong-hui in Seoul. Despite these problems, Japanese Foreign Minister Toshio Kimura persisted in calling for bet- ter relations with the North--thereby exacerbating frictions in the Japanese - South Korean relationship. Political forces favoring the shoring up of re- lations with Seoul finally became ascendant in Tokyo when Miki replaced Tanaka as prime minister in Decem- ber. At that time, party Vice President Shiina forced Miki to replace Kimura with Kiichi Miyazawa, November 18, 1975 Approved For Release ~0,Q1/p f~$R " 8A5A002200060002-1 Approved For ReleasseP20~ 0 ir~A-RDP79T00865A002200060002-1 who quickly adopted a more sympathetic attitude to- ward Seoul. Developments in 1975 have generally fa- vored Tokyo's relations with Seoul over Pyongyang: --in the spring, Tokyo canceled Export- Import Bank credits for trade with Pyongyang as a result of North Ko- rean defaults on prior obligations; --later in the spring, communist vic- tories in Indochina generated concern in Tokyo about stability on the Ko- rean Peninsula. As a result, Prime Minister Miki during his August visit to Washington reiterated the essential linkage of Japanese and South Korean security, and--probably more damaging in Pyongyang's view--reaffirmed the need for US troops to remain in South Korea; --in September, the Japanese participated in a long-postponed ministerial con- ference with South Korea, agreed to continue economic assistance, and thereby "normalized" relations with Seoul. Tokyo also agreed to co- sponsor and lobby for the US-ROK resolution in the UN. With Japan - South Korean relations on the mend, Tokyo did feel somewhat more free to make some com- pensating gestures toward Pyongyang. In July, Tokuma Utsonomiya, an LDP Dietman who has long been known for his pro - North Korean sympathies and is a con- fidant of Prime Minister Miki, held another of his well-publicized conversations with Kim Il-song. Shortly thereafter, the first all-LDP Diet delegation visited Pyongyang. And in early September, Tokyo further liberalized restrictions on the travels of officials from Chosen Soren (the pro-Pyongyang federa- tion of Korean residents in Japan) to North Korea for political purposes. November 18, 1975 Approved For Relea (2&lfbEG69P,(BPT-R M A002200060002-1 Approved For Relel-Q]~0( i'/AECTIA-VM 865A002200060002-1 Also in early September, when North Korean forces killed two Japanese fishermen on the Shosei Maru near North Korean territorial waters, the over- whelming reaction in Tokyo was to stress the need for better communications with Pyongyang in order to prevent this sort of accident in the future. North Korean propaganda was surprisingly harsh on Miki at the outset of his administration. It has since leveled off somewhat, but still criticizes Miki and Miyazawa by name and contains little of the opti- mism about relations that characterized Pyongyang's commentary during the early Tanaka period. In Oc- tober, presumably annoyed by Japanese efforts to strengthen ties with Seoul and by Tokyo's reaffirma- tion of the need for US troops in South Korea, Kim Il-song made an unusual attack on the US-Japan Mutual Security Treaty. Pyongyang: At a minimum, Kim's criticism of the mutual Security Treaty reflects his mixed feelings about the policy of pursuing better relations with Japan. Having long viewed Japan's security ties with the US as a major stumbling block to his ambition of reunifying the peninsula, Kim must find it galling that, after four years of detente and North Korean efforts to improve bilateral ties, Tokyo has once more reaffirmed the need for US troops in South Korea. Kim is probably also disturbed by the fact that Seoul and Tokyo were able to dissipate the fric- tions that threatened their relations last year. Kim may be tempted to resort to a harder line against Japan, try to manipulate the Japanese fear of becoming embroiled in another Korean war, and hope to force Tokyo to abandon its military alliance with the US. But Kim is also aware that he--and Peking--unsuccessfully pursued this line for over twenty years, and he cannot be optimistic about his November 18, 1975 Approved For Releals 901J 6 -F [ 131ROA65A002200060002-1 Approved For Rele 09 MR IA-IPRYMQ465A002200060002-1 own chances at this juncture. Indeed, it would be difficult to adopt a "cold war" attitude toward Japan without seriously complicating his overall posture of detente. It is far more likely that Kim will continue to walk a fine line between wooing and pressuring Tokyo. The psychological advantage, vis-a-vis the South, of the modest political advances already reg- istered in Japanese - North,Korean contacts is of considerable value to Pyongyang. In economic terms, Japan has now surpassed the USSR as the leading ex- porter to North Korea. Kim has also openly expressed his interest in cultivating ties with conservative leaders of the LDP, is apparently willing to deal with any prime minister, and has set no pre-conditions for the normalization of relations. Despite Japan's concern to maintain South Korean security, he would apparently welcome the immediate establishment of relations. Hence Pyongyang is likely to encourage as much additional forward movement as possible with- out exerting hostile pressures that could alienate Tokyo. Tokyo: The consensus within the ruling liberal Democratic Party favoring contacts and a dialogue with the North has now been broadened to include the conservative wing. Many conservatives were upset by the improvement of ties with Pyongyang at the expense of Seoul during 1973 and 1974. Now that relations with Seoul have been restored to an even keel, how- ever, conservative interests have been served. Re- cent calls for further dialogue with the North in the wake of the "Shosei Maru" incident have come from such impeccable conservative voices as Shintaro Abe--the minister of agriculture who is a protege of Takeo Fukuda and former prime minister Kishi--and the respected financial daily, the Nihon Keizai Shimbun. Tokyo has two basic interests in ties with the North: --the need for flexibility in adjusting rapidly to any new developments on the November 18, 1975 Approved For Relear(3V1Nq+Rp~,7,~,~(R1 5A002200060002-1 Approved For Rele'F-QDCB]bG$MA-tM-Blb&65A002200060002-1 peninsula, especially a major change in US policy. Tokyo has a lingering concern that Washington, as it did in its move toward Peking in 1971, will change its posture toward the North-- or withdraw from the South--without giving Japan sufficient prior notice; --an ability to influence developments on the peninsula through contacts with both Korean adversaries. Tokyo also hopes to increase stability there by fostering a dialogue between North and South. Ci) It seems reasonably clear at this point that Japan's desire for flexibility has been achieved, given the level of contacts already established and Pyongyang's willingness to move ahead at any time. For its part, Japan sees little reason for recogni- tion of Pyongyang in the near future and probably has no specific timetable in mind for such a move. Foreign Ministry officials do not now envisage a phased escalation of official dealings as occurred in the evolution of Sino-Japanese relations. Tokyo's second interest--gaining more influence on the peninsula and helping foster a North-South dialogue--will probably become more of an operative factor in Japan's future dealings with the North. But pursuing this interest will not be easy. Theo- retically, Japan could modulate its policies toward the North in response to variations in Kim's poli- cies. The principle of extending Export-Import Bank credits to the North on a "case by case" basis --likely to be resumed by Japan at some future point --would afford Tokyo some real leverage in this re- spect and over time might serve to increase Pyong- yang's stake in more moderate policies. On the other hand, unwillingness or inability in Tokyo to "penal- ize" Pyongyang during a period in which the North had visibly heightened tension on the peninsula might November 18, 1975 Approved For Relent J90 / / A- t ( 65A002200060002-1 -a- X Approved For Re 1NpQII>3'pI1 RrA 865A002200060002-1 contribute to a more uncompromising attitude on the part of Kim. Another potential pitfall is the pos- sibility that Tokyo's own energetic search for dia- logue on the peninsula might result in premature sup- port for a new attractively packaged peace proposal by Pyongyang. To have any real chance of success, it seems clear that Tokyo will need to keep in close touch with Seoul as well, continuing to provide the South with essential economic and political support. (SE- CRET NOFORN/NOCONTRACT/ORCON) November 18, 1975 " ft-TMUPO 65A002200060002-1 Approved For Relea ff U W& Approved For Re1e"f01 / Ph R7 OA65A002200060002-1 South Korea: Closeup on Energy An extended period of rapid growth in GNP and energy consumption has made South Korea the third largest oil importer among LDCs. Only India and Brazil outrank it. Given South Korea's meager energy resources, oil imports will continue to be closely linked to economic growth. During the past decade, South Korea has emerged as a major oil consumer and importer. While total energy consumption rose 8 percent annually from 1967-74, oil usage increased three time-s as fast. Oil consumption, which currently averages 300,000 barrels per day, represents half of total energy use. Industry is the main user, accounting for about 50 percent of total oil con- sumption. The transport and household sectors take most of the remainder. Growth in oil consumption slowed to 3 percent last year, largely because of an industrial slump. In 1975, tough government conservation measures are helping to hold growth in oil use under 10 percent in the face of a 12 percent jump in industrial output; oil consumption normally would rise faster than industrial output. Commercial consumption appears to be rebounding after last year's slump, while unusually dry weather has required a sharp rise in the use of fuel oil by the electric power industry. Over the longer term, Seoul expects oil consumption to increase rapidly. According to government estimates, requirements will reach about 850,000 barrels per day in 1981, nearly triple the current level. The pattern of consumption is not expected to change much; the industrial November 18, 1975 Approved For ReI pOffi $1Q$ ECIA-E2RP7PIOQ865A002200060002-1 CRT' Approved For Releafc1F0 IEiJ-F 4 ff&&5A002200060002-1 share will be buoyed by the large requirements of several major petrochemical plants now under con- sideration. Plans now call for oil to supply nearly 60 percent of total energy needs by the early 1980s. Since all oil requirements are met from abroad, import patterns have closely followed consumption trends. In 1974 and earlier this year, however, oil imports increased somewhat faster than con- sumption because of government efforts to increase stocks. In addition to normal commercial inventories, Seoul wants to increase energy stocks to a 45-day supply. At the time of the 1973 oil embargo, South Korea was caught with little more than a 20-day stockpile. Saudi Arabia supplies 60 percent of crude imports, with Kuwait and Iran supplying the remainder. Small amounts of products are purchased abroad, chiefly from Japan. South Korean hopes to reduce dependence on imported oil by developing offshore fields in the Yellow and East China Seas have been damped by con- flicting territorial claims. Only a few wells have been drilled so far on the East China Sea continental shelf, which is claimed in part by the Japanese. Chinese claims have interfered with work in the Yellow Sea. Although of declining importance in recent years, coal remains a major energy source. South Korea has nearly 1.5 billion tons of poor-quality anthracite deposits, about one third of which is recoverable with present technology. Primed with new government subsidies and investment loans, coal production increased a total of 22 percent: in 1973- 74, to 15.3 million tons, after three years of stag- nating output. Additional government aid is expected to boost coal production by a million tons annually through 1981. To preserve the 30 percent share of coal in total energy supply, imports also will be increased substantially. Imports are expected to November 18, 1975 Approved For Reltpol20 6