NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A031000080002-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 16, 2016
• Document Release Date: October 7, 2004
• Sequence Number: 2
• Publication Date: January 16, 1979
• Content Type: REPORT

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entra
Intelligence
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DIA and DOS review(s)
completed.
National Intelligence Daily
(Cable)
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Top Secret
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National Intelligence Daily (Cable)
Contents
Briefs and Comments
Spain: Counterterrorism . . . . . . . . . . . 6
Yugoslavia: Tito to Visit Kuwait . . . . . . . 7
Iraq-Syria: Reopening of Pipeline . . . . . . 8
Angola: Airfield Capture . . . . . . . . . . . 8
Special Analysis
China's Search for Industrial Technology . . . 9
Overnight Reports . . . . . . . . . . . . . . . . . 12
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More violence erupted in Spain's troubled Basque
region last weekend amid signs of renewed vigilante
activity by extreme rightists. The military is unlikely
I;o become directly involved, however, unless terrorists
Follow up on threats to assassinate additional senior
25X1 ttrmy officers.
The Basque terrorist organization, ETA, is likely
to retaliate quickly and harshly for the near-fatal at-
tack on one of its alleged leaders in southern France
on Saturday. Two far-right groups in Spain have claimed
responsibility for the shooting; members of the para-
military Civil Guard, however, are widely believed to
form the core of such rightist groups and the ETA will
probably seek revenge by killing prominent police offi-
25X1 cials.
Last month, another ETA leader was killed by a
bomb in southern France. The attacks on the two ETA
leaders seem likely to signal a resurgence of far-right
terrorist groups in the Basque region.
ETA could also retaliate by pursuing its avowed
intention of killing senior military officers. The
Spanish military is already incensed by the assassina-
tions earlier this month of two army officers, which
resulted in public protests by the military. Further
attacks on army officers could unleash emotional forces
25X1 difficult to control.
Key military commanders still appear committed to
staying within the bound of the constitution, and they
do not relish the prospect of becoming directly involved
in the Basque situation through the imposition of mar-
tial law. At the very least, however, they would be
25X1 likely to exert intense pressure on the government to
crack down hard on the Basques by usin the extraordi-
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nary police powers granted last year.
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YUGOSLAVIA: Tito to Visit Kuwait
According to a Kuwaiti Government announcement,
Yugoslav President Tito will visit Kuwait from 3 to 6
February. The Kuwaiti press is speculating that Tito
may go on to Iraq and Syria in an effort to narrow those
two countries' differences with President Sadat over the
Camp David accords. Tito may speak favorably about the
accords in private but is unlikely to press leaders in
Baghdad and Damascus to drop their opposition to an
Egyptian-Israeli treaty.
Tito continues to oppose Israel's stand on most of
the unresolved issues, but distrusts Sadat's go-it-alone
strategy. He does, nevertheless, place a high priority
on recreating an aura of unity between Arab members of
the nonaligned movement. Yugoslavia is also interested
in maintaining improved relations with the US, and this
probably accounts for its uncharacteristically construc-
tive approach in not condemning the Camp David agreement.
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IRAQ-SYRIA: Reopening of Pipeline
//The Iraqi Petroleum Corporation pipeline, which
runs from Iraq through Syria to the Mediterranean, is
scheduled to begin operating by the end of January. The
opening of the pipeline--which has been closed for nearly
three years because of strained political relations as
well as disagreement over the price of the oil and
transit fees--is symbolic of growing rapprochement be-
tween Iraq and Syria. The us defense attache in Damas-
cus believes that the pipeline is now ready to use after
recent repairs. No prices or fees have been announced;
in the last full year of operation, Syria realized around
$130 million in transit fees.//
ANGOLA: Airfield Capture
//Angolan Government and Cuban forces have captured
M'Pupa airfield, where foreign-supplied military equip-
ment and supplies destined for Jonas Savimbi's National
Union for the Total Independence of Angola have arrived
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ment objective, apparently was taken during an offensive
25X1 last month
T e loss of M'Pupa will disrupt UNITA's
ogas is ne work, but it will not seriously
effective guerrilla campaign.
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SPECIAL ANALYSIS
China's Search for Industrial Technology
China's post-Mao Leadership has Launched an ambi-
tious program to acquire Western machinery and technology
to help modernize the country's backward industrial base.
The effort, covering the entire industrial spectrum,
potentially could cost more than $40 billion in foreign
exchange by 1985. The Leadership is only beginning to
recognize the difficulties that will eventually force
China to slow the pace of the program and probably ex-
tend the 1985 goals into the 1990s.
//Vice Premier Deng Xiaoping (Teng Hsiao-ping) has
been the driving force behind the program to bring the
economy up to "front-line status" by the end of the
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century. Since October 1976, China has contracted for 25X1
whole plants and technology valued well in excess of $7
billion, more than twice the value of all such contracts
sinned between 1972 and 1975.
China has eased a number of restrictive policies
in its efforts to spur acquisition of technology and to
create an environment encouraging the absorption of new
techniques into industry. Perhaps the foremost policy
turnaround is the new willingness to send thousands of
students to the West to study. In addition, more than
2,000 Chinese technicians and specialists have visited
Western factories over the last two years, shopping for
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the latest in industrial technologies. China has also
encouraged visits by Western businessmen who are flock-
ing in to promote their products and services.
China also has moved to reconcile its internal
policies with international business and financial
practices. In a major concession to Western business-
men concerned about patent infringements, China is lay-
ing the ground work to recognize the International
Patent Protection Agreement. The Chinese have also
been compelled, by the massive foreign exchange require-
ments of their program, to consider a variety of schemes
they would not permit before, including joint ventures,
barter and product payback deals, long-term credits, and
even government-to-government loans.
Western money markets are well disposed to extend
the $15 to $20 billion in credits that China would re-
quire over the next several years to finance a $40
billion capital import program. China has already ob-
tained commitments for nearly half that amount,.
A combination of technical, political, and finan-
cial constraints will preclude full attainment of the
modernization goals on schedule. The sheer size and
speed of the effort is the primary constraint. China
does not have the skilled manpower or management resources
to coordinate the purchase, construction, and operation
of the large number of prj2_~l is it plans to complete
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The standdown of higher education in China between
1966 and 1976 left a 10-year gap in the supply of en-
gineers and scientists. Past import programs often met
with technological, supply, transportation, personnel,
or other problems that limited the impact of imported
plants and equipment. Similar problems will hamper this
25X1 much more ambitious program.
The reluctance of many cadres and workers fully to
embrace the leadership's program could become a criti-
cal constraint. Past policy shifts--in particular the
Great Leap Forward (1958-60) and the Cultural Revolu-
tion (1966-69)--had drastic economic and political re-
percussion; many middle-level industrial officials
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and Communist Party members, fearing another dramatic
shift in priorities, are wary of taking initiatives that
may backfire in a few years. Further, as foreign-trained
technicians and students enter the work force, their dif-
ferences in outlook from less-educated workers and cadres
who gained their positions during the Cultural Revolu-
tion could spark disruptive clashes. 25X1
As problems multiply, China's leaders will reduce
the speed and the scope of the program, resulting in a
stretch-out of 1985 targets into the 1990s. Even so,
the achievement of even a fraction of the goals would
add significantly to China's drive to become a major
industrial power.
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(The items in the Overnight Reports section have not
been coordinated within the intelligence community.
They are prepared overnight by the Office of Current
Operations with analyst comment where possible from
25X1 the production offices of NFAC.)
//The US Embassy in London concludes that the
Callaghan government is not likely to fall today follow-
ing the debate on economic policy in the House of Com-
mons. It is not certain whether the opposition Con-
servative leadership will push for a vote of confidence.
The Tories might have support from the Liberals, but
members of Parliament representing Northern Ireland and
the Scottish and Welsh nationalist parties are likely to
side with the government. The Embassy believes the
Tories may decide to allow the government more time to
try to resolve the issues posed by strikers in the hope
that it will embarrass itself in the process. Meanwhile,
today's one-day national rail strike--threatened to be
resumed on Thursday--will further disrupt long-distance
freight transport already seriously hampered by the
25X1 truck drivers' strike.//
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