DEVELOPMENTS IN CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00551R000200190002-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: May 3, 2007
• Sequence Number: 2
• Content Type: REPORT

Approved For Release 2007i0~5~t~~~1,4-RDP83B005518000200190002-6~ ~ ~ ~~ ,,~ .t
Developments in China
Deng Xiaoping remains the dominant, driving political force in China.
At 77, his first priority is to ensure that reliable successors will continue
his work after he dies. In the last eighteen months, Deng has engineered
the removal of Mao's successor, Hua Guofeng, from his top jobs and replaced
him with a party chairman and premier of Deng's own choosing. To keep his
designated heirs in power, Deng is spearheading efforts to reform the
bureaucracy and economy and to reduce further the political influence of the
army.
Resistance to Deng's Reforms
There is strong resistance to Deng's personnel appointments and reform
program. Party conservatives object to the pace and scope of the changes in
China's economy and society since 1979 fearing they will threaten the party's
grip on power as in Poland. Deng shares some of these concerns himself.
"Leftist leaders," who advocate Mao's radical policies of the late 1960s,
are opposed to Deng's reforms but they are few in number. Millions of mid-level
officials who feel threatened by Deng's changes form afar greater obstacle.
The Military
The military poses special problems. Elements within the army leadership
are unhappy with the choice of Hu Yaobang to be Party Chairman. Because of
Hu's low standing with the military, Deng has had to take charge of the party's
military commission himself. Armymen have argued with the reformers on some
bread-and-butter issues, including cuts in defense spending, and accommodations
have been made. The military would also like to see more emphasis on ideology,
and many are unhappy with the criticism of Mao that has occurred since 1980.
However, the army at present does not constitute a unified opposition.
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Deng is also trying to upgrade the quality of the military, a program
that has considerable military support. Bloated units of the army are being
pressed to meet higher performance standards, retire elderly commanders, and
demobilize excess and unskilled troops.
Mixed Results in the Economy
The party's leaders have resigned themselves to another year of low
growth and a sizeable budget deficit. Economic policymakers had originally
hoped to complete a readjustment of the economy in favor of light industry
and agriculture by next year, but they now realize that it will take longer.
This slow growth scenario leaves little cushion for exigencies and will make
restructuring the economy more difficult. Attempts to restrict the size of
bonuses or to raise the price of some staples to reduce the deficit run the
risk of worker unrest.
Government Reorganization
With his men in place at the top, Deng is moving to reduce opposition
to his program among former "leftist leaders" and mid-level officials.
Beijing has announced its intention to reduce the size of the bureaucracy
and the number of agencies. Essentially a purge of political enemies in the
guise of disinterested reform, this will be a major test of Deng's group.
Given the compromises Deng has made to get this far, it is extremely unlikely
he will reach his maximum goals. With his opponents on the defensive, however,
Deng intends to divide and neutralize enough of them to reduce the threat to
his chosen successors.
What if Deng Leaves the Scene?
Deng needs the next several years to accomplish his basic objectives.
If he departs in the next few years, party Chairman Hu Yaobang may have a
hard time hanging on. But should the reform coalition fall apart, the outlook
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would not necessarily be drastic for the US. Beijing's fundamental anti-
Soviet orientation appears firm. The Chinese still appear determined to
expand their trade and technology transfer with the West, although they are
concerned about the social consequences of such contacts. The lack of
a coherent coalition to step into the breach, however, would complicate
China's dealings with the US. As leaders struggled for dominance, US-China
relations would encounter indecision, delay and increased caution.
Sino-US Relations and Taiwan
Relations with China have continued to develop, but in the past year
the issue of US arms sales to Taiwan has become the main stumbling block to
progress in several areas. Notwithstanding these bilateral difficulties,
tensions in the Taiwan Strait remain low and Beijing continues to highlight
its call for peaceful reunification. Contacts, correspondence and trade
between the mainland and the island have increased significantly in the
last several years; last fall, China publicized widely its latest set of
proposals to facilitate reunification. Taipei has repeatedly and categorically
rejected these initiatives, but has made no moves to increase tensions with
the mainland.
Despite the fact that China is not presently capable of invading Taiwan,
Taipei insists that the threat from the mainland is immediate and real and
that it needs advanced US weaponry to ensure its security. Privately,
however, officials in Taipei :have accepted the current level of US
support -- including the latest US decisions on arms sales -- and have been
pleased with the course of bilateral relations in the last year. But Taipei
remains basically uncertain about its long term security -- and about the
reliability of the US as an arms supplier -- and it is certain to continue
to seek other sources of supply and to press the US in private for increased
assistance and guarantees.
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Sino-Soviet Relations
Hostility to the USSR remains at the core of China's foreign policy,
which explicitly rejects the idea of adopting an equidistant stand between
Washington and Moscow or of playing American or Soviet "cards." The Chinese
leadership believes that the Soviets are the major threat to world peace
and the greatest immediate threat to China. Although China has recently
become more critical of US tendencies toward "hegemony" -- partly because of
differences over Taiwan -- Beijing is also seeking to encourage efforts to
combat the expansion of Soviet influence. In the Third World, for example,
the Chinese have criticized US policies. which in their view undercut the
anti-Soviet campaign.
In its propaganda, Beijing has played up the difficulties facing the
USSR -- with ,its economy at home and with its positions in Poland, Afghanistan,
and Indochina -- and also has tried to appear reasonable in its dealings with
Moscow. Beijing has not rejected the latest Soviet initiative to reopen
border talks, which have been in abeyance since 1978. Even if the talks are
resumed, however, Chinese officials have all but stated that Sino-Soviet
relations will not improve so long as the Soviets maintain their occupation
of Afghanistan and their aggressive behavior elsewhere.
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The Conflict in Kampuchea
'If~ere has been no meaningful change in the overall strategic military
situation in Kampuchea during the past year. Over the past three months, haa-
ever, the People's Army of Vietnam (PAVN) has worked hard tro replenish and
reorganize its forces in Kampuchea, to strengthen and broaden its logistics
routes to the Thai border, and to improve troop morale. With little advance
warning, the Vietnamese could carry out sharp, hard-hitting thrusts against
several vulnerable Khmer resistance camps. Recent Vietnamese reconnaissance
probes and limited offensive initiatives along the border have raised tensions,
but actual fighting has been light.
Military Balance in Kampuchea
Vietnam has 18-20 divisions (an estimated 180,000 troops) in Kampuchea.
Nearly half aXe near the 7.hai border. These troops are well armed and equipped
with conventional weapons provided primarily by the Soviet Union. 'Ivey
control major population centers, most principal lines of cca~mlmication, and
are effectively protecting key rice-grc~aing areas.
Vietnam could draw on reserves tro reinforce its position in Kampuchea
if challenged by greater resistance activity. Vietnam will be able to meet
the costs of occupation as long as Soviet aid bolsters it against the dcanestic
and international pressures that might otherwise alter its behavior.
D~iocratic Kampuchea (DK) guerrilla. forces (estimated to be at least
35,000 troops) bear the brunt of fighting against the Vietnamese. Small DK
units operate in virtually every region of Kampuchea but they do not attempt
to hold territory or expel the Vietnamese fran major positions.
mile the DK are now stronger than at any time over the past three
years, they are totally dependent on Chinese financial and military support
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and on Zhai cooperation. 'The DK does not have sufficient recruits to expand
its forces rapidly, and conservation of manpower is an Overriding DK concern.
In general, the DK aim to keep up the military pressure that it has
applied over the past three years. 'They are seekirx3 to wear down the Viet
namese physically and mentally through sustained but low level conflict.
~e Khmer People's National Liberation Force (KPNLF) is the largest
and most active non-moist resistance group operating in Kampuchea. The
KPNLF forces (estimated at 6-8,000 troops) will riot soon achieve military
parity with the DK. The majority of the KPNLF's armed forces lack training,
carat experience, and leadership. While the nucleus of a good KPNLF guerrilla
force (2,000 troops) is developing along the 7~ai border, growth is hindered
by recruitment, financial and supply problans.
The KPNLF does not have the potential to develop into a force strong
enough to challenge the Vietnamese in Kampuchea.
Non-Cattminist resistance forces loyal to Prince Sihanrnik number
less than 1,000 troops. Zhese troops do not carry out any meaningful military
operations and are not a factor in the Kampuchean conflict.
Status of Coalition Talks
There have been num,Pxous attempts to get the various Khmex resistance
factions to fomn a united front to add political pressure on Vietnam. Thus
far, all have failed. Political maneuvering currently is focused on Singapore's
loose coalition proposal. ~e non-Comtrnznists support the proposal. The DK
are expected to reject it because they believe it assigns than a subordinate
role in the -resistance.
~e DK, nonetheless, believe some form of united front is essential
to defeat the Vietnamese, and are expected to make a oount:Pxproposal during
the next few weeks.
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The prospects for an effective coalition of the divided and antagonistic
Khmer resistance groups are not good. Even if sane form of association among
them is eventually established, the groups will - for all practical praposes --
continue to operate as separate entities.
Soviet and Chinese Goals in Indochina
In attempting to expand its influence in Southeast Asia, Nbscow's principal
concerns are to contain China and diminish US infleunce, for the present cony
plementing Vietnam's national interests. For their sizable ecorvanic investment
in support of Vietnamese policy in Indochina, the Soviets have already realized
substantial returns. They have a highly visible advisory presence throughout
Indochina, and have gained access to Vietnamese air and naval facilities which
enhance their military capabilities in Southeast Asia. These facilities enable
the Soviets to better support Indian Ocean deployments and to expand intelligence
collection capabilities in the region. Mosoaw will seek greater influence in
Southeast Asia over the longer term by using Vietnam and the neighboring
Indochina states to strengthen its presence in the region.
China's principal goal in Kampuchea is to prevent the expansion of
Vietnamese and Soviet influence. Beijing probably perceives little alternative
to a relationship with Hanoi marked by long-team hostility and has sought few
alternatives to a policy aimed at keeping pressure on Vietnam. The Chinese
believe such a strategy will eventually force Hanoi to retrench in Kampuchea
and loosen its ties to the Soviets. Chinese interests thus are served by
protracted warfare in Kampuchea -- it weakens Vietnam, creates opportunities
to strengthen Chinese influence in Thailand, and gives Beijing the opportunity
to visibly demonstrate its support for ASEAN policies.
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