EAST ASIAN PROSPECTS FOR 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83T00966R000100010043-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Document Release Date: May 14, 2007
• Sequence Number: 43
• Publication Date: January 15, 1982
• Content Type: REPORT

Approved For Release 2007/05/14: CIA-R DP83T00966R000100010043-3
15 January 1982
SUBJECT: East Asian Prospects for 1982
An Overview of East Asia in 1982 is given below:
The succession to Deng Xiaoping will continue to be a major item
in 1982, raising the possibility but not the likelihood of instability
in domestic politics and stagnation in foreign relations. Chinese-US
relations will remain influenced by Taiwan. If the Taiwan arms sale issue
is handled smoothly, relations with both China and Taiwan are likely to
improve.
An adverse US trade balance with Japan and bargaining over Japan's
defense budget will mar but not spoil US-Japanese bilateral relations
in 1982. Unless US reactions stiffen markedly, however, Japan will take
only halting and largely ineffective steps towards moderating these
chronic problems.
Kampuchda could become an important issue for US policymakers if
a non-military aid package is extended through ASEAN to non-Communist
Kampuchean resistance forces. No major changes in the military situation
are expected.
War is unlikely on the Korean Peninsula in 1982, but both Koreas face
serious economic problems. In the north the succession to Kim I1-song's
son and in the south the legitimacy of the Chun Doo Hwan government are
matters of pressing concern. US relations with South Korea remain cordial.
The US-ASEAN dialogue remains focussed on means of dealing with
Vietnam's occupation of Kampuchea. ASEAN is not a monolith on this
question, but ASEAN's organizational unity is not at stake. ASEAN countries
would welcome. increased US participation in Southeast Asian affairs as a
counterweight to Chinese and Soviet activity.
Country by country prospects for 1982 are given below:
China: Deng Xiaoping has little time left in which to complete
planning for his own succession. Although his appointees occupy most key
positions in the bureaucracy and his economic policies have gained general
acceptance, the attitudes of senior military officers remain in question.
If China's economy resumes growth and the military becomes more supportive,
Deng's succession plans are likely *to succeed; if not, China may enter a
period of political instability in 1982.
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Chinese-US bilateral relations will remain heavily influenced by
Taiwan. A mutually acceptable handling of thq?.Taiwan arms sale issue
tops the Chinese-US agenda for 1982. If.agreed,"DS relations with both
China and Taiwan are likely to improve. In an atmosphere of improved
relations the US will face the question of how much and what kind of
military and dual-use civili#n technology-to make available to China.
Chinese relations with the Soviet Union will continue to be
influenced by China's assessment of the US as a strategic partner.
China is likely to seek some improvements in state-to-state relations
with the Soviet Union, but is equally likely to eschew improved party-to-
party ties. There is ample room to improve trade relations, river
navigation arrangements, and border controls without fundamentally
altering the adversarial nature of Chinese-Soviet relations. Looking
to its southern flank, China will continue to engage India in border
talks which have as their objective a modest reduction of Soviet
influence in India; not much progress is expected. The Chinese will
remain Democratic Kampuchea's. only foreign supporter and will continue
to encourage the formation of a coalition of resistance groups which would
secure Democratic Kampuchea's position.
Japan: Trade issues will dominate US relations with Japan in 1982 --
the bilateral trade imbalance could exceed 1982 levels. Although Japan'will
dismantle many remaining non-tariff barriers and address specific sectoral
trade problems, the imbalance could grow. A stronger yen will help somewhat.
The Japanese leadership remains divided on whether or how to seek a more
lasting solution to this chronic problem. Meanwhile, Japanese industrial
policy decisions will continue to enhance their position of technical
dominance in such fields as robotics, VLSI, consumer electronics, and
semiconductors, and to sharpen their threat to US technical dominance in
such fields as advanced computers, gene splicing, and office automation.
Contention over Japan's level of defense spending is also likely to
disturb bilateral relations in 1982. Although the rate of increase in
defense spending accelerated slightly in 1982, the Japanese have already
given notice that they will not press for a similar rate of increase in
1982. This decision, unless modified, could cause defense spending as a
percentage of GNP to fall below this year's level of .91%. Against this
backdrop, the criticism in the US that Japan is not doing its part in
strategic defense is likely to increase, leading to pressure and accusations
from the US side.
Kampuchea: There is little military basis for anticipating any
significant change in the low level of military activity within Kampuchea.
However, Vietnam's downward economic spiral may compel even Hanoi's hard-
bitten leaders to lower their level of investment to maintain Kampuchea as
a compliant puppet state. Although differences of opinion among the ASEAN
countries over Kampuchea may be.-reconcilable, it is unclear whether Thailand
and Singapore are prepared to.follow through with their pledge to provide
substantial military and othef'assistance to the non-Communist resistance
in Kampuchea. This in turn effects US willingness to move on stage. in 1982
with a modest non-military aid package.
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Korea: Reflecting world economic condit ns, South Korea faces
internal strains which are posing a challenge to the new Chun Doo Hwan
government's search for legitimacy and will further inhibit the growth of
democratic institutions. South Korea's export fueled boom has sputtered
to a stop and internal economic growth remains stagnant. Beyond these
problems, Seoul-Washington relations are cordial, with President Chun showing
confidence in the US defense commitment.
North Korea
1Some
American experts both inside and outside e ov hat
a coordinated Seoul-Washington discrete probe of North Korea's oft-repeated
desire for negotiations could be carried out at relatively low cost. North
Korean internal economic difficulties and problems in Pyongyang's relations
with both Beijing and Moscow provide abase for surmise that the North may
be moving toward interacting with the West. Like China, North Korea also
faces a political succession problem. Also like China, it is unclear
whether senior military leaders support Kil I1-song's chosen successor, his
son, Kim Chung-il. The younger Kim's abilities are likely to be tested in
1982. Although a North Korean attack on South Korea always remains a
possibility, there is little evidence that North Korea is preparing to
initiate hostilities in the near future.
Philippines: The US will negotiate with the Philippines over the
continuation of the agreement which permits use of important military
facilities at Subic Bay and Clark Field. This will dominate the bilateral
relationship during this period and produce posturing among Filipino
political figures both supporting and opposing President Marcos. His rule
does not appear to be in danger, though reports of health problems are
persistent. In addition, the New People's Army and the Moro National
Liberation Front will continue to grow somewhat, posing a problem for
but not a challenge to the Marcos regime.
Indonesia: Popular elections are scheduled for 1982. Although there
is no prospect that the Suharto government will be thrown out of office,
declining hard currency earnings and unrest surrounding the elections will
make 1982 an eventful and perhaps troubled year. The only bilateral issue
separating the US and Indonesia -- the conviction among Indonesians that
the US has lost interest both in Indonesia and in South East Asia -- is
unlikely to diminish in 1982.
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