CHINESE AFFAIRS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R000700020006-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 20, 2016
• Document Release Date: December 28, 2005
• Sequence Number: 6
• Publication Date: April 30, 1973
• Content Type: REPORT

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cre?
o
Chinese Affairs
NSA review completed
State Department review completed
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Top Secret
G 25X1
3') April 1973
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Chinese Affairs
CONTENTS
? 30 April 1973
Back to the Farm . . . . . . . . . . . . . . . . . . . . . . . .
China and Japan: Going to the People on Tyumen . . . . . . . . . 2
More Transfers in the Provinces . . . . . . . . . . . . . . . . . . 4
From Peking with Moderation . . . . . . . . . . . . . . . . . . 5
A Temperate Stance at ECAFI Too . . . . . . . . . . . . . . . . 6
Echcverria in Peking . . . . . . . . . . . . . . . . . . . . . . 8
China's Researchers Reorganized . . . . . . . . . . . . . . . . . 9
Leadership Notes . . . . . . . . . . . . . . . . . . . . . . . 11
ANNEX- Economic Dimensions of Chinese Diplomacy . . . . . . . 12
('11RONOLOGY . . . . . . . . . . . . . . . . . . . . . . . 14
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Back to the Farin
25X1
The campaign to scud educated youths to the rural areas has been intensified
this year after it sharp cutback in 1972. A provincial official announced In March
that "one or two million" young people will be rusticated coilllpare(
hundred thousand I:psi year. a cen ra, directive issued last Dcccrr.ber, which
repor e y suspent ct tie recruitment of new factory workers, If this is correct,
young people already in the countryside who had hoped for reassignment to urban
factories and middle school graduates who now have no other employment pros-
pects would swell the number of young people assigned to rural areas,
furze on factory hiring is for three years, Le? the
renuun er ol Me current ivc-y';ar plan (1971.75), The current plan may have been
revised to put even greater emphasis on agriculture in the wake of last year's
disappointing harvest. In any case, the increased down-to-the-countryside program
probably stems in part from economic considerations and may be an attempt to
boost agricultural output by providing extra manpower for projects such as water
conservancy.
Rustication of educated youth has had deep political as well as economic roots.
It is consistent with Mao's long-standing belief that life and work ame,ng the peasants
creates a healthy political attitude. Since the Cultural Revolution, rustication has
been used as much to indoctrinate and discipline youth as to provide assistance for
rural areas.
The controversy among the top leadership stirred up by the renewed program
seems to be linked to the still unresolved Lin Tian affair. In December. Lin was
attacked for the first time as an "ultra-rightist," on grounds that he allegedly
opposed rustication and other policies in vogue during and immediately after the
Cultural Revolution. Also in December, the media began to tout "new things"-
rustication and other Cultural Revolution programs-in a leftist-inspired campaign to
preserve at least some as e ? . of the Cultural Revolution. 25X1
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Ci't,rese Affairs
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 Chinn and Japan: Going to the People on'Tyunten
Peking is now emphasizing contacts with private groups and "people-to-people"
diplomacy despite the displeasure of the Japanese Government, These tactics which
('eking used last year to push Tokyo toward diplomatic recognition of the NW--arc
ai-ned at dissuading the Tanaka government from proceeding with the proposed
Japanese-Soviet Tyumen oil project.
When the low-key approach that China has used since early this year failed,
Chou decided to try to ?nfluence Japanese public opinion and private groups directly
in the hope that this would deter the 'Tanaka government. Ile quickly completed
plans for it long-awaited mission to Japan, and chose Liao Cheng-chip, president of
the China-Japan Friendship Association and China's highest ranking expert on
Japanese affairs, to head the 55-member "private" delegation. When Liao arrived in
Tokyo in mid-April, there was every indication that he and his delegation would use
media coverage of their activities to warn of Ilic dangers inherent in cooperating
with Moscow to develop Siberian oil reservea, 25X1
the mission was designed to make it difficult for Tanaka to procee wit a t ,e b- ion
dollar oil deal without in return getting some concessions on the Northern Terri-
tories.
The Chinese undoubtedly realize that their heavy-handed maneuvers could
damage Sino-Japanese relations. They see the Tyumen project, however, as an
important step toward closer Japanese-Soviet relations.?Their recurring nightmare is
that Asia's most powerful industrial nation might become aligned with Peking's mos^
feared and hated neighbor. Thus, the Chinese probably reason that, despite the risks
to bilateral relations, they must impress Tokyo with just how strongly the oppose
anvthine that snacks of a Soviet-Japanese rapprochement.
30 April 1973 Chinese Affairs
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More 't'ransfers in the Provinces
Since the Lin Piao al'Iair in September I971, a number of top-ranking military
officials in the provinces have been purged or have simply dropped from public view.
Now, steps are being taken to I'll] the void. Peking apparently feels that In the
interest of over-all stability each province should have it clearly designated head,
even if that person is only the "prin;ipal responsible person." The situation in the
provinces contrasts with that in Peking, where the important party and army posts
held by Lin and several other central military leaders purged along with hint remain
vacant.
The new lineup In the fractious province of Kweichow was revealed on 16
April. The "principal responsible person" there is Lu Jui-lin, an army veteran from
neighboring Yunnan. Lu is the third military chief to be transferred to Kweichow
since the start of the Cultural Revolution.
In Ilunun the new man-on-the-scene is party veteran Chang Ping-hua. Chang
replaces a military officer who dropped from public view last fall and who may have
been implicated in Lin's alleged coup plot. Chang Ping-hua's career has come full
circle. He was first party secretary of Hunan, when he was publicly humiliated in
1966 by militant Red Guards. lie returned to public life in 1971 in another
province. Since his reappearance in Hunan in mid-April, Chang has been relatively
active, greeting foreign visitors and organizing efforts to increase cotton production.
These latest lateral transfers follow a pattern that has been in evid,,nce since the
start of the Cultural Revolution. After leaders have been purged in one province,
Peking has usually moved in new leader. from outside (occasionally they were
brought up from within the local hierarchy). Before Lin's demise in 1971, these
lateral moves almost invariably involved military professionals. Of late, however,
some veteran civilian officials, like Chang Ping-hua, are being used as trouble
shooters, presumably assigned the mission of restoring order and harmony and
ensuring compliance with orders from the ;,sntcr. The use of these civilian officials is
in keeping with Peking's avowed intention of gradually restoring the balance
between civilian and military authority in China,
Many of China's provincial elite, whether military or civilian, are still being
asked to implement what often appear to be conflicting directives from Peking.
Moreover, they are sometimes plh'ced in tight spots. For example, Chang Ping-hua
will not only have to mend fences with local military leaders, who will regard his
appointment as an effort to dilute their authority, but also with leftist forces in the
province who were instrumental in ousting him and his suppoi tors in the first place.
Chai;g's authority is circumscribed by the fact that Hunan's nominal first secretary,
Hua Kuci-feng, retains his Hunan party and government titles even though he has
taken up new duties in Peking. The central leadership i3 undoubtedly aware of 25X1
Chang':; dilemma and of similar problems in other provinces, but seems unwilling or
unable to help out.
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from Peking with Moderation
25X1
Moderate r--,actions to contentious issues emphasize Peking's strong interest in
norr,talizing relations with Ioriner adversaries and in defusing Indochina as a control-
ling issue in Asl in affairs.
China's interest in maintaining movement toward Sino-Indian rapprochement
was clearly demonstrated by its mild reaction to India's Intervention In Sikkim.
Chinese press reports have been sparse and without an authoritative stamp, The press
has criticized India's intervention and New Delhi's "unequal" treaty with Sikkim;
there has been no reference to Chinese interests, despite Peking's sensitivity to 25X1
developments on its Himalayan frontier.
Nowhere has Peking's turn toward moderation been more evident than in its
treatment of Indochina. Since President Nixon's China trip, Peking's statements have
been less biting in tone and more sparing of US actions and motives in Indochina
than commentary from the Indochinese Communists. Peking's latest statements
appear even more shaded on the side of moderation and flexibility than high-level
Chinese commentary a few weeks ago. A People's Daily editorial on 25 April used a
softer form lation than in the past in expressing Peking's terms for a Cambodian
settlement. Several times recently authoritative Chinese commentaries have
addressed the question of "foreign" involvement in Laos and Cambodia in a way
that leaves the impression that Peking may have not only the US in mind but also
Hanoi.
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ATemperate Stance at ECAFE'Too
China's appearance at the I:CAVI; meeting in Tokyo gave Peking an oppor-
tunity to advance Utz interests of the smaller Asian Communist regimes and to
expound on population policy, economic self reliance, cooperation, and aid. The
Chinese generally stayed In the background, keeping an eye on their own policy
needs as wek'l as on Issues appealing to the Third Wo rid.
In his opening statement, China's chief delegate An Chih-yuan claimed that
Prince Sihanouk's exile regime, the Provisional Revolutionary Government of South
Vietnam, and North Korea ought to be in ECAFE. In the early days of the session,
the Chinese delegate emphasizet he point by walking out during speeches by
Cambodian, South Korean, and South Vietnamese representatives, but latrs the
Chinese dropped the dramatics and remained at the meetings.
The Chinese statement on birth control, it sensitive subject in Peking, illustrated
the difficulty of reconciling the hard realities of population pressure with Marxist
theory that the masses are the motive force of history and economic development.
The Chinese, conceding that some problems may arise as the population increases,
described China's policy as "population increase in a planned way." They also
indicated that they were willing to learn from the experiences of other nations. (!for
An's remarks on self-reliance and trade, see the Annc., "Econoinic Dimensions of
Chinese Diplomacy.")
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Echeverria in Pekin
Mexican President Echeverria's five-day visit to China ended 24 April on a high
note. The Mexican leader received a promise that Peking would sign Protocol 11 of
the Treaty of"I'latclolco banning nuclear weapons from Latin America. The Chinese
used the visit to polish their image as a champion of Third World interests.
The decision to sign the protocol was in line with Chinese ass'':rances to Mexico
last fall that Peking would not introc'uce nuclear weapons into Latin America. The
Chinese made it clear, however, that they were still opposed to passages in the
protocol that endorse the nuclear non-proliferation and partial test-ban treaties. By
agreeing to sign, the Chinese not only p;e: ved Echeverria, but stole a propaganda
march on the USSR, now the only nuclear power that has not subscribed or
promised to subscribe to the agreement.
The two sides signed a $40 million trade agreement that will run for a year. The
Chinese endorsed President Echeverria's concept of a charter of economic rights and
duties of states and reiterated their support for a 200-mile limit for maritime
economic rights. As dressing on the cake, the two countries agreed to undertake
cultural, scientific, and technical exchanges during 1973-74.
The Chinese followed their standard routine for high level guests in entertaining
Echeverria-a gala welcome, a mieting with Mao and talks with Ch,-,U, and a short
tour of other parts of the country. Public comments imply that both sides attach
considerable symbolic importance to this visit, the first to China by r Latin
American chief of state. The Chinese and their guest played heavily on Third World
themes-the encouragement of economic nationalism and opposition to superpower
hegemony and spheres of interest, but neither the US nor the USSR was specifically
attacked. The Chinese doubtless hope that Echeverria's visit will give new impetus to
their lagging campaign to expand relations with Latin America.
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 China's Researchers Reor anited
F-- I
('IiIiia's science and technology organitr llony underwent it nwjor shakeup
during! the ('ullural Revolution at all levels and in both the civil and military science
stroetute, Scientific organizations were reduced in she merged. or abolished. The
objective, il' there was one, was to put national research under provincial and
municipal administration so that the needs of local industry could be served more
effectively. The changes emphasized the importance of applied research and the
integration of research with industrial production. The result was excessive deccit-
trali,ation, dc?enipha.iis of basic research, and an erosion of professionalism in the
administration of s''lentific activity.
To correct these imbalances, readjustments are slowly being made. The State
Scientific and Technological Committee of the State Council was abolished and
replaced in part by the Science and Education Group, which was first noted in May
1971. The committee's functions were distributed among this new "group,'' the
Chinese Academy of Sciences, and the National Defense Science and Technology
Committee. The "group" may he an interim organization, but it is now responsible
for civilian research and JevelopnienI planning, relations with torcign scientific
c:omill till it ies, and scientific and !ethnical education.
A related development was the reappearance, after a long eclipse, of the State
Science and Technology Association. Before the Cultural Revolution, the association
was an influential advisory organization concerned with coordinating scientific and
technological activities and promulgating scientific knowledge, but it is now mainly
a front organization for foreign scientific contacts. The Chinese have equated the
association with the US Committee on Scholarly Communication with the ['copies
Republic of ('Iiiua- a non?governmcnt body active in promoting better relations with
Nina. The association's sponsorship of conferences and journals has not resumed,
but technical societies and scientific publications are slowly reappearing.
The Chinese Academy of Sciences has undergone major changes. Only a dozen
of the more basic institutes, such as the Institutes of Physics and Mathematics, are
administered by the academy from the center. Many applied research institutes have
been placed under the direct control of provincial or municipal science and tech-
nology bureaus. The academy still has some control over the plans and resources of
these institutes, even though some of them have been placed entirely under the
Ministry of National Defense and other ministries. The Academy of Medical Sci-
ences, the Academy of Agricultural Sciences, and numerous other industrial research
academies have been similarly reorganized.
Major organizational changes affecting science have apparently taken place
within the Ministry of National Defense too, but the nature of these changes is not
clear. The National Defense Science and Technology Committee appears to be intact
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and has absorbed a number of research mills from the Academy of Science and
other urgauir,ations, Including the institute of Atmospheric Research. Certain units
supporting the. nailitaI)' Thar were under th i Central Meteorological i3urcau, Occanol-
ogy i3ureau, and Survey and Cartography Bureau reportedly have been placed under
more direct military control.
The problems involved in finding a proper balance between basic and applied
research have not been fully resolved. While there has been it reallocation of
resources between military and civilian research, the cxtcnt is not known. In some
respects, the mechanisms for exchanging scientific and technical information have
bcen affected adversely, but In general the redirection of the efforts of many
scientists and tech ' eians toward applied research has led to technical advances in
China's Industries.
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Leadership Notes
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Since his rehabilitation on 12 April, former party secretary-general 'I'enlt
Iisiaoyiing has been fairly active not as active as China's busiest vice-prettier, LI
Ilsicn-nien, but certainly more so than the three other rehabilitated vice-premiers.
Ile was on his own on 20 April when he escorted Mexican President Fchcverria to a
commune outside Peking, but his other appearances have been at the side of 1.1
Ilsiell-nicid
I an article It er I- lag was ess reass t t g. c ec e e
c es 01110,11 orgt .mess, but made no reference to their returning to active duty.
This may indicate that some leaders oppose Teng's new role.
Also in the limelight of late has been Chou Ell-Tai's wife, Teng Ying?chiao. She
has been elevated in official listings to a group of leaders just below Politburo level,
and has made several public appearances, 11cr recent visibility may be the result of
her prominent role in the Women's Federation, a mass organization being rebuilt at
the lower levels. The organization has yet to be officially re-established at the
national level, but Teng, one of its vice-chairmen, was identified in this post a year
ago. She and Mao's wife. Chiang Ching, are China's most prominent women, but the
two rarely appear together. Mmc. Mao has not been seen since 11, March.
On 21 April, Shanghai's third-ranking party leader, Wang bung-wen, was named
head of the Shanghai branch of the All-China Federation of Trade Unions, another
mass organization in the process of being rebuilt. Wang is sometimes in Shanghai and
sometimes in Peking, where he heads the list of central leaders just below the
Politburo. His new Shanghai post may be a clue to his role at the center: it is
possible that Wang is a leader of the national trade union organization.
Wang (tai Jung, who is alleged to be Mao's niece, may have missed out on a
promotion. As a deputy director of the Foreign Ministry's Protocol Department, she
could move into the directorship now that the former director has been reassigned
to the Liaison Office in Washington. The new US team in Peking has noted,
however, that another deputy director is the "acting" protocol chief. Because of her
tutored ties to Mao, many have interpreted Wang's role in the leadership as stand-in
for the chairman. In fact, it was Wang who escorted Teng Hsiao-ping at his coming
out on the 12th, a m ve interpreted by some as a sign that Mao personally endorsed
Teng's rehabilitation. 25X1
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Economic Dimensions of Chinese Diplontncy
25X1
The transformation ttl' Chinese foreign trade policy now In process has both
shaped and been shaped by the global diplomatic strategy Peking has been pursuing
over the past three years. (laving overcome the self-imposed diplomatic Isolation of
the Cultural Revolution by normalizing relations with the major Western powers,
China is now laying the groundwork for a substantial expansion in economic
relations with the advanced industrial nations of the non-Communist world. One
goal of this expansion is a more rapid motlernization and industrialization of the
Chinese economy than could be realized by adhering strictly to the conservative
financial at d trade policies that have characterized China's economic behavior over
the past decade.
In late 1972 and early 1973, the Chinese launched a drive of unprecedented
scope to import scientific knowledge and advanced Industrial technology from Japan
and the west, In the first four months of 1973. the Chinese purchased almost $300
million in ?tro chemical plants from Japan, West Europe. and the United
States.
The largest sum put into whole-plant purchases from Japan and the West in any
previous year was $95 million in 1965. China first bought entire plants from the
non 'ornmunist world in 1963, and it increased such purchases yearly until 196.5.
The importation of Western technology came under strong attack during the
Cultural Revolution, however, and purchases fell to $32 million in 1966. Very few
plants were purchased between 1967 and January 1973.
This year's large increase in plant purchases has been facilitated by China's
willingness to finance many of them through five-year credits. A further increase in
plant purchases in future years might require the use of longer term financing, and
the Chinese have expressed a willingness
to accept ten-year terms. While it has accepted five-year credits both before and
since the Cultural Revolution, China has never accepted a ten-year loan from a
non-C'ontntt?lu st coon!:;.
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 Chou L11-lai developed this Ihenme by saying Ihat over the next five to ten years
C'Itlwa will conIiiute its policy of seeking friendly state-to-state relations, and wil;
step up Industrial development by relying on Japan and the West for new scientific
and technological knowledge and industrial plants and equipment, Chou suggested
that China's over-all goal was to more effectively counter Soviet power in the world.
lie doubtless is aware that Peking will have difficulty reaching this goal without
extensive economic and technological modernization, and lie is undoubtedly acutely
conscious of how far China's economy still has to go. Peking's drive for moderniza-
tion and its diplomatic strategy are mutually reinforcing, which increases the
likelihood that China will indeed try to expand its economic and diplomatic ties
with Japan. Western iiulope, and the United States.
In an apparent effort to lay the theoretical groundwork for trade expansion, a
Chinese spokesman in mid-April offered what amounted to a redefinition of the
Maoist economic doctrine of "self-reliance." Speaking at E CAFE'. Chinese represent-
ative An Chili-yuan said that "self-reliance means for a country to rely mainly
on...its people, exploit natural resources, or use foreign resources...according to its
Own needs ants possibilities.'' To make his point more explicit, An said. "self-reliance
does not preclude international economic and trade relations." lie added that the
Chinese are "ready to learn from the advanced experience of other peoples to make
up for our own inadequacy."
An was speaking of self-reliance as an operative principle for developing
nations. but he made clear that he included China in this category. lie was careful to
say that foreign resources must he obtained on the principle of equality and mutual
benefit. The normalization of diplomatic relations with the free world's major
industrial countries in fact places Peking in the position of being able at times to
play these countries off against one another as they compete to sell China the
advanced technology it needs and wants to strengthen itself economically and
militarily. By carefully planning its purchases. Peking will try to avoid becoming so
closely tied to any single power that its independence or freedom of action will
impaired.
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 3-I5 April I5th China-Vietnam border railway conference held in Hanoi,
Chinese delegation received by Premier Pha m Van I)ong.
a
12 April Chinese delegation arrives in Moscow for low-level trade talks.
14 April Somali minister of foreign trade and a Ghanaian trade delegation
arrive in Peking.
15 April The annual spring export commodities fair opens in Canton;
officials from the US Consulate In I long Kong attend for the first
16 April Delegation of China-Japan Friendship Association, led by Liao
C'hcng-chi) arrives in Tokyo for month-long visit.
16-23 April Iligh-ranking Pathet Lao delegation headed byNouhak Phoumsavan
in Peking; holds talks with Li lisien-nice, Madame Binh, and
Sihanouk.
18 April
19 April
19-24 April
Advance party of PRC Liaison Office, headed by Deputy Chief
Ilan Isu, arrives in Washington.
West Germany's first ambassador to the PRC presents his creden-
tials to Tung Pi-wu.
1973-74.
Mexican President Ichcverria visits Peking; China agrees to sign
Protocol II of the Treaty of Tlatelolco, to a $40-million trade
agreement, and to cultural, scientific, and technical exchanges for
20 April People's Dally "Commentator" publishes on situation in Laos and
with Yell Chiell-ying.
Cambodian pilot who bombed presidential palace in Phnom Penh
on 17 March a* ves in Peking; holds press conference and talks
21-23 April Madame Binh in Peking en route to Vietnam from North Korea.
22 April First Australian ambassador arrives in Peking.
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Canadian minister of ene arrives for discussic'n of petroleum
matters.
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First PIZC agricultural technicians arrive In Togo,
23 April Peking brorcdcasss it I'roplr's Daily' editorial noting the sinrulta-
nCO 4 (onver:ing of municipal trade union congresses in Peking
and Shanghai between IG and 21 April; the editorial is the first
authoritative endorsement of the line that Lin Mao was "ultra-
righ tist,"
24-25 April On occasion of third anniversary of Indochina summit conference,
Peking sends congratulatory message signed by Chou Isn?lai and
Tung 1'i-wit to Vietnamese, Lao, and Cambodian conferees:
l'rople'.s I)aily publishes editorial, and Ych Chien- in ! addresses
reception in ('eking hosted by Cambodian exiles. 25X1
Xuan 'I'huy in Peking en route to Itanoi from Paris; holds talks
with Chou En?lai, along with Ituar,g ('hen, designated head of US 25X1
Liaison ol'I'ice, and Sihanouk.
25 April
Nigerian Commissioner for Foreign Affair:: arrives i't Peking.
0
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