CHINESE AFFAIRS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R000700020022-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 16, 2016
• Document Release Date: December 10, 2004
• Sequence Number: 22
• Publication Date: December 11, 1973
• Content Type: REPORT

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Top Secret
Chinese Affairs
State Department review. completed
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Tops !cret
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,11 December 1973
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Chinese Affairs
This publication Is prepared by the China branches of the East Asia ? Pacific
Dlvlsloi of the Office of Current Intelligence, with contributions from other
offices within the Directorate of Intelligence and from the Directorate of
Scion:e and Technology. Comments and queries ere welcome. They should
be directed to the authors of the individual articles,
CON7'l N'FS
Sino-Soviet Relations: Continuing Differences
The Cunfucius Campaign: Action and Reaction
The 1973 1 larvest and Grain Imports. ,
Worries About the Middle Fast
Problems in China's Civil Research Institutions . . . . . . .
Fall Canton Fair: Good But Not Great
Broader Role for Electronics
Diplomatic and Political Notes
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Sino-Soviet Relations: Continui I Differences
In a conversation with US officials in Moscow, a Chinese diplomat dismissed
the recent Soviet proposal on the Sino?Soviet border dispute as "totally unaccept-
able,'' The prt.-pos;r:, which was made earlier this year but has only recently been
surfaced by Moscow, focuses ml the bottler cast of Mongolia and makes some
concessions to the ('bluest-, It dues not, however, meet I'ekirtg's demands that Ibc
entire border question be negotiated as a single package and that any settienlemi
include the transfer of Ilei?hsia-lzu Island to China,
While the Soviets portrayed their latest offer as a serious attempt to break the
deadlock in the talks, Peking undoubtedly sees it primarily as only another Soviet
pressure tactic;. Peking probably reasons that if Moscow really expected a positive
Chinese response to any of its proposals over the past I'm months, the Soviets would
not have made them pubht.. Moreover, the Soviets have coupled pul.?!ic demands that
China reply to their proposals with private statements tb!!! ;hey (Io not intend to
send their chief' negotiator back to Peking until China replies. This is hardly a
conciliatory stance, given Peking's sensitivity to taking any action that would appear
to be a capitulation to Soviet demands.
Balanced against this interpretation are continuing signals that Moscow doe`
indeed want some improvemeat in bilateral relations. I'rarda recently deleted anti-
Chinese portions of' a Suslov speech, and Soviet media treated ('eking kindly in
messages on the occasion of Albanian National Day. But at times some signals carry
a dual message. For example, Moscow took the unusual step of publishing its "thank
you" note to China's Soviet National Day greetings, but the message itself tersely
lectured Peking on the need to respond to Moscow's proposals.
At least one Chinese official has interpreted these conflicting signs as indicating
that there is a faction within the Soviet leadership that favors concessions to China
to improve relations before Peking normalizes ties with Washington. The same
official also said he expects Ilichev to return to Peking soon to resume the border
talks. This is the first time that any Chinese official has advanced such judgments,
and the chance that they will be borne out by events is extremely slight. The Soviet
Politburo is united behind present policy, and no factional dispute is needed to
explain its tactics, The message Moscow is probably projecting is that since 1967,
the Sino-Soviet dispute has operated within certain parameters and that following
the extremely tense situation of the last three months, the Soviets want to go back
to operating within these boundaries. if this is correct, Ilichev or his successor will
be going back to Pekin at s point, but not in the immediate future,
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The Conl'uciiis Csunpnign: Action and Reacthm
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The anti-('d,nfucius campaign is now well oil the ghotand alter its initial boost
by the central media in Peking. Criticism of Confucius is no loa;ger limited to tluw
universities, it is the order of' the day in factories and, as befits a nnajor political
campaign, is the subject of study sessions, Its objectives are still undefined. ;aid this
[)illy have c rased some confusion in the provinces. Some of the current debates over
policy may be an honest attempt by provincial officials to further the goals of the
anti-('onl'ucius drive, but in other cases the dispales may he intended as counter-
measures,
In the first official suggestion that the cant pai:n is aimed at someone in the
national leadershi ), leaders of study session,
to criticize the Confucian theory that 'those in power are men of
wisd oat, and ac milted that the current leadership in Peking still contains "bad
e'emenls" who must be criticized and "eliminated." Participants were warned,
however, not to speculate about who in Peking might be the target. Study session
leaders probably would not have made such statements without Peking's approval.
Nevertheless, their warnings against speculation suggest that the leadership at the top
is divided on this issue and hence is not prepared to approve the open denunciation
of the cmpaign's target. ICJeed, the target may not have been revealed to local
officials.
The campaign, now in its fifth month, has seen its first admission of guilt.
Noted philosopher Fong Yu-Ian published in article on 3 December in which he
attacked Confucius and confessed that lie was once a "Confucius-worshiper." At a
forum in 1902 to mark the anniversary of'the death of ('onfucius, Deng claimed the
sage was "progressive," a notion that contradicts today's assessment that lie was a
reactionary.
The probable target of the anti-Confucius campaign is Mao's wife, Chiang
Chit > and her leftist associates. Yet as the campaign unfolds. some provinces
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pushing a line on policy iss a
known views and to emphasize her achievements.
by name, Just celebrated "revolutionary opera mot , an unusual even c esagnec to
honor her so-called model plays and one obviously contrive(] as a show of sunnort
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to nun he warning in one anti onfucius article that those who lose political
power will "counterattack in the cultural field."
In some respects iworking in tandem to 25X1
promote a revival o let hs educational policies advanced during the Cultural
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local radio
Union had "viciously villified" that political upheaval. Using a statement written
into the new party constitution but shunned by most media, including those in
Peking, Liaoning called for preparations to carry out "more Cult ural Revolutions in
the future," The broadcast claimed the Cultural Revolution "was never really
affected" by Lin Piao's iinc; earlier attacks on Lin seemed to blame him for the
excesses of the Cultur,il Revolution. but Liaoning, at least, would admit to no
intemperance. The broadcast also sniped at the use of material incentives and the
dominance of "experts" in factories.
Last summer Liaoning weighed in heavily on the side of "revolutionary prac-
tices" in a fierce debate over the use of college entrance examinations. The support
of Liaoning party boss and Politburo member Chen IIsi-Ilea may well have been the
decisive factor in tipping the scales against examinations. Chen, who had been under
leftist attack himself' during the Cultural Revolution, may have aligned with the
r,,dicals on the issue in an effort to block the gradual erosion of the military's
political role and to protest the use of the military as a scapegoat in the Lin Piao
affair. Whatever his motives, Chen has shown that a radical-military coalition could
be a potent force that would put the moderates on the defensive. If the anti-
Confucius campaign is indeed aimed at the leftists, Chou hn-lai will most likely take
any steps necessary to prevent his opponents from acquiring widespread military
support. F77 I
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The 1973 Harvest and Crain Imports
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The 1973 harvest of grain in the People's Republic of Chime should be
somewhat better than he hour crop in I97.2; Peking had predicted that the output
would exceed 197I's harvest, but crops have been set hack by typhoons in south
C'himr and by heavy rainfall in the Yangtze and Yellow river valleys.
Improved harvests of coarse grains corn, millet, and kauliang in the northeast
and to a lesser extent in north China should inure than compensate For earlier
shortfalls in wheat and rice output. Coarse grains were hard hit last year when
prolonged rainfall and flooding occurred at the time of havest. Peking has tacitly
admitted that the summer grain harvest. mostly wheat- was not as good as in 1972,
despite a substantial increase in acreage. Peking's claims of a "good harvest of early
rice" were not borne out by reports from the major producing provinces. Growing
conditions for the intermediate and late rice crops - which together account for
about 60 percent of China's annual rice output have been generally favorable in the
eastern Yangtze Valley, but only fair in south China and in Szechwan provinces.
This year's grain harvest will be another disappointment in Peking. Population
has increased by about 40 million since 197 1, while grain output has stagnated. As
in 1972, the positive effects of increased supplies of chemical fertilizers, pesticides,
and water pumps on grain output in 1973 have been offset by poor weather
conditions. Other i rops--cotton, oilseeds, and soybeans --fared even wove than grain
because of both acreage cuts and poor growing conditions.
Peking continues to import grain at a record mace. New contracts have recent)
Planned Chinese impo-r-t-T-5779/4 now star at 67
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C:hhu.,e grain imports in 1974 may increase furl her. The Chinese are reported
to be considering it plan to iu-port from I to 3 million Ions of wheat and corn Into
south China in order to free a simiia r quantity of rice for export. Ilerelol'ore, almost
all Chinese grain Imports have been used to feed urban areas in north China. Except
for small purchases to round out deliverien In the fourth quarter of 1974, Peking has
apparently already contracted Ior sufficient grah- about 8 million tons to satisfy
these needs, If a wheat-far-rice substitution plan is ado ,ted China's grain imports in
1974 could reach 10 million tons.
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Worries About the Middle last
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I'ekiiig is n-unifestint, concern over the effects of (lie Ar.ah oil boycott on the
US, Western Europe, and Japan and over increasing Soviet In11tw1 ce in the Middle
Fast In the wake of' the Arab-Israeli war,
The Chinese press has moved away fron- its original strum, endorse-nent of the
Arabs' use of the "oil weapon." On 15 November, the first comprehensive N('NA
report praised the oil embargo as a resolute, united action which hit at Israel and the
super powers. Noting that the embargo had dealt a heavy blow to the US. N('NA
suggested that the erttbargo might serve as a model for oil-erThird World countries
in achieving their goals, As the effects of (lie embargo on the US, Western Europe,
and Japan became clearer, Chinese reporting on the subject shifted to straigli for-
ward accounts of Arab policy and its economic consequences for other countries.
The press reported the remarks of Algerimi President Bonmedicne and Arab League
Secretary General Iliad at some length, but did not mention Iheir praise of the "oil
weapon" and its impact on the West. A senior Chinese trade official in Western
Europe recently asserted that his government did not agree with the Arabs' handling
of the boycott and had told the Arabs so.
The Middle East war may have proved useful in bolstering the Chinese propa-
ganda Tine against super power "contention and collusion" in the region, but Peking
obviously has perceived that the oil embargo is damaging the economy of the wrong
super power and its friends. This concern over potential damage to the US economy
is coupled with the worrisome thought that it may be Moscow that has gained the
most from the Middle East war.
China is still publicly label;.,g US and Soviet efforts to achieve a settlement as
an attempt to impose a 'solution on the Arabs which would deny them their rigl?s.
Its criticism, however, is in a much lower key than that voiced when the cease-fire
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was arranged. Privately, the Chinese have Indicated that they may now l rel'er a
Middle East set (lenient In order to limit Soviet gains, ('hinwsc leverage in the region
is, of course, limited, but Peking is doing what it can to sow distrust of the USSR
among; the Arabs and to encourage Arch unity as ;: hedge against (tin ' t I er Soviet
encroacluneat In the region,
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Problems in China's Civil Research lush itutiav:4
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C'hina's scientific recovery front the effects of' the ('tiltural Revolution an
upheaval that some sources speculate set research hack 5 yl;ars Is slow, Serious
problems are. still being encountered, largely as a result of shortages of manpower
and equipment. Continuing political conflict within the institutions also ham pets
progress. Moves to re-establish scientific training in the universities have heett
delayed by problems in selecting students. Attennpts to introduce scientific eq uip?
meat, though well supported by growing foreign technical Iradc. relations, have run
into difficulties. The utilization of newly purchased instruments is being slowed by
shortages of qualified technicians. While a great deal of technical data is gathered
abroad, its assimilation in ('mina's laboratories is hindered by inefficient technical
information s~ stems. Many research units are unable to gain the technical data
needed I'or their development programs, partly because of' the over-decentralization
of* research carried on at the provincial level,
Prior to these moves, emphasis on political activity had waned and as a result
mach more research was able to be carried out in China's institutions. A better
balance was struck between basic science and applied science; there were more
contacts with foreign scientists; and the publication of scientific journals was on the
upswing,
ever
The new surge in political conflict, however
spread from the universities to the Academy of Sciences. This campaign is part of a
larger political conflict now being played out throughout China. As part of the
campaign, or perhaps as a reaction against it, the trend toward higher academic
standards and the more pragmatic approach toward scientific research are coming
tinder renewed attack. Although the extent of the anti-Confucius campaign is not
known, it is clear that politics has once again intruded into these areas, threatening,
at least for the -nonment, the gains made in science and education since the r, reat
from Cultural Revolution policies.
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Pe anti-Confucius campaign has
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Fall Canton Fair: Good But Nu "real
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The 1973 fall Canton I air, which ended November 15, may have failed to n-eet
China's high expectations. Total transactions probably reached between $1.4 and
$ 1.5 billion, an Increase over the record 1973 spring fair but perhaps not as large as
the Chinese desired. Attendance was down slightly from the spring I'aiir; at that time
a number of traders were disappointed by the sharp increases in Chinese prices,
Prices at the fair were again high, but generally in line with world market levels.
Traders encountered some shortages of Chinese goods as Peking again rationed
available supplies among the many buyers. In an effort to boost sales, the Chinese
were sympathetic to buyers' requirements on labeling and packaging.
Contracts signed by the Japanese--the second largest contingent.--approached
$300 million, slightly less than the Japanese total at the spring fair. High Chinese
prices contributed to a sharp drop in Japan's purchases of raw silk and soybeans.
Japan's sale of' chemicals 1.11 off' because of' supply shortages, despite Chinese
willingness to buy at high prices. Low Chinese price offers hurt the sale of Japanese
bearings, usually an important item.
US attendance and the level of American business transacted reached new highs
at the fall fair. Almost 250 Americans, representing over 100 firms, purchased more
than $25-million worth of Chinese goods and sold almost $15 million. Major US
purchases included gum rosin, fireworks, and cotton textiles. The largest US sales
were of wood pulp and paper, tallow, and petrochemicals. By inviting Mobil, Exxon,
and several large producers of oil drilling equipment to the fair, the Chinese
demonstrated their continued interest in American equipment and technology.
Caltex, Westinghouse, Baker Trading, and Presser Industries went on to Pekin, after
the fair to continue Is on the sale of plants and equipment.
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China's electronics Industry is broadening Its heretofore predominantly military
output to support industrial ntoderrtizallon and general economic development, The
Chinese news media have been givhtg; considerable coverage recently to the applica-
tion of electronics to industry, especially to silicon-controlled rectifiers to control
(lie power input to electric steelmaking furnaces, automated production equipment
such as electroplating machines and knitting machines, and program control I'or
autumnal mug production in textile, machine-building, and chemical industries,
In seeking ways to increase productivity, Peking is well aware of the important
role that the electronics industry can play. One reason the rate of increase in
industrial output declined in 1972 was the gradual exhaustion of opportunities for
inexpensive Increases in production through fuller use of existing capital, simple
technical innovation, and a large supply of manpower.
In addition to contributing to industrial modernization, the electronics in-
dustry is providing substantial support to a major program now in progress to create
a modern broadband national telecommunication system. The system requires large
quantities of carrier mutiplexing equipment, repeater stations, and automatic switch.
ing equipment, The electronics industry is also expanding the producti Pn of con-
sumer items, such as radios and TV sets, that can be used for indoctrinating and
entertaining the population.
In the US and other advanced countries, products for industrial and consumer
use account for a large portion of the resources and output of the electronics
industry. China's limited electronics capabilities have been traditionally concen-
trated on building tap production of military end items, notably early warning
radars, nuclear instrumentation, and naval and aviation equipment. To proceed with
the production of nonmilitary electronics on a substantial scale will require a shift in
the pattern of'resuurce allocation within the electronics industry.
The Chinese (lid not begin to emphasize the production of' industrial electronics
until about 1971. They will therefore have: to acquire much of the associated
production equipment and technology from .abroad. Among the major items on the
Chinese international shopping list are electronic equipment for industrial automa-
tion and its associated appli, ation technology, including such items as process
control computers, electronic precision measuring and testing et ui rent , areas in
which the US is pre-eminent.
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I)Iplomatlc:111(1 PolfNeal Notes
Kweichow
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The appointment of'a new number two imam has been announced in Kweichow,
hilt the top spot apparently remains unfilled. At the provincial women's congress on
30 November, former Anhwei party boss I.i 1'ao-hua led the turnout, hoI was
identified only as second secretary of' the provincial party committee and vice
chnirtmin of the revolutionary committee. Li, who was rehabilitated at the 10th
Party Congress amt then sent to Kweichow, was a leading candidate for the top
party position. The other known contender is Lit Jui-tin, (lie Yunnan military man
who was heading Kweichow turnouts last April. but he has not appeared publicly in
the province since Li arrived. Lit was last noted at the IOth Part;, Congress- in Pekin t
when he was elected a full member of the ('erntmal Committee.
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Different Priorities in Hanoi and Peking
Chinese and North Vietnamese press treatment of' Defence Secretary Sehles-
inger's recent news conference highlights the divergent interests of' the two Countries
in South Vietnam. ('eking concentrated on Schlesinger's remarks regarding the
relative strength of US and USSR strategic weapons and made no mention of'
Vietnam. Ilanoi, by contrast, confined its comments to sharp Attacks on Schles-
inger's suggestion that Washington might consider renewed bombing should the
Communists mount an offensive in the South. The Chinese clearly feel that the
encouragement of American efforts to counterbalance Soviet power is more impor-
tant to them than joining Ilanoi in warning against US intervention in Vietnam.
Indeed, the absence of any comment on Viet mini in the Chinese press may suggest
that ('eking is private) advising Ilanoi not to provoke Washington.
The Chinese delegation visiting Communist-controlled Areas of Laos Last week
apparently was merely repaying visits to Peking made early this year by senior
Pathet Lao officials. The Chinese went to some length to indicate that the visit
implied no change in their support for a coalition government in Vientiane or in
Peking's intention to deal on a state level with such a government when it is
installed. Peking chose a senior official of no national stature to head the delegation.
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Perhaps in stress the local nature of the excltnnge, the ol'lirtal c;inte roll) Yunnut
Province, which borders on Communist-controlled l,aos, Roth lie attcl the next
ranking member are relatively obscure mmithers of the haily central committee,
equal in rank, it' not in iiower, to the most recent 1'athet Lao visilor to ('hint, While
In Laos, the Chinese delegation continually indicated) that they re pre, t the
Chinese "people" rather thaii the government,
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23 Nov-2 Dec Chinese trade delel!alion visits Philippines, sees I'residew Marcos.
No trade agreement signed.
26 Nov Military delegation froth A'!laaIa arrives in Peking
28 Nov Visiting Japanese trade delegation received Chou Ian-lai and
30 Nov China and North Vietnam sign agreement on scientific coopera-
absent since 7 November, appear together with Chou tin-tai.
lion.
3 Dee Iloklen Roberto, ('resident of the Angolan National Liberation
front, arrives in Peking.
7 Dec Chiang Ching, absent since 30 September, and Wang Ilung-wen,
7 Dec King and Queen of Nepal begin friendship visit to China.
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