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December 19, 2016
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November 30, 2001
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September 30, 1971
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011C/ .. / '/\ ~AVpf?ved 7pp,R7leas e 2p95106/09: CA- 85Tp~~75R00080001A0322- Secret 4lI ~ rro Treign Dhrem DIRECTORATE OF INTELLIGENCE Central In tellz~en ce Bulletin Slate, DIA declassification & release instructions on file Secret Ne 545 Approved For Release 2005/06/09: CIA-RDP85T00875R000800010O Vtember 1971 Approved For Release 2005/06/09 ? CIA-RDP85T00875R000800010032-4 Secret 'I'lle (;h;N'l'N.A 1, /N'I'h;IJ,I(:h;N(:I? I{ULLI 'I lilt is produces) by the Director of Central Intellitcrtce to nuucl his responsibilities for providing cnrrcnt iulelligencc bearing on Issues of national security to (Its I'residenl, the National Security Council, ;ltd olhcr senior f;otrrnnwnt officials. It, is produced ill consultation with the I)cp;u'lricnts of Slate and Uclcnse. \Vllcrt, becaltse of (Its lime factor, aclcvluate consultation ?xith the clcpart- tnenl of prinnvy concern is not feasible, ilen1s or portions lltcrcof ;it.(. pro- docecl by CIA and enclosed in brackets. Interpretations of intelligence infornuttiotl in this Inlitlic;;lion represent immediate and hrclintillary Views which an, snbjcct to modification ?n the light of further information and Ita1re cootplete analysis. C:crtain inlclligellcc items ill this Imhlicatioll 1111W be designated specifically for Ito Inrlher clissclnimtlioll. Other intelligrnco items Inay be dissenninaled fnrlher, but only )It a need-to-know basis. WARNING This cloctIntent contains infornutlion affecting the national defense of the United States, within the nccalling of 'h'ide 18, sections 793 and 791, of, tine US Code, as amended. Its trall lnissiou or l-evc atioll of, its contents to or rc- ccipt by all tlnattthorized person is probibited by late. GROUP 1 Excluded from automalie downgrading and declassification Approved For Release 2005/06/0S IrkP85TO0875RO00800010032-4 Approved For Release 2005/06/09 : CIA-RDP85T00875R000800010032-4 SI CRF'1.' No. 0234/71 30 September 1971 Central Intellzgence Bulletin COMMUNIST CHINA: Political situation apparently is still far from being resolved. (Page 1) USSR-INDIA: Prime Minister Gandhi's visit to Moscow. (Page 3 CHILE: Allende ready to risk showdown over compen- sation for expropriated copper companies. (Page 5) CEYLON: Insurgency may be renewed. (Page 8) 25X6 INDIA: Government loses Italian firm's bid to move plant to India (Page 10) ITALY: Government tactics on price freeze (Page 10) 25X1 C Approved For Release 2005/06/09 : CIA-RDP85T00875R000800010032-4 SECRET Approved For Release 2005/06/09 : CIA-RDP85T00875R000800010032-4 IS11;(,J COMMUN:I:S'.l' CMINA: 'i'he eievenLh-hour decision to cancel this ' - eveningrs National Day banquet suggests that the current political situation is still far from being resolved. According to press reports, a Ministry of For- eign Affairs spokesman announced that the banquet, which usually features a speech by Premier Chou En- lai and is well attended by the ruling politburo members based in Peking, will be replaced by a one- and-a-half hour reception sponsored by the Foreign Ministry. The spokesman reportedly was unable to affirm that Chou would speak at the reception; but even if he does speak, it seems clear that Peking may be departing from previous practice in order to rationalize what, may be only a limited turnout of top leaders. Since the banquet has not been at- tended by either Mao Tse-tung or Defense Minister Lin Piao for some years, Peking may be seeking to conceal recent significant changes in the politburo below the level ci Mao, Lin, and Chou. Try impression that the prolonged power struggle between moderate and radical forces on the politburo has produced further breaks within the leadership has been reinforced by Jack Chen, a regime publicist in Hong Kong who recently circulated Peking's offi- cial version of the current campaign against the extremist "May 16 Corps." According to the US con- sulate general, Chen is advising Western journalists to focus on the possibility of leadership changes as the cause for the unusual developments in China rather than speculating on the death of Mao. Al- though Chen's knowledge of current developments in Peking is unconfirmed, his remarks, taken with the continued public absence of several ranking military leaders, an accumulation of rumors regarding inter- necine quarreling at the top, and the cancellation of tonight's banquet, all suggest that the power struggle in Peking has entered a new and more seri- ous phase which probably centers on the political futures of China's top-ranking military leaders. (continued) 30 Sep 71 Central Intelligence Bulletin Approved For Release 2005/pfL0, ?I RDP85T00875R000800010032-4 Whether this struggle has been precipitated by the illness or sharp decline in the health or polit- ical strength of Mao or heir-designate Lin Piao is Approved For Release 2005/06/09 : CIA-RDP85T00875R000800010032-4 SECRET 25X1 C 25X1 C Preparations are going forward foi low-key Na- tional Day celebrations in Peking tomorrow. Since mid-September, the Soviet press has been cautious and noncommittal in treating internal af- fairs in China. A brief TASS item on 25 September indirectly refuted speculation that events in Peking are somehow related to Sino-Soviet tensions. At a public lecture in Moscow on 28 September, the Soviet speaker conveyed the impression that the position of the extremists in Peking has been weakened. (SECRET) 30 Sep 71 Centrel Intelligence Bulletin Approved For Release 2005/06/ (C~JA,P85T00875R000800010032-4 Approved For Release 2005/06/09 : "(MF1 T00875R000800010032-4 USSR-INDIA: Prime Minister Gandhi's visit to the USSR seems to have been fairly successful. She was accorded the unusual honor of being housed in the Kremlin and of having the top three Soviet leaders take part in the discussions. There is still no conclusive explanation for the unusual activity that surrounded the beginning of her visit or for the inclusion of Brezhnev and Podgorny in talks that were originally to have involved only Kosygin. It may be that the Soviet leaders wanted to present a united front to Mrs. Gandhi in order to underscore their message on the need for re- straint. The main topic of discussion during the visit was clearly the unsettled situation on the subcon- tinent. As Kosygin's luncheon speech and the final communique indicate, the Soviets, although taking the Indian side, clearly have not abandoned their policy of trying to prevent another Indo-Pakistani war. Kosygin, for example, was quite harsh in his criticism of West Pakistan's actions in the East wing and placed most of the onus for easing the ref- ugee problem on West Pakistan. He was equally firm, however, in his opposition to another Indo-Pakistani war, maintaining that the USSR would do its utmost to prevent another conflict. Mrs. Gandhi, for her part, took a somewhat different tack. She reiterated India's opposition to war as a means of resolving the refugee problem and pleaded for concerted international assistance to help India cope with the influx. She went on, however, to express the hope that Soviet efforts to encourage the Pakistanis to work for a political solution would bear fruit and reminded her audience that "peace cannot be obtained by waiting and hoping." In the communique the Indians joined with Mos- cow in "demanding" that the West Pakistanis take "urgent measures to reach a political solution" to 30 Sep 71 Central Intelligence Bulletin 3 Approved For Release 2005/06/09, ff" $5T00875R000800010032-4 Approved For Release 2005/06/09 : CIAA-RDP85T00875R000800010032-4 SECRET their problem with East Bengal. The language is virtually identical with the appeal to Yahya made by Soviet President Podgorny last April, however, and consequently cannot have been especially en- couraging to the Indians. The Indians also agreed that all problems at issue in relations between countries should be settled by "peaceful means." Both parties agreed to further exchanges of views on the East Bengal problem. Another important topic on the agenda doubtless was China. Just prior to Mrs. Gandhi's visit to the USSR, Moscow sent a special envoy to New Delhi to discuss future Soviet and Indian strategy at the UN. Moscow is particularly interested in securing India's cooperation against China should Peking gain admit- tance to the UN and in getting a better reading of recent Indian moves to improve Sino-Indian relations. The communique indicates that the two sides also discussed Indian Ocec.n matters. The Soviets agreed with the Indians to study the question of declaring the Indian Ocean "a zone of peace." The two sides also agreed to establish a joint commis- sion for economic, scientific, and technical coopera- tion. Both Brezhnev and Kosygin accepted Mrs. Gandhi's invitation to visit India, but no date was fixed. (CONFIDENTIAL) 30 Sep 71 Central Intelligence Bulletin Approved For Release 2005/06/09~~QP..5T00875R000800010032-4 g5.T00875R000800010032-4 Approved For Release 2005/06/09 x tt" CHILE: President Allende's very hard stand on expropriated Kennecott and Anaconda copper operations in Chile indicates that he is prepared to risk a showdown with the US Government over compensation. Allende's charge on 28 September that the com- panies owe Chile $774 million in "excessive profits" ensures a substantial negative indemnification bal- ance when added to his government's excessive claim of about $1 billion already made against the compa- nies for alleged equipment deficiencies and mine damage., The companies' remaining 49-percent inter- est in their extensive Chilean copper operations was taken over in July under a constitutional reform, but Allende's promise to negotiate compensation has not been kept. The final reckoning will be announced on 15 October when the Chilean controller general, nomi- nally a political independent, reveals his calcula- tion of the net worth of the companies' Chilean holdings. The announced claims will leave a nega- tive balance that would more than cancel debts still due the companies for the purchase of their first 51-percent interest during the Fr--' _? 1,linistration. Such a balance could also be used by Ail`nde to justify reneging on his promise that Chile would honor foreign debts incurred by the companies in extensive copper production expansion programs only recently completed. Finally, it could trigger claims for extensive insurance the companies hold with the Overseas Private Investment Corporation. The Cerro Corporation probably will receive compensation for its mine that started producing a few months ago, as a gesture to indicate to poten- tial sources of international credits that the Al- lende government is reasonable and selective in its dealings with investors. The $56-million compensa- tion--already negotiated but not signed--would be a small price for Chile to pay for Cerro's agreement to serve as purchasing agent for equiprent necessary to maintain the larger companies' expropriated prop- erties. (continued) 30 Sep 71 Central Intelligence Bulletin Approved For Release 2005/06/OR h~F"85T00875R000800010032-4 Approved For Release 2005/06/09 : CIA-RDP85T00875R000800010032-4 SECRET Allende has successfully nurtured substdntial international cordiality toward his government as a "worthy socialist experiment," although this has not brought Chile the credits so desperately needed to bail it out of increasing economic difficulties. Allende apparently has decided that a h