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August 4, 1975
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Approved For Release. 2008/11/13 . CIA-RDP86TOO608ROO03000E Approved For Release 2008/11/13: ~ CIA-RDP86TOO608ROO03000E State Dept. review completed Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 25X1 Secret ALL IGF; Chinese Affairs Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 This publication is prepared for regional specialists in the Washington com- munity by the East Asia - Pacific Division, Office of Current Intelligence, with occasional contributions from other offices within the Directorate of Intelligence and from the Directorate of Science and Technology. Comments and queries are welcome. They should be directed to the authors of the individual articles. CONTENTS August 4, 1975 Chou' s Master Plan . . . . . . . . . . . . . . . . 1 Sino - Latin American Relations: A Mini-Prospectus . . . . . . . . . . . . . . . 3 China: New Solutions for Old Problems. . . . . . 7 China: Oil Pipeline Construction Generates Demand for Telecommunications Equipment . . . . 9 Testing Taiwan . . . . . . . . . . . . . . . . . . 10 Enrollment 1975: Stalemate 12 New Pipeline Links Peking to Ta-ching Oil Fields. . 15 Playing the Angolan Sweepstakes . . . . .. . . . 16 Yao Wen-yuan: Singing the Right Tune. 18 CHRONOLOGY . . . . . . . . . . . . . . . . . . . . 20 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 In contrast to the political infighting that preoccupied China's leaders last year, they have turned their attention this year to economic affairs. Most of the directives issued by the party this year deal. with problems in the economic sector stemming from political disruptions. Peking seems intent on resolving political problems privately, while pushing publicly for programs that will bene- fit the economy. The prime mover behind this new emphasis on eco- nomic development appeal:s to be Premier Chou En-lai. Even if Chou may be overly optimistic about long- range economic prospects, it is significant that the aging Premier is actively involved in planning for a future that he will not live to see. China is currently on the last leg of a five- year economic plan that will end this year and is reportedly drawing up a plan, to begin in 1976, de- signed to bring China into the front ranks of the industrialized nations by the end of the century. Chou En-lai announced this goal himself in his speech to the Natonal People's Congress in January and in- dicated that the State Council would be drafting long-range plans aimed at this goal. Hong Kong communist bankers who visited China recently reportedly received a briefing by Chou on the contents of what they called the "Premier's 25- year master plan." The bankers had the definite im- pression that Chou was in overall charge of the plan, indicating the extent to which the hospitalized Pre- mier remains involved in major policy questions. The day-to-day work undoubtedly is being directed by Vice Premier Li Hsien-nien, China's leading economic spe- cialist and a close associate of Chou's, and by chief economic planner Yu Chiu-li, also a Chou protege. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Chou reportedly said that the initial ten-year phase of the plan will emphasize the development of transportation facilities and heavy industry, espe- cially the petroleum industry. In addition, the Premier claimed that China had drawn up a new plan for education. The latter point is consistent with Chou's comment in January that the current educa- tional system is not adequate to meet China's future economic needs and is a tacit admission that Mao's radical reform of education, initiated during the Cultural Revolution, has been a failure and needs to be drastically revamped. The Premier admitted that the f4.rst phase of the plan will not result in a significant improvement in living standards but reportedly claimed that the second phase, beginning in 1986, will bring living standards up to these of modern industrialized na- tions by the year 2000. The second phase is to focus on technical and scientific developm nt that will leave China "second to none" in these fields. Ironically, the plan, if successful, would make China a superpower, a goal the Chinese have con- sistently eschewed-,-at least in public. In any event, China could no longer ..lake a credible claim that it belongs to the Third World. The success of the plan, of course, depends on several factors. China will have to achieve and maintain over a quarter of a century a greater degree of political stability, from Peking down to the grass roots, than it has had in the past decade. Economic factors, many of which are beyond China's control, can also intervene. The weather, as usual, will af- fect agriculture, which remains the basis of the economy. Changes in the world economic situation are likely to have a greater impact on the economy, now that China is more deeply involved in international trade. Moreover, the contentious and still unresolved issues of wages and incentive programs could have a critical affect on worker morale ana nrnc1nri-ivity. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Sino - Latin Amerd,can Relations: A Mini-Prospectus 25X1 The Panamanian National Assembly's call last week for closer relations with the communist bloc and the signing of a Sino-Ecuadorean trade agree- ment in early July strengthen the possibility that Peking will establish full diplomatic relations with these two countries in the near future. When it occurs, the exchange of ambassadors will be an- other milestone in Peking's drive for respectability in Latin America that began when the Chinese emerged from the Cultural Revolution and returned to fields of diplomacy in 1969. At that time, only Cuba had formal ties with Peking; the rest of the hemisphere was a Nationalist Chinese stronghold. China now has relations with ten Latin American countries--includ- ing all of the regional heavyweights--and when Panama and Ecuador enter the fold, Peking will have achieved numerical parity with Taiwan. The diplomatic ledger is only a small part of the story. On the economic front, Sino - Latin American trade was negligible before 1969; preliminary esti- mates indicate that it passed the $500 million mark last year. Chile has become an important source of natural fertilizers and copper, and the Chinese have imported substantial amounts of alumina and bauxite from Jamaica and Guyana. Brazil has sold iron ore and a wide variety of agricultural products to the Chinese, and Argentina has secured sizable grain con- tracts during years when China's own harvest was poor. As this suggests, the balance of trade has been heavily in Latin America's favor, but Peking has made some progress recently in expanding sales of Chinese machinery and textiles in the Latin market. On the political front, China's emphasis on good nation-to-nation relations has in large part August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 succeeded in overcoming distrust and suspicion created by Peking's earlier ideological and material support for Latin American revolutionary groups. Now the Chinese enjoy a measure of influence commensurate with their limited interests in the area. On a broader plane, the movement of Latin American coun- tries into the mainstream of the Third World has served the interests of China--the Third World's self-proclaimed spokesman--in expanding its prestige and influence as a world power. Peking has done its part to facilitate the process by stressing the com- munity of interests between Latin America and the rest of the Third World--particularly the need for Latin countri s to unite with Asia and Africa to re- sist dominatioi by the US and USSR. As Latin Amer- ica's special ties with the US have loosened, Chi- nese warnings of the dangers posed by the Soviets have become accordingly more strident. More Relaxed Diplomacy With the modest objectives of its Latin American policy largely achieved, China's future efforts to woo hold-out Latin American countries will probably be conducted at a much more relaxed pace. Peking is not likely to expend much effort in Central America--- still a Nationalist Chinese stronghold--after rela- tions with Panama are established. Peking appears to view the area as a US preserve and may believe that the republics will, of their own accord, seek ties as Sino-US relations develop further. In the meantime, the Chinese probably feel that the investment that woulc; be necessary to win over the conservative Cen- tral American regimes quickly would not be worth the return either politically or economically. Similar factors; should weigh against any significant Chinese diplomatic initiatives toward Caribbean nations such as the Dominican Republic and Haiti. Peking will, however, continue to include these countries in its Third World rhetoric--especially in regard to re- gional economic cooperation--and can be expected to continue dabbling in trade with them through indirect channels. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 After relations with Ecuador and Panama are consummated, Colombia and Bolivia are the next most likely candidates for Chinese diplomatic attention. The Chinese have, in fact, already been preparing the ground in Bogota and La Paz with unofficial delegations. The Colombians, for their part, are caught between their long-standing ties with Taiwan and a desire to pay more than lip service to their concept of "ideological pluralism" in foreign affairs with the result that Bogota has blown hot and cold on the question of an opening toward Peking. The es- tablishment of formal links between Peking and Panama --which has close ties with and considerable influ- ence in Bogota--could decide the matter. La Paz also appears to value its relations with Taiwan. Com- petition with Peking in world metal markets--China and Bolivia are major producers of tin, tungsten, and antimony--has, however, provided some impetus in Bo- livia for the creation of a formal channel with China to coordinate metal strategy. Given the relatively small political and economic returns for China, Pe- king's courtship of both countries will probably re- main low key. Pragmatism at Work With the Latin American diplomatic horizon rela- tively bare, Peking can be expected to place emphasis on improving those existing relations it considers most important. Trinidad and Tobago, Venezuela, and Mexico will figure high because of their status as oil producers. During a tour of the three countries this spring, the Chinese vice minister of fuel and chemical industries made no secret of China's need for technical assistance in exploiting her own oil po- tential. The high ranking visit itself was testimony of Peking's recognition of the three countries' grow- ing political clout in the region. The Chinese will also probably try to build goodwill in Brazil because of its importance as a trading partner and because the August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 powerful Brazilian military establishment is still not completely sold on the new Sino-Brazilian ties. Peking's extension of an $11 million loan to Guyana this spring helped soothe irritations caused by misunderstandings over existing Chinese aid and trade agreements. The additional investment is likely to make Peking work harder to keep relations on an even keel in Georgetown. Tn contrast, the Chinese will clearly maintain a low profile in their dealings with Argentina, Chile, and Peru. Peking has not contracted for any sizable grain shipments from Buenos Aires this year, but access to Argentine grain markets is still im- portant as a hedge against future domestic shortfalls. At the same time, however, Peking's Latin American watchers probably concluded long ago that the Peron government's days were numbered. As a result Chi- nese diplomats in Argentina will probably be or- dered to keep their heads down so as not to jeop- ardize their standing with--and future grain purchases from--a successor government. The situation is even more delicate in regard to the mutually antagonistic military regimes in Chile and Peru. Peking has few economic stakes in Lima but a strong interest in monitoring the Soviet military assistance program and the progress of the military-directed "social revolution." China's ties with the junta in Santiago, on the other hand, az:e a political liability, and the junta's continuing u.,Lofficial contacts with Taiwan are undoubtedly a source of heartburn in Peking. Chilean natural fer- tilizers and copper, however; remain important to the Chinese economy. With these conflicting interests, Peking has carefully avoided being drawn into the dis- pute between the two countries, a fact evidenced by Chinese failure to respond to requests for military 25X1 assistance from both Santiago and Lima. This balanc- ing act will almost certainly continue. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 China: Now Solutions for Old Problems Peking recently changed tactics in its attempt to solve the persistent factional problems in Che- kiang. Recent events indicate that the new strategy includes a leadership reshuffle and the use of troops to restore order in a number of I-Iangchou factories. Although Tan Chi-lung, who assumed he post of first party secretary in 1974, remains in power, many new faces have appeared in both the military structure and the lower and middle echelons of the party and revolutionary committees. Of the fourteen officials identified at the recent provincial meet- ing, seven are newcomers to the Chekiang scene. Sev- eral leaders including Chang Wen-pi, a new party sec- retary and the military district commander, and the new first and second secretaries of the Hangchou mu- nicipal party come from other provinces. The need to bring in outsiders to ensure order and the implementation of central instructions stems from the continuation of Cultural Revolutionary ri- valries within the leadership at all levels. The purge of Nan Ping, the first secretary from 1968 to 1972, for suspected involvement in the Lin Piao plot only increased the problems for his successor Tan Chi-lung--Nan was the first political commissar of the Chekiang-based Twentieth Army, segments of which remained loyal to him after his purge. It appears that earlier this year the troublemaking Twentieth Army was removed from Chekiang and replaced by ele- ments of the Twelfth Army from Anhwei. The new military district commander, Chang Wen-pi, has had a long association with the Twelfth Army. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 In the past, the central leadership has called Tan to Peking for consultations, issued directives concerning problems in Chekiang, ordered the disband- meizi: of militia units and sent Wang Hung-wen to Che- kiang. Now, however, Peking seems prepared to go a step further and use force in order to back up Tan's recent demands for an end to factionalism and im- plementation of central instructions. In a move reminiscent of the Cultural Revolu- tion, PLA troops have been dispatched to various factories in Hangchou to restore order. While the troops are ostensibly going to the factories to en- gage in production, the factional disputes and the resultant disruptions in production are apparently so serious that Peking is willing to use troops de- spite its attempts to remove the army from positions of power gained in the aftermath of the Cultural Rev- olution. An earlier broadcast ascribed past lapses in production at one Hangchou factory to bourgeois factionalism and sabotage by class enemies. The dates of dispatch of the troops, July 19 and July 22, coupled with the announcement that those PLA figures involved in the decision to use troops were received by Chairman Mao, suggest that the Chekiang problem may have been a topic of dis- cussion at the recent high-level meeting in Peking. Whether this new plan can solve the long-stand- ing factional disputes in Chekiang remains to be seen. The formula chosen by Peking, the use of out- siders and troops, is one which has been avoided in the past several years. Outsiders have tradition- ally had a more difficult time dealing with provin- cial problems; Tan Chi-lung, who was originally from Shantung, has not had much success in Chekiang. Per- haps now with th b e acking of the Twelfth Army, Tan and his new associates will be able to bring faction- alism i g under control. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 j Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 China: Oil Pipeline Construction Generates Demand for Telecommunications Equipment 25X1 China's surge in oil pipeline construction has generated a sizable demand for associated telecommu- nications equipment. The Chinese are in the market for modern data transmission equipment to monitor and control oil flow along their newly constructed pipeline networks. The cost of this equipment could total several million dollars. Potential suppliers include a US-affiliated manufacturer as well as British, Japanese, Italian, and Hungarian firms. Peking has asked Bell Tele- phone of Antwerp, an ITT affiliate, to submit bids on data transmission systems next year. When asked about distances envisaged for the system, a Chinese trade official indicated that it would be from 50 to 2,000 kilometers. Since the current total re- quirements are nearly 6,000 kilometers, China's in- terest in the Bell equipment may signal the opening of a new and continuing market for American technology. The Chinese reportedly are also negotiating with Budavox, a hungarian producer of data transmission equipment. Budavox representatives are anxious to get a foothold in the Chinese oil pipeline communications market, and there is tenuous evidence that a contract for some 13 microwave radio relay stations may have been signed. Thirteen stations would span roughly 650 kilometers of pipeline. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Testing Taiwan :.?n-a Chinese have reacted swiftly to widespread but unsubstantiated rumors that Chinese Nationalist Premier Chiang Ching-kuo recently toyed with the idea of making a deal with Moscow. The rumors, circulated primarily in Hong Kong and Japan, suggested that Soviet front man Victor Louis was in Taipei recently for talks with Chiang and other Nationalist leaders. In fact, there is no firm evidence that Louis--or any other Soviet representative--ha; had contact recently with the Nationalists. Moreover, it is difficult to see how a flirtation with Taipei would work to Moscow's ad- vantage at this time. The Soviets recognize that a deal with Taipei would greatly complicate efforts to restore normal relations with Peking in the post- Mao period. A second rumor suggested that high-level offi- cials on Taiwan were meeting in late July to con- sider establishing trade relations with the USSR. The story is far-fetched. On several occasions since the death of former President Chiang Kai-shek last April, Premier Chiang has stressed that there will be no negotiations or relations of any kind with the Soviets, and has argued that "self-reliance" is the key to the Nationalists' survival. Although Taipei s not seriously interested in a mov' toward Moscow now--a step that would only damage the more importaiit interest of maintaining friendly ties with the US--Nationalist officials certainly recognize Peking's extreme sensitivities on this matter and are probably persuaded that occa- sional "leaks" of alleged contacts are useful as ir- ritants in Peking. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 The PRC-owned press in Hong Kong, undoubtedly reflecting Peking's views, seized on these rumors to attack Nationalist officials who consider "enter- ing hell and embracing the devil." The press was especially critical of Premier Chiang and former For- eign Minister Chou Shu-kai, whom it described as the "architect" of Taipei's pro-Soviet policy. There have been other recent indications of Pe- king's concern over Premier Chiang's long-term inten- tions toward the USSR. In a conversation late last month with a US official, Hong Kong Ta Kung Pao edi- tor Fei I-min insisted that Premier Chiang was capa- ble of coming to terms with Moscow, although he specu- lated that it would not occur until after the US and China exchanged embar;ies. Chinese unhappiness over the failure of their efforts over the past six months to develop a dia- logue with the Nationalists contributes to Peking's sensitivities on the possibility of a Moscow-Taipei deal. China's reaction to Taipei's failure to accept any of the "war criminals" whom Peking released in April is a case in point. Peking clearly hoped that Taipei would accept the releasees and that there would be resulting pressures for some form of main- land-Taiwan contacts. The Nationalists' adamant re- fusal to accept the "war criminals" is a clear signal that they are not prepared for contact with Peking. In his conversation with the US official, Fei I-min was so emphatic about the need for contacts to begin soon that he appeared to be asking the US to encourage Taipei in this direction. Fei also di- rectly connected thi iesire with concern over the Soviets by arguing that, so long as Taipei does not try the Soviet option, there would be no problem working out the details of mainland-Taiwan talks. Fei implied that Peking had exhausted its initiative on this subject and that the next step was un to *hA August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 n.irollment 1975o Stal mate The recruitment of university students for the academic year that begins this fall has been under way since mid-July. Admissions standards generally do not appear to differ significantly from those that have been in effect for the last few years. A few provinces apparently require that uni- versity candidates have a senior high school educa- tion, rather than the junior high school level that has been acceptable since 1972, but it is not cer- tain that this is a nationwide phenomenon. e uca Iona level for enter- ing students is senior high school, and a broadcast from Anhwei said students must have a background above that of junior high school. Universities in Kweichow reportedly will accept junior high school graduates only if they have continued their education on their own, presumably through the correspondence courses now offered by a growing number of universi- ties for educated young people working in factories or on farms. Most other provinces publicly refer to the need to ensure that candidates meet the required academic standards, but they do not specify what the standards are c what steps will be taken to verify the appli- cants' scholastic background. The broadcasts say only that the educational level of candidates must be evaluated or investigated, but only Kweichow has publicly admitted to using entrance examinations. Both oral and written examinations reportedly are be- ing given in Kwangtung as well. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 25X1 25X1 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 The examination issue, which became a major political controversy in 1973, apparently remains sensitive. Ilupei Province, in a recent broadcast, attacked what it called an overemphasis on academic qualifications during the 1973 enrollment,. The newest wrinkle in this year's enrollment process is the open admission that the "Chaoyang model," an agricultural college that relocated to the countryside, does not apply to all universities. The rationale for the model is that agricultural students must return to the countryside after gradu- ation, a process called "from the commune to the Commune." The provincial media make it clear that this program applies to all graduates of agricultural colleges, to some graduates of medical, forestry. and teachers colleges, but not to universities that emphasize science and technology. The latter will implement this program only on a limited, experi- mental basis, suggesting that graduates of such uni- versities can be expected to work in scientific areas after graduation and will not be required to return to the farms. Nevertheless, all universities will have to accept some "from the commune to the commune" stu- dents. These students will receive vocational train- ing, however, while the other students will pursue "regular" academic courses. Consecquently, the "track system," whereby even the best universities must ac- cept some clearly unqualified students, remains in effect. This system imposes a burden on the universi- ties, which must devote some of their resources to training semi-literate workers and peasants, and has hampered the efforts of the universities to raise their academic standards. Moreover, the "from the August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 25X1 commune to the commune" students take up places in the bettor universities that could be awarded to well-qualified young people more likely to play an important role in China's future. On a more hopeful note, there are signs that a few provinces have returned to the recruitment system used in 1972, whereby the universities or provincial officials responsible for education sent recruitment teams to the rural areas on a talent hunt for qualified students. The system was dropped after 1972, and the universities, which make the final selection of students, had to choose from a list of candidates who had applied themselves, Gaon the approval of their work units, and had the bless- ing of the local and provincial party organizations. With some provinces sending out enrollment teams, which presumably will encourage better qualified students to apply, the universities may have a better list of students to choose from. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 New Pipeline Links Peking to Ta-china Oil Fields export and to domestic refineries. shouldered the burden of moving crude to ports for worked railway system, which until recently had of crude. It will also take pressure off the over- NCNA reports that Peking has been linked by pipeline with the large Ta-ching oil field, 1,000 miles to the northeast. The pipeline will assure the Peking area of a reliable, high-volume supply A Wall Street Journal article of July 7 re- ported the Chinese claim that they can ship out 210,000 barrels (30,000 tons) of crude per day from the Ta-ching fields. If true, such a movement would take nearly 10 percent of China's total tank car fleet and would monopolize the rail system in the northeast. The new pipeline will relieve the taut transport situation in this area. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Playing the Angolan Sweepstakes For some time the Chinese have had the uneasy feeling that they were betting on the wrong horse in Angola, and the recent fighting there has done little to assuage these fears. The Soviet-backed Popular Movement for the Liberation of Angola has acquitted itself well on the battlefield at the expense of the National Front, which has received the bulk of Chinese material aid over the past year and a half. The fast-changing situation in Angola led Pe- king to toy briefly with a vitalization of its con- tacts with the Popular Movement. In June, for the first time in almost two years, a Popular Movement delegation visited Peking. The Chinese told the group that it planned to reduce its aid to the Na- tional Front and pursue a more balanced policy to- ward the two contending organizations. Peking may have hoped to wean the Popular Movement from depen- dence on the Soviets, but this hope almost certainly has been dashed by developments during the past month. In any event, reception of the Popular Movement delegation has brought the Chinese very little politi- cal mileage, especially since the Soviet Union con- tinues to furnish generous amounts of armaments cru- cial to the current fighting. The Popular Movement's sympathies for Moscow were evident during the talkc unces of opinion regarding the "international situa- tion" (read, Soviet Union)., Moreover, Peking has clearly not decided to abandon the National Front. This group still repre- sents China's best chance for a voice in Angolan af- fairs after independence in November. Last month-- after being pushed out of Luanda--a delegation from the discussions were "very hard" because of differ- in Peking in June. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 25X1 the National Front visited Peking and was promised an unknown quantity of arms. Zaire subsequently turned over to the National Front a quantity of weapons, after receiving r,;isurances that Peking would replace the equipment. It may well have been these arms that enabled the National Front to launch its recent counteroffensive. Peking probably hopes that such aid, if it will. not bring victory, may en- sure the National Front a role in the post-indepen- dence government. Peking's approach to the Popular Movement may have stemmed in part from a shared view with Zairian President Mobutu that continued military support for Angola's liberation groups escalated the risk of civil war. With the new outbreak of fighting, Mo- butu's position appears to be changing. Given this fact, and continued Soviet support for the Popular Movement, Peking may now feel that it has no alter- native but to continue support to the National, Front. In any event, one of the main reasons Peking switched its support from the Popular Movement to the National Front in late 1973 was to curry favor with Mobutu. Ideally, at this point the Chinese would like to see an effective cease-fire in Angola. Peking pushed for an end to the fighting in the talks with Popular Movement representatives, and the short-lived cease-fire arranged at the end of June was accorded favorable treatment by NCNA. Clearly, the Chinese see brighter prospects for the National Front at the bargaining table than on the battlefield. Like most other observers, however, Peking is not optimistic about chances for a cease-fire and therefore is more inclined to protect its interests by continuing to supply arms. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Yao Won-Yuan: Singing the Riiht Tune In his meeting in May with leftist journalists from Hong Kong, Politburo member Yao Wen-yuan shed some light on his own role in the leadership and seemed to reveal a genuine concern in Peking over how the rest of the world sees events in China. Yao's remarks were not unusual in themselves--they were generally moderate in tone and have been made by others in the leadership--but coming from the once firebrand leftist, his comments seem to suggest that Yao is toeing the line set forth by the pre- dominantly pragmatic coalition in Peking. Yao urged the journalists to emphasize the unity and stability theme that has been a staple of domestic propaganda in order to create a good impression among readers in Hong Kong. lie said the journalists must publicize the party's policies in the "correct" manner, and their articles should reflect China's progress and prosperity. These com- ments imply that it is important in Peking's eyes for the Hong Kong communist press to present a fa- vorable picture of China to the outside world. In foreign policy, Yao also urged a "correct" assessment of the international situation. As for China's attitude toward Bong Kong and Macao, Yao reportedly said that it wo!ild be necessary to wait for a rather long time before solving these problems by "peaceful negotiations." In the meantime, he re- portedly told the journalists to try to "win over" anti-communist residents of Hong Kong, claiming that they can be re-educated, as were the former Kuomintang prisoners of war. Predictably, Yao told the journalists to write articles, based on guidance from Peking, on the cur- rent "proletarian dictatorship" campaign. Less pre- dictably, he put relatively little emphasis on the August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 25X1 revolutionary model cultural works that are the product of his mentor, Chiang Ching. Yao reportedly noted only that the meaning of the model works "should not be neglected" and urged the journalists to carry on China's cultural heritage. Yao has long been thought to have domestic propaganda duties, particularly in regard to the official party journal Red Flag, but there are in- dications that he may share the propaganda account with fellow Politburo member. Chang Chun-chiao. C,iven his briefing of the Hong Kong journalists, it appears that Yao also has some responsibility fog: the overseas Chinese press as well. If Yao does in fact direct overseas Chinese propaganda, it will be interesting to watch the per- formance of the Hong Kong leftist press. Two news- papers in Hong Kong, Ta Kung Pao and Wen Hui Pao, have often seemed to take opposing lines on domestic events in China. In view of Yao's order to emphasize unity and stability, presumably there should be less difference in the editorial lines taken by the two Hong Kong journals in the future. August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 July 11 Papua New Guinea Chief Minister Maori Kiki meets in Port Moresby with China's charge d'affaires in Australia, Chu July 11-29 Japanese Liberal Democratic Party elder Tokuma Utsunomiya visits China at invi- tation of China-Japan Friendship Associa- tion; also makes side-trip to North Ko- rea where he meets with President Kim Il-song. July 14 July 15-19 July 17 July 19 July 22 Peking. Tanzanian trade delegation arrives in Zambian trade delegation feted. 25X1 25X1 Vice Premier Li Hsien-nien meets and has "cordial and friendly" talk with visiting North Vietnamese insurance delegation led by Vice Finance Minister Trinh Van Binh; delegation returns to 25X1 Hanoi on July 19. Palestine Al Fatah delegation arrives in China. PLA troops in Chekiang enter factories to restore order. Chang Wen-pi, former subordinate of Li Te-sheng in Anhwei's 12th Army, identified as new commander of Chekiang 25X1 August 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3 July 23 Chinese bank delegation departs Pekin for Somalia, Tanzania, and ZambiaJ 25X1 L Malagasy Republic economic delegation July 24 Mauritanian public health de eanti-n starts visit to China. Vice Premier I-Iua Kuo-feng meets with visiting Albanian friendship delega- tion led by alternate central committee- man Bajram Thermia. Sino-Soviet trade agreement for 1975 signed in Moscow by Deputy Foreign Trade July 26 China launches 3rd successful satellite. July 27 Vice Premier Hua Kuo-feng meets with visiting North Korean Vice President Kang Tung-uk. July 31 Army Day celebrations marked by re- 1.abilitation of Lo Jui-ching and ap- pearance of most reaional military Augi;3 t 4, 1975 Approved For Release 2008/11/13: CIA-RDP86T00608R000300080018-3