NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030900010058-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 10
• Document Creation Date: December 20, 2016
• Document Release Date: November 21, 2006
• Sequence Number: 58
• Publication Date: November 4, 1978
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Saturday 4 November 1978 CG NIDC 78/258
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
State Dept. review completed Top Secret
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National Intelligence Daily Cable for Saturday, 4 November 1978.
T e NID Cable is for the purpose o intorming
senior US officials.
VIETNAM-USSR: Friendship Treaty
CHINA - SOUTHEAST ASIA: Teng
USSR
Bangladesh
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VIETNAM-USSR: Friendship Treaty
Asia, which was already suspicious of Hanoi's close relations
with Moscow. The Chinese have warned loudly and often that
Vietnam is a Soviet puppet--"the Cuba of the East"--and Viet-
namese Premier Pham Van Dong had ZittZe success assuaging this
fear during his five-nation swing through Southeast Asia this
fall. Nevertheless, the Vietnamese have obviously reached the
conclusion that their deteriorating relationship with China
and the need for aid must take priority.//
//The treaty of friendship and cooperation signed
yesterday by Vietnam and the USSR is sure to complicate both
Vietnamese and Soviet relations with non-Communist Southeast
//While the treaty does not require Soviet mili-
tary intervention in case of an attack on Vietnam, Hanoi un-
doubtedly entered into the treaty in the hopes that it will
give China pause before taking strong measures against Vietnam
in the future. Hanoi is concerned that its coming offensive
against Cambodia would provoke the Chinese to escalate the
pressure on Vietnam's northern border, where numerous incidents
have already occurred.//
//The treaty probably does not come as a surprise
to Peking, which has become increasingly displeased with the
closer ties between Hanoi and Moscow since the end of the Indo-
china war in 1975. Nonetheless, Chinese concern about Vietnamese
intentions will be heightened by the treaty, which Peking will
interpret as Soviet endorsement of any future Vietnamese moves
against Cambodia. Peking almost certainly will continue to in-
crease its own support to Phnom Penh, primarily with more mate-
rial assistance.//
ments were signed, including one to complete the bridge across
the Red River in Hanoi; the Chinese cut off assistance to this
project last summer.//
//The treaty heralds increased Soviet military
and economic assistance to Vietnam. A number of other agree-
//There are indications that the Soviets have been
pressing Vietnam to conclude the treaty for some time. When
President Podgorny visited Hanoi in October 1971, the two sides
signed a joint statement that was obviously intended to mollify
Moscow for Vietnam's reluctance to conclude a treaty.//
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//The Soviets will see the treaty as a major vic-
tory in their longstanding competition with China for influence
in Vietnam, and will exploit the treaty as leverage in trying
to obtain naval port visits and access to Vietnamese air and
port facilities to service the Indian Ocean Squadron. 25X1
CHINA - SOUTHEAST ASIA: Teng
//Chinese Vice Premier Teng Hsiao-ping ar-
rives in Bangkok today on a ten-day tour that will take him to
Kuala Lumpur and Singapore. Teng's trip comes on the heels of
visits to the region by high-level officials of Vietnam, Cam-
bodia, and the USSR. The Vice Premier will present China's case
for an independent Cambodia and against the expansion of Viet-
namese and Soviet influence in Southeast Asia. He will also at-
tempt to offset longstanding concerns about China's connections
to ethnic Chinese and Communist parties in the region.//
//Teng's talks in Thailand will focus largely
on international issues. Thai and Chinese leaders share an in-
terest in maintaining Cambodia as a buffer against Vietnamese
influence.
Teng probably will link China's troubles with Vietnam
to what the Chinese describe as Soviet meddling in the region.
In this regard he will be sure to emphasize yesterday's signing
of the Soviet-Vietnamese treaty of friendship and cooperation.
The Thai reportedly will inform Teng they have recently rejected
Soviet requests for a naval port call and a cultural agreement.
Sino-Thai bilateral agreements on trade and coopera-
tion in science and technology will be finalized during Teng's
trip. Agreement in principle was reached during Thai Prime Min-
ister Kriangsak's visit to China earlier this year.
I In Malaysia and Singapore, Teng is likely to reiter-
ate anti-Soviet themes and voice China's support for the re-
gional concept of a "zone of peace, friendship, and neutrality."
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He will face rough sledding, however, on the intractable issues
of continued Chinese low-level support for insurgent Communist
parties and China's connection to ethnic Chinese in Southeast
Asia.
//Vietnamese Premier Pham Van Dong, on a re-
cent tour of-E ie region, promised not to support insurgent Com-
munist parties, and the Malaysians are reportedly prepared to
use this promise to extract a similar concession from the Chi-
nese. Teng used a recent press interview to restate Peking's
basic interest in stability and good state-to-state relations
in the region and dismissed Dong's promise as a deception.//
//The Chinese have long argued that the in-
surgencies are essentially an internal problem, but they have
been unable to renounce their party ties to the insurgents.
Teng may try to escape this dilemma by suggesting--as he has in
the past--that if China ends its support, the rebels might be-
come a greater threat to stability by turning to the Vietnamese
or the Soviets for assistance. The Chinese Vice Premier almost
certainly will try to keep discussions private and avoid state-
ments to the press on this sensitive subject.//
//In Singapore, discussions will focus on
economic cooperation, technical exchanges, and trade. China and
Singapore do not have formal diplomatic relations, but senior
Singapore officials have visited China in the past, and China
maintains a semiofficial presence in its Bank of China office.
Singapore's leaders are particularly sensitive about the issue
of China's links to the island's ethnic Chinese, and they will
probably seek assurances about Peking's policy toward them.//
//In the past the ethnic Chinese have been
used by Peking to support China's policies in the region and
have been seen as a threat by their host governments. Recent
Chinese efforts to increase ties to the ethnic Chinese have
rekindled Southeast Asian fears.//
Teng likely will attempt to allay those concerns
while presenting China's case that the ethnic Chinese in South-
east Asia have a role to play in China's own economic modern-
ization--through their remittance and scientific and technical
know-how--as well as through their cultural ties to the Chinese
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//Moscow took advantage of the bullish gold
,
market in September to sell 59 tons of gold, worth about $400
million. Soviet sales for the first 9 months of 1978 totaled
334 tons, valued at an estimated $2.1 billion. Sales during Oc-
tober, when the price of gold continued to rise, were probably
also between 50 and 60 tons.//
Should the recent sharp drop in gold prices usher in
a period of unsettled market conditions, Moscow is likely to
cut back sales drastically. Soviet gold traders typically re-
strain sales when the market is depressed.
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Even with minimal gold sales in November and December
and despite rising interest payments on Moscow's debt to the
West and what we believe will be a $4 billion hard currency
trade deficit, Moscow will be in a favorable hard currency po-
sition. Record gold sales to date, together with hard currency
earnings from tourism, services, and the like should keep the
Soviet current account nearly in balance.
Bangladesh
I I Two high-level Bangladeshi officials informed the US
Ambassador in Dacca that the parliamentary election scheduled
for December will be postponed until 27 or 30 January. The de-
cision--which will be announced on 1 December--appears unlikely
to bring any strong adverse reaction.
I resident Ziaur Rahman's party and the opposition are
in disarray and need additional time to organize. More time is
also needed for the delineation of constituencies, the nomina-
tion of candidates, and the preparation of ballots.
Zia is likely to respond to critics of his decision 25X1
by saying that the election process is under way. Additionally,
the election will now be held during the postharvest period,
when South Asian voting has traditionally been held. I-- I
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