COMMUNIST CHINA'S POWER POTENTIAL THROUGH 1957

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A004000010001-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 27, 2016
• Document Release Date: November 29, 2012
• Sequence Number: 1
• Publication Date: June 3, 1954
• Content Type: NIE

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NATIONAL INTELLIGENCE ESTIMATE
0
COMMUNIST CHINA'S POWER POTENTIAL
THROUGH 1957
T= c01059369 (RIF)
NIE 13-54
Approved 25 May 1954
Published 3 June 1954
DOCUMENT'NO.
...... 44e
NO CHANGE IN CLASS.
X DECLASSIFIED
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AUTH: HR 70-2
DATE: /1
The Intelligence Advisory Committee concurred in this
estimate on 25 May 1954. The AEC and FBI abstained,
the subject being outside of their jurisdiction.
The following member organizations of the Intelligence
Advisory Committee participated with the Central Intel-
ligence Agency in the preparation of this estimate: The
intelligence organizations of the Departments of State,
the Army, the Navy, the Air Force, and The Joint Staff.
TS S C
REVIEWER: rovce4
CENTRAL INTELLIGENCE AGENCY
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-4;111111116 T
COMMUNIST CHINA'S POWER POTENTIAL THROUGH 1957
THE PROBLEM
To estimate the political, economic, and military development of Commu-
nist China through 1957.
CONCLUSIONS
1. The Chinese Communists' have as
their long-range goal the development of
a Soviet-style state in China, with its own
bases of economic and military strength,
and dominant in eastern and southern
Asia. To this end they will proceed, as
rapidly as possible, through the forced
and ruthless measures characteristic of
Communist regimes, to reorganize the
social structure along Communist lines,
improve the effectiveness of the adminis-
trative system, and develop the economy
to the extent feasible. The regime will
devote substantial resources to modern-
izing and strengthening its armed forces
as a power base for its foreign policy.
2. Although the Chinese plans for eco-
nomic development are not known in
detail, it appears that these plans com-
template an increase in total output in
1957 to 20-25 percent above the 1952 level.
Emphasis is placed upon increasing the
output of the modern industrial sector,
particularly heavy industry and trans-
port. Fulfillment of the regime's eco-
nomic plans depends upon increasing
lExcept where otherwise indicated explicitly or by
context, "China" and "Chinese," as used here-
after, refer to Communist China and the Chi-
nese Communists.
agricultural output while rigorously re-
stricting consumption so as to provide
the resources needed to support the in-
dustrial investment and military pro-
grams. A large part of the capital goods
needed to fulfill the program will have to
be obtained from the rest of the Soviet
Bloc in return for Chinese exports. Avail-
able resources will have to be efficiently
allocated to ensure that crucial sectors
of the economy, such as transport, meet
the demands generated by increasing
production.
3. Barring a major crisis or other un-
predictable event, we estimate that China
will have attained by 1957 a gross nation-
al product of roughly US $32 billion, an
increase of 20-25 percent over the '1952
figure. We estimate that agricultural
output will be about 10 percent higher
than in 1952, and the output of the mod-
ern industrial sector of the economy 70-
100 percent higher. The increases in in-
dividual industries (including transpor-
tation) will of course vary widely from
this over-all rate of increase. Even by
1957, however, the Communists will only
have begun the modernization of China's
economy. The country will as a whole
remain agrarian and underdeveloped.
igICCzat2" 1
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,wrj/itaiR T
4. We believe that by 1957 the Chinese
regime will have increased its adminis-
trative efficiency and have further tight-
ened its control over its people and re-
sources, but the regime will not have been
able substantially to alter traditional so-
cial patterns or to obtain more than pas-
sive acceptance from the bulk of the pop-
ulation. However, we believe that the
regime's ability to direct and control
China will not be significantly impaired.
Furthermore, we believe that the regime
will be able to master leadership prob-
lems that are likely to arise, even in the
event of the death or retirement of Mao
Tse-tung.
5. The internal control and the interna-
tional power position enjoyed by the
Communist regime rest largely upon the
power potential of China's military estab-
lishment, at present the largest of any
Asian nation. We believe that the mili-
tary establishment will gain in strength
and effectiveness during the period of
this estimate through the regime's pro-
gram of modernization and training.
Soviet assistance will continue to be es-
sential to the fulfillment of this program.
6. We believe China's dependence on the
USSR will not be significantly lessened
during the period of this estimate, and
that maintenance of the alliance with
the USSR will continue to be a dominant
aspect of China's foreign policy. The
Communist Chinese regime will continue
to consolidate its political position, to
gain in economic and military strength,
and by 1957 will be a more powerful force
in world affairs than at present. Cer-
tain aspects of China's development will
be used to support claims that time is
on the Communist side in Asia. China's
increased power and prestige will present
a challenge to the influence of the West-
ern nations in Asia, and to the Asian
leadership aspirations of India and Ja-
pan.
DISCUSSION
I. INTRODUCTION
7. Since their assumption of power in 1949,
the Chinese Communists have, with Soviet
assistance, built up a powerful military estab-
lishment. The Communists have undertaken
a political and social revolution of vast pro-
portions, and they have virtually eliminated
effective opposition. They have largely re-
habilitated and established control over the
country's economy.
8. The Communist regime has accomplished
the foregoing in, the face of serious obstacles
and at great economic and human cost. In
1949 the regime was confronted by widespread
economic disruption, and general weariness re-
sulting from 12 years of virtually continuous
war. The regime has had to impose its will
on 500,000,000 Chinese people and over an
area approximately as large as the US, Mexico,
and Alaska combined. The bulk of the people
are illiterate; communication and transporta-
tion facilities are rudimentary or inadequate
in many areas. Formidable problems must
still be overcome before the Chinese reach the
ambitious goals set by the regime.
II. PRESENT SITUATION IN CHINA
9. The Chinese Communist regime has under-
taken to create an industrialized and mili-
tarily powerful state. At present, the energies
of the regime appear to be devoted to the
consolidation and expansion of China's eco-
nomic strength, modernization of military
forces, and the transformation of China's
political and social structure. To these ends,
the regime is creating a more effective admin-
istration of government, intensifying its con-
ISONIM:fteMia'
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wiKiNIWOIS T 3
trols, and undertaking to eliminate or neu-
tralize institutions or individuals which stand
in the way of its goals.
Political Development
10. Administration and leadership. The Chi-
nese Communists have adapted Soviet admin-
istrative and political institutions and tech-
niques to Chinese conditions. The highly
centralized and dictatorial government has
instituted effective measures to suppress tra-
ditional regional, clan, and ethnic loyalties,
and has imposed a unitary state structure
with direct lines of command down to the
village level.
11. Ultimate power in China resides in the
Communist party and is vested in the Political
Bureau (Politburo) of the Party's Central
Committee. Under Mao Tse-tung's leadership
each of the five principal members of the
Politburo appears to have certain general
areas of responsibility, in addition to collective
responsibility in the Politburo: Liu Shao-c'hi,
party affairs; Chou En-lai, operation of the
government; Chu Teh, military; and Ch'en
Yun and Kao Kang, economic affairs.
12. The decisions of the Politburo are trans-
mitted through a governmental structure pat-
terned on that of the USSR. (See Chart I.)
The highest place in the governmental struc-
ture is reserved for the All China People's Con-
gress, a body to be chosen by national elec-
tions now promised for 1954. Until this event
takes place the top governmental body is the
Central People's Government Council, headed
by the Chairman (Mao Tse-tung) and six vice-
chairmen. To bolster the fiction that the gov-
ernment is a coalition, three of the six vice-
chairmen are "democratic personages" repre-
senting other political groups such as the
Chinese Democratic League and the Kuomin-
tang Revolutionary Committee. The princi-
pal administrative bodies ? the Government
Administration Council and the People's Revo-
lutionary Military Council ? are nominally
responsible to the Central People's Govern-
ment Council. However, since the principal
members of the Politburo are also members
of these administrative bodies, the authority
of the Communist party is brought to bear
directly upon the administration of the state.
Decisions made by the national authority are
implemented in each of the administrative
regions of China by a regional organization
composed of party, government, and military
organs. A similar pattern of integrations of
party and government is repeated down to
local government level.
13. Chinese leadership is marked by the co-
hesion and stability of the party elite. The
Communist leaders have been closely knit by
their common experience in revolution and
war since the party's founding in 1921. As in
any group, however, there have been rivalries
for power in the past and some almost cer-
tainly exist at present. Party pronounce-
ments such as the February 1954 warning by
the Central Committee on existing dangers to
party unity suggest the existence of differ-
ences and rivalries, and there are hints of the
existence of ill-defined groupings about Liu
Shao-ch'i and Chou En-lai. There is no firm
evidence, however, of clearly established fac-
tions among the upper echelons. There have
been no major purges in the past 16 years.
14. The precise manner in which Soviet influ-
ence or control finds its way into Chinese
policies is not known. The USSR apparently
treats its Chinese ally with deference. Soviet
advisers almost certainly are in contact with
the highest level of Chinese party and govern-
ment leadership, but we do not believe that
these Soviet officials issue direct orders. We
believe the USSR is able to exert influence over
Chinese policies primarily by virtue of their
common ideology and China's economic and
military dependence on the USSR.
15. Political Controls. The Communist re-
gime has vigorously and ruthlessly set about
establishing political control over the Chinese
people. To do this, it has employed a wide
array of programs, ranging from inducements
and patriotic appeals to coercion and terror.
16. The Chinese Communists have developed
an elaborate system of persuasion, involving
social, economic, legal, and psychological
pressures, and the operations of an extensive
and highly coordinated propaganda appa-
ratus. The Communists have sought to in-
still in the people a sense of participation in
...?011ailEgf"
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Chart 1
- COMMUNIST CHINA
PARTY AND GOVERNMENT ORGANIZATION
CHINESE COMMUNIST
PARTY
NATIONAL PARTY CONGRESS
(Supposed to meet every three years
to elect Central Committee, has not
met since /945; may meet in 1954 or
/955.)
THE CENTRAL COMMITTEE
(Currently has 43 regular members and
27 alternates.)
POLITICAL BUREAU
*Mao Tse-tung?CHAIRMAN
*Liu Shao-ch'i ?VICE CHAIRMAN
*Ch'en Yiin *Lin Tzu-han
*Chang Wen-t'ien *P'eng Chen
*Chou En-lai *P'eng Teh-huai
*Chu Teh *Tung Pi-wu
*Kao Kang
THE SECRETARIAT
*Mao Tse-tung?CHAIRMAN
*Chou En-lai
*Chen Yun
*Chu Teh
*Liu Shao-ch'i
CENTRAL PEOPLE'S
GOVERNMENT
ALL-CHINA
PEOPLE'S CONGRESS
(to be elected in /954)
CENTRAL PEOPLE'S
GOVERNMENT COUNCIL
CHAIRMAN
? *Mao Tse-tung
DEPUTY CHAIRMEN
**Chang Lan
*Chu Teh
*Kao Kang
"*Li Chi-shen
*Liu Shao-ch'i
**Sung Ch'ing-ling
(Mme Sun Yat Sen)
GOVERNMENT
ADMINISTRATION COUNCIL
*Chou En-lai?PREMIER
MINISTRY OF FOREIGN AFFAIRS
*Chou En-lai
FINANCE AND ECONOMICS:COMMITTEE
*Ch'en Y?n
STATE PLANNING COMMITTEE'
*Kao Kang
POLITICAL AND LEGAL COMMITTEE
(Security and justice)
*Tung Pi-wu
SUPERVISION COMMITTEE
(Supervision operation of government)
**Tan P'ing-shan
CULTURE AND EDUCATION COMMITTEE
**Kuo Mo-jo
NORTHEAST
NORTH
EAST
CENTRAL?SOUTH
SOUTH WEST
NORTHWEST
MINISTRIES
REGIONAL 01,2GAIislIZATION2
PEOPLE'S REVOLUTIONARY
MILITARY COUNCIL
CHAIRMAN
*Mao Tse-tung
DEPUTY CHAIRMEN
**Ch'eng Ch'ien
*Chou En-lai
*Chu Teh
*Kao Kang
*Lin Piao
*Liu Shao-ch'i
*Peng Teh-huai
REGIONAL BUREAUS
*Kao Kang
Po 1-pa
Tan Chen-lin, acting
Yeh Chien-ying, acting
Ho Lung
Ma Ming-fang
ADMINISTRATIVE
AREA COMMITTEES
*Kao Kang
Liu Lan-t'ao
Jao Shu-shih
Yeh Chien-ying, acting
Liu Po-ch'eng
*P'eng Teh-huai
MILITARY AREAS
*Kao Kang -
Nieh Jung-chen
Chen Yi
Yeh Chien-ying, acting
?Ho Lung
*P'eng Teh-huai
*Chidese Communist Politburo Members
**No,Communist Party Members
The underlining indicates the government positions held
by the six most important members of the Politburo.
k The exact relationship of the State Planning Committee to
the Government Administration Council is not known.
2.1n addition there are two autonomous areas, Inner Mongolia
and Tibet, that are also on o regional level.
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sZakkaaw
the "new China" and, through exaggerated
claims of China's military and diplomatic
accomplishments, to stimulate Chinese na-
tional pride. The regime has attempted to
win public support by extensive campaigns
against corruption and nepotism and by prom-
ising increased opportunity to the peasantry
and urban proletariat. The regime has tried
in particular to win the loyalties of youth.
17. The Communists have had considerable
success in winning support from certain seg-
ments of the population. Some of the in-
itial revolutionary zeal remains. In partic-
ular, a large portion of China's youth is im-
pressed by the regime's achievements. Other
important and energetic elements of support
are found among members of the armed
forces, government workers, skilled industrial
workers, and a considerable proportion of the
women.
18. Through terror and force, the Commu-
nists have eliminated the landlord class and
thousands of businessmen, professionals, and
former government officials. There is no evi-
dence of significant organized resistance to
the regime. To insure its control, the regime
has established extensive security and police
forces in addition to the army. In addition
to these organized forces, the regime's ability
to ferret out dissenters has been augmented
by a pervasive system of vigilance committees
and volunteer informers.
19. However, much of the voluntary support
the regime received in 1949 has been dissi-
pated. The regime's coercive measures have
created an atmosphere of fear among many
segments of the population. Many Chinese
have probably become increasingly suspicious
that the USSR is encroaching upon China's
sovereignty. In some instances, strong ad-
verse reactions have resulted from attacks on
religious and traditional institutions. In-
creased taxation and- regimentation have
caused an adverse reaction among the
farmers. Dissatisfaction has arisen among
workers as a result of the failure of real in-
come to rise. Merchants and petty shopkeep-
ers are resentful of heavy taxes and govern-
ment competition. Dissatisfaction has grown
among intellectual and professional groups as
4
a result of the drop in their living standards
and of the regime's unrelenting pressure
toward literal conformity.
20. However, such dissatisfaction as now
exists in China has neither the universality,
the intensity, nor the physical means by which
to transform itself into effective resistance.
Economic Situation
21. China is an underdeveloped agricultural
country with a population of 500 million.
China's estimated gross national product of
approximately US $27 billion 2 is less than one-
third of Soviet and about one-fourteenth of
US GNP. China's per capita gross national
product of roughly US $54 is about equal to
that of India but only about one-quarter that
of Japan. While there are the beginnings for
a modern industrial development the present
contribution of the industrial sector to total
output is small. The regime faces a formida-
ble task in achieving its long-term goal of a
modern industrialized economy. To accom-
plish this, the Communists are developing
their organization for planning and for con-
trolling the economy.
22. As in any planned economy, the national
budget is the major instrument for channel-
ing resources to implement the regime's pro-
grams. By 1952, the Chinese national budget
had risen to about a third of the gross nation-
al product, a substantially lower proportion
than in the case of the USSR. The two most
important categories of budget expenditures
during this period have been military outlay
and capital investment. (See Chart II for
breakdown of the budget.)
23. In 1949, when the Communists undertook
the task of rehabilitating and expanding the
Chinese economy after 12 years of wartime
disruption, production was extremely low.
At that time, the production of electric power
was only about two-third's of the peak pro-
duction under the Japanese, coal roughly two-
_
'Estimates based on 1952 data are used generally
throughout. Changes since 1952 are believed not
to have altered the general order of magnitudes
or the relationships.
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