THE PRESIDENT'S DAILY BRIEF 4 JANUARY 1972

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993060
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: January 4, 1972

Declassified in Part - Sanitized Copy Approved for Release 2016/06/14 : CIA-RDP79T00936A010300020001-0
The President's Daily Brief
4 January 1972
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THE PRESIDENT'S DAILY BRIEF
4 January 1972
PRINCIPAL DEVELOPMENTS
Our assessment of the state of affairs in Communist
China, based on Peking's annual New Year's editorial,
is on Page 1.
Comments on Mujib's release from house arrest in
Pakistan, and reports of Bangladesh Government ef-
forts to restructure its economy are on Page 3.
FOR THE PRESIDENT ONLY
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COMMUNIST CHINA
Peking has issued a low-key New Year's Day pro-
nouncement which touts China's diplomatic and eco-
nomic progress but is uninformative on political
subjects. The joint People's Daily, Red Flag, and
Liberation Army Journal editorial avoids a public
airing of the recent leadership upheaval, and its
emphasis on unity and re-education suggests that no
sweeping purge in the ranks of the army or party is
in the offing. Nevertheless, in warning that much
work remains to be done on the provincial level,
the editorial indicates that local party bodies will
be at least selectively revamped.
Eventual changes in the local power struc-
ture will most 'likely further dilute the
influence of both civilian and military
ultraleftists. The political status of
the military establishment is still in
question, and the editorial's stress on
the importance of conventional military
activities, as opposed to the army's po-
litical chores, underscores the sensitiv-
ity of this issue.
The editorial offers indirect testimony of
Chou En-lai's influence. Reflecting predictable
Chinese pleasure over Peking's enhanced interna-
tional position, the statement devotes considerable
attention to Peking's entry into the UN and its new
diplomatic ties abroad. The United States is treated
in. a relatively neutral and a markedly low-key fash-
ion. By contrast, the Soviet leadership,. including
party chief. Brezhnev, comes in for some polemical
criticisms. Contrary to last year, when Japan was
characterized as a major Chinese adversary, there
is almost no anti-Japanese commentary. The Taiwan
issue is treated in unusual detail, reflecting Pe-
king's serious concern over the future of the island.
Peking has also released selected statistics
on the performance of the Chinese economy in 1971.
This is the most year-end data that the Chinese have
released since 1959.
Our preliminary analysis of these statis-
tics indicates that industrial output grew
at a rate of about ten percent over the
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previous year. This is less than the 17-
percent growth we estimate for 1970, but
growth that year was atypical because the
Chinese easily put back into use much plant
capacity previously idle. In 1971, the
Chinese relied more on new facilities,
Chinese living, standards remained adequate,
even though bad weather kept agricultural
output at the level of the previous year,
when 215-220 million tons of grain were
produced. China has food reserves, how-
ever, and could afford to buy more abroad
if needed.
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PAKISTAN-BANGLADESH
By freeing Bangladesh President-designate
Mujibur Rahman unconditionally, Bhutto
apparently intends both to satisfy pro-
Bengali international opinion and to pave
the way for the repatriation of Pakistani
troops and civilians from the east.
Bhutto, who from the time he returned to
Pakistan to replace Yahya said he would
release the Sheikh, nevertheless delayed
this action for some time, presumably to
try to extract some meaningful concession
from Mujib. He seems to have finally de-
cided that Mujib's unconditional release
was the only way to limit Indian influence
in the former province.
As Bhutto tells it to Ambassador Farland,
Mujib has been poorly informed about the
course of the war and is despondent to
learn that Indian troops occupied all East
Pakistan. Bhutto says that Mujib is de-
termined to resist Indian domination.
Because Mujib has been out of touch for
some nine months, it may be difficult for
him immediately to assert his authority
as head of government. Also, some of the
Bangladesh leaders who have been organ-
izing the government in Dacca may be re-
luctant to give the revered Mujib real
authority.
The Bangladesh Government is moving ahead in
restructuring the economy. It has taken control of
274 firms, in addition to the jute and tea sectors
that were taken over last week, and ceilings have
been set for private salaries. A food corporation
has been formed to procure and distribute rice, and
efforts are being made to get fertilizer and machin-
ery into those areas where the rice crop currently
is being planted. Some money and food have been al-
located for the returning refugees. Trade pacts
with the USSR, Bulgaria, and Czechoslovakia are said
to be near consummation.
(continued)
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Although the Bangladesh rupee has been
devalued by about one third, this will
not necessarily improve the new country's
foreign trade. Most sectors of the econ-
omy, including shipping and industry,
must first be set in order. Dacca's ma-
jor exports, raw jute and jute manufac-
tures, are suffering from a declining
world demand as consumers switch to syn-
thetic fibers. A return to prewar eco-
nomic conditions will require substantial
inflows of foreign aid.
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New Communist Road Construction
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NOTES
Laos: North Vietnamese units, including ele-
ments of five or six infantry regiments, are edging
closer to Long Tieng and its outlying defenses. An
intercept of 2 January between unidentified North
Vietnamese units refers to sending in assault ele-
ments in coordination with "our big artillery." A
similar message of 1 January refers to taking three
more days to "be prepared."
South Vietnam: The. Communists are constructing
a new road within the DMZ which branches off Route
102 toward the central region of northern QuanTTri
Province
\the Commu-
nists are working to repair rain and bomb damage on
the road they began last May through the western
corner of the DMZ and into Quang Tri Province. These
roads will shorten the supply line to enemy forces
in this region of South Vietnam.
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Top Secret
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