CHINA AND SOUTHEAST ASIA: A GENTLE RAPPROCHEMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79M00098A000200150002-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 26
• Document Creation Date: December 16, 2016
• Document Release Date: November 15, 2004
• Sequence Number: 2
• Publication Date: November 15, 1971
• Content Type: IM

Approved For Release 2005/04/22 : CIA-RDP79M00098A000200150002-2
Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
China and. Southeast Asia: A Gentle Rapprochement
Secret
42
Approved For Release 2005/04/22 : CIA-RDP79M00098A0002
0150002-2
25X1
7-02A
 25X1 Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
Next 1 Page(s) In Document Exempt
Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
 Approved For Release 2005/04/22tf'9M00098A000200150002-2
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
15 November 1971
China and Southeast Asia:
A Gentle Rapprochement
Chinese attitudes toward Southeast Asia have
gone almost full circle from the "Bandung" or
"peaceful coexistence" period of Chinese diplomacy
in the mid-1950s, through a Maoist policy of sub-
version and revolutionary action, and now back to
what in many respects resembles the peaceful co-
existence approach. Whichever approach Peking has
used in Southeast Asia--peaceful coexistence, rev-
olutionary war, or a combination of the two--its
objectives have generally remained constant: the
creation of a belt of neutralist or Communist states
amenable to Chinese political influence and insulated
from Western, and of late, Soviet pressures. There
is an element of timelessness in the Chinese belief
that these objectives will be attained.
Peking's unhurried view of the future may have
been affected for the moment, at least, by its fears
that the Soviet Union and possibly Japan will at-
tempt: to move into Southeast Asia as the US moves
out. Growing Russian military and political pres-
sure impelled Peking's leaders to end the isolation
which accompanied Red Guard diplomacy during the
Cultural Revolution, creating an immediate necessity
for China to begin strengthening its international
Note: This memorandum was prepared by the Office
of Current Intelligence and coordinated within CIA.
25X1
25X1
Approved For Release 2005/04/22~FC9]`RBP99M00098A000200150002-2
 Approved For Release 2005/04 CAT P79M00098AO00200150002-2
25X1
influence vis-a-vis the USSR. Peking distrusts
Japan's increasing economic influence in Southeast
Asia, seeing it as a possible prelude to renewed
Japanese political and military power there.
China's efforts to improve relations with the
countries of Southeast Asia have been complicated
by its continual espousal of local revolutionary
wars. At present, Chinese support of insurgencies
in Southeast Asia is primarily dependent on state-
to-state relations: where relations on a state
level have been acceptable to Peking, overt assist-
ence to antigovernment elements has been curtailed.
On the other hand, Peking has in varying degrees
supported insurgents in "unfriendly" states--mainly
to gain leverage against.the government in power
and, hopefully, to influence national policy deci-
sions.
The Indochina war aside, Peking has limited
itself primarily to selective political and moral
support for antigovernment campaigns. Insurgents
in Thailand, Malaysia and, until last year, Burma
have received the most intensive propaganda support,
partly through Peking-supported clandestine radio
stations located in south China. Available evi-
dence indicates that only the Burmese and Thai
groups have received any material support and that
only in modest amounts. To the governments of
Southeast Asia, however, Chinese persistence in
encouraging revolution represents the most crucial
problem affecting their relations with Peking. In.
varying degrees, all the countries of Southeast
Asia suffer from armed insurgencies and all are
haunted by the specter of Chinese aid to the rebels.
Many nations also worry about the effect that
closer relations with China will have on their resi-
dent Chinese minorities. In many instances, the
local Chinese have remained unassimilated, and,
consequently, national governments tend to regard
them as potential channels for foreign influence
and subversion. Overseas Chinese control a large
proportion of the region's commerce, and indigenous
leaders fear future developments which might give
25X1
Approved For Release 2005/0,RBC- JEt-WbP79M00098A000200150002-2
 Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
SECRET
25X1
the Chinese increased political influence. As part
of its recent effort to create a favorable mood in
Southeast Asian capitals, Peking has carefully
avoided appearing to be the champion of local Chi-
nese communities.
The pace at which Peking has been able to
establish a more reasonable and active position in
the area has been slowed by its own ideological
constraints, by the difficulties inherent in aban-
doning past policies, and by its unstable leadership
coalition. In spite of these constraints, China has
begun to make progress in various Southeast Asian
countries, and Peking clearly expects further ad-
vances in the near future.
The nations of Southeast Asia see increased
relations with China as inevitable, although few
if any are enthusiastic about the prospect. For
several, the solution has been to approach China
through trade connections and leave diplomatic
considerations in abeyance, but all are acutely
aware of the need to stay in step with their neigh-
bors. No one wants to be the last nation to rec-
ognize Communist China. While China believes that
time is in its favor, it has tried to accelerate
and encourage the pro-China trend by adopting an
increasingly flexible and forthcoming approach
toward most of the area's governments.
25X1
SECRET
Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
 Approved For Release 2005/04/22s 3pT9M00098AO00200150002-2
25X1
Burma: Diplomatic Reconciliation
1. In the last two years, Peking has worked
to improve relations with Rangoon and to increase
China's political and economic presence there. Sino-
Burmese relations were ruptured in mid-1967 after
subversion by Peking's embassy personnel among Burma's
Chinese minority precipitated anti-Chinese riots in
Rangoon, Peking's interference in Burma's domestic
affairs at that time, however, represented more of
a spillover from domestic extremism in China than
a deliberate abandonment of respect for Burmese neu-
trality?
2.. Burma's apprehensions about China, which
have historically conditioned Burmese foreign policy
decisions, have helped ensure adherence to strict
nonalignment. The 1967 suspension of diplomatic
relations and ensuing Chinese propaganda attacks,
combined with the emergence of pro-Peking guerrillas
in the northeast, only stimulated Rangoon to search
harder for accommodation and to avoid acts that
might further antagonize Peking. Burmese Prime
Minister Ne Win took the initiative in a concilia-
tory speech delivered in November 1969. Although
the Burmese refused to meet all Chinese conditions
for resumption of relations, notably a public apol-
ogy for the Rangoon riots, they did initiate a
gradual lessening of tension. In the course of
upgrading diplomatic representation to the ambas-
sadorial level, Burma made the first move at each
stage. Peking decided to overlook the lack of an
apology and in March 1971 again posted an ambas-
sador to Rangoon.
3. Chinese support for local Communist in-
surgents remains the major issue affecting current
Peking-Rangoon relations. In an effort to pressure
the Burmese leadership after the 1967 riots, China
increased its propaganda support for the Burmese
Communist Party and stimulated a new area of in-
surgency in northeast Burma. Now Peking finds it
difficult to abandon the local Communists in order
to improve relations with Rangoon. China's leaders
have reassured Burmese Communists that, despite
Peking's new diplomatic efforts in Rangoon and
elsewhere, they will not be forgotten.
25X1
Approved For Release 2005/04/22`'` h4-W9M00098AO00200150002-2
 Approved Fpr -2
4. Peking recognizes that continued open support
of dissident activities in Burma. is incompatible
with its desire to improve state relations. Con-
sequently, Chinese military support for the Communists
has become less obtrusive. At the same time, the
clandestine "Voice of the Burmese Peoples," estab-
lished on the Sino-Burmese border last March, has
replaced Radio Peking as the channel for the anti -
Ne Win propaganda, and China's official media pay
scant attention to the activities of Burmese Com-
munists,
5. The most significant event in the Sino-
Burmese rapprochement was Ne Win's trip to Peking
last August. An atmosphere of cordiality prevailed
throughout the visit, and the Chinese leaders went
out of their way to flatter the Burmese. Mao Tse-
tung honored Ne Win with a personal audience and
Premier Chou En-lai later escorted him back to
Canton from Peking. The Burmese were favorably
impressed by China's apparent keen interest in
Burma and left convinced that the visit had done
much to return relations to a sound footing. Chou
En-lai himself characterized the visit as another
step toward further improvement in relations.
6. Since August, substantial progress has
been made toward resolving some of the specific
issues separating the two sides. While in Peking,
Ne Win agreed to begin talks with exiled Burmese
Communist Party leaders living in China. Rangoon
has already designated an emissary to meet with the
Burmese Communist representatives in Peking later
this fall. By helping to arrange such a meeting,
Chou apparently wished to show that China considers
the insurgents an "internal" Burmese problem, one
which the two sides must resolve between themselves.
Peking may also hope to maneuver the insurgents
into a less aggressive posture, thereby removing
a source of potential diplomatic embarrassment.
China has reportedly counseled the insurgents to
concentrate on organizational work instead of armed
violence, though China will continue to provide aid
and training.
SECRET
25X1
25X1
Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
 Approved For Release 2005/04/22 Seep 9M00098A000200150002-2
25X1
7. Another important, and sensitive, problem
discussed by Chou and Ne Win was the status of over-
seas Chinese in Burma. Chou reportedly assured Ne
Win that Peking had halted its earlier policy of
fostering close ties with Chinese communities abroad.
Recently the Chinese Embassy in Rangoon has tried to
control local Chinese political activities in order
to prevent any repetition of the 1967 rioting. Ran-
goon, in turn, has relaxed its restrictive measures
against the Chinese community, and it has agreed to
compensate local Chinese for losses suffered during
the riots, an issue that had been a major obstacle
to improvement of relations with Peking. In Octo-
ber, Rangoon and Peking agreed to resume Chinese eco-
nomic and technical assistance, which had been uni-
laterally halted by Rangoon in 1967.
8. Despite the apparent success of the Ne Win
visit, Peking will probably not try to rush the pace
of its steadily improving relations with Rangoon.
It will continue to avoid actions that would have
a negative effect. At the moment, Peking accords
the highest priority to its diplomatic efforts and
is unlikely to reverse this policy so long as the
diplomatic offensive continues to be successful.
Burma remains suspicious of Chinese intentions, but
there is a strong element of fatalism in the Burmese
view of China. Although Rangoon resents Peking's in-
volvement with the Communist insurgents, it realizes
it cannot force the Chinese to disengage completely.
Having restored friendly ties with Peking, Rangoon
hopes to avoid antagonizing China again.
Laos: Realistic Appraisal
9. Wishing to maintain good relations with the
North Vietnamese, Peking has tended to follow Hanoi's
lead in Laos, although leaving some room for inde-
pendent maneuver. As the American role in the Indo-
china war has diminished, however, Peking has begun
to emphasize China's unilateral interests in Laos.
Since early this year, Chinese diplomats in Vientiane
have been remarkably active; they have attended more
functions and have displayed a more outgoing and con-
genial attitude. In May, a Chinese Ministry of Foreign
25X1
Approved For Release 2005/04/27''CfA-RDP79M00098A000200150002-2
 Approved For Release 2005/04/2:;~h79M00098A000200150002-2
25X1
Affairs official told the Lao charge in Peking that
China would be "very happy to study proposals by the
Lao government to normalize relations." More re-
cently, Vientiane has expressed an interest in re-
placing its charge in Peking with an ambassador.
10. The attitude of the Lao Government toward
China reflects the views of Prime Minister Souvanna
Phouma, who believes that China will not attack so
long as opportunities remain for a political solu-
tion in Laos that satisfies Chinese desires to re-
duce both American and Soviet influence in Vientiane.
Indeed, he has always believed that China both needs
and wants a neutral Laos as a buffer state. On two
recent occasions, Souvanna noted that China has been
a good neighbor to Laos; he also pointedly said that,
unlike most of Laos' other neighbors, China has never
invaded his country. He has long stressed the need
for Laos to maintain good relations with China, and,
recently he has made a point of keeping on good terms
with Chinese diplomats in Vientiane.
11. The Chinese appear to regard Souvanna
Phouma's continued leadership as important to the
achievement of their objectives in Laos. Chinese
officials in Vientiane have remarked that any de-
velopment that could "shake" Souvanna's government--
namely a rightist take-over--would be "undesirable,"
for "there is no one to replace him." Chou En-lai
once characterized the presence of the Chinese Em-
bassy in Vientiane as proof of the "continuing Chi-
nese respect" for Souvanna and King Savang.
12. The Chinese have encouraged peace talks
between the Lao Government and the Neo Lao Hak Sat--
the Laotian Communist political front whose military
arm is the Pathet Lao. According to a reliable clan-
destine source, the Chinese charge in Vientiane last
October went out of his way to assure the Lao National
Assembly president that China was doing everything pos-
sible to persuade the Communist front to negotiate.
China reportedly wants a government that includes the
Neo Lao Hak Sat and espouses "strict neutrality."
25X1
Approved For Release 2005/04/2?-U- 79M00098A000200150002-2
 Approved For Release 2005/041l EA P79M00098AO002Q0150002-2
25X1
To emphasize Peking's support for the peace talks,
the Chinese charge conspicuously attends the arrivals
and departures of the Lao Communist envoy to Vientiane,
and developments affecting the talks are carried in
official Chinese media.
13. An important factor affecting future rela-
tions between Peking and Vientiane is the extensive
Chinese road-building project carried on in recent
years in northwestern Laos. In the past, Souvanna
expressed uncertainty about Chinese objectives, saying
that he feared the growing Chinese presence meant Pe-
king intended to carve out a sphere of influence in
the area. Although doubt and mistrust remain, Souvanna
did take a more relaxed attitude toward the road in
an interview with the New York'Times in May. He sug-
gested then that the Chinese might be building the
road in order to link China with North Vietnam and
refused to comment on possible Chinese territorial
ambitions in northwest Laos. Souvanna has not yet
reacted to the construction begun in early fall 1971
which will extend the road to the Mekong River.
14. How far Peking is willing, or able, to go
toward improving bilateral relations with Vientiane
and helping to settle the war in Laos will depend
mainly on the priorities it assigns to its relations
with Hanoi. In private, the Chinese have suggested
that Peking would favor a return to the Geneva agree-
ments of 1962, making Laos a "genuine neutral state."
But recently, at North Vietnam's insistence, Peking
felt compelled publicly to rule out, at least for
the present, the possibility of a new Geneva-type
conference to settle the Indochina situation.
Malaysia: Cautious Beginnings
15. Initial interest in establishing a Sino-
Malaysian dialogue emanated from Kuala Lumpur last
year, after the installation of the Razak government
in September. Unlike his predecessor, Prime Minister
Razak believes that Malaysia should adopt a less ad-
amant anti-Communist line in international relations.
Aware that Malaysia's traditional Commonwealth allies
25X1
SECRET
Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
 Approved
are slowly withdrawing from the area, Razak judges
that he must try to normalize relations with China,
which he expects to exercise increasing international
influence and to serve as a counterweight to Japan.
Specifically, Razak has proposed a neutralization
guarantee for all of Southeast Asia, and he hopes
that China's admission to the UN will increase
chances for realization of his plan.
16. Chinese officials privately expressed in-
terest in Malaysia's new foreign policy, but added
that China had no need to join in any guarantee of
neutrality because, unlike the United States and
Russia, China had no imperialist designs. In late
1970 and early 1971, Peking offered tangible evi-
dence of its interest. It ceased propaganda attacks
on Malaysian authorities and also suspended rebroad-
casts of antigovernment programs that had originated
from the clandestine "Voice of the Malayan Revolu-
tion" located in south China. Established in Novem-
ber 1969, the guerrilla radio station has been a major
irritant to the Malaysian Government, and Razak has
said that he will not consider diplomatic relations
with China until Peking halts its operations. Although
Peking radio resumed rebroadcasts of some antigovern-
ment programs in early 1971, this has been carried out
on a much more limited basis than before.
17. A more subtle, but in the long run prob-
ably more significant, indication of Peking's changing
attitude is the occasional Chinese practice of referring
to the country as "Malaysia" rather than "Malaya."
This suggests that China is moving toward acceptance
of the legitimacy of the postcolonial federation of
Malaya and the Borneo territories, thereby eliminating
an important obstacle to establishing official ties
with Kuala Lumpur. There have been recent direct
contacts between Peking and Kuala Lumpur; the Chi-
nese donated some $208,000 in flood relief last Jan-
uary; Malaysia granted permission for a tour by a
Hong Kong based Chinese Communist dance troupe, and
Kuala Lumpur opened a consulate in Hong Kong to fa-
cilitate commercial contacts with the mainland.
25X1
25X1
Approved For Release 2005/04/22 : - P79M00098A000200150002-2
 Approved For Release 2005/04/2gEqff 79M00098A000200150002-2
25X1
18. The most important step toward improvement
in Malaysian-Chinese relations was the recent ex-
change of trade missions. In May, the head of Ma-
laysia's state trading company led a delegation to
Peking, where they received a warm reception from
Chou En-lai; Chou reportedly even expressed a de-
sire to establish diplomatic relations as soon as
possible. When the Malaysians brought up the subject
of China's support of the terrorists in West Malaysia,
Chou carefully drew a distinction between government-
to-government and party-to-party relationships. Never-
theless, his audience came away with the impression
that, if diplomatic relations were established, Peking
might reduce its public support of the insurgents.
,19. The delegation's meeting with Chou also
touched on another matter affecting any future rela-
tions.--Malaysia's large Overseas Chinese population.
Kuala Lumpur has long feared that recognition of Pe-
king would increase communal feelings among the local
Chinese and encourage them to make more aggressive de-
mands for political power that is commensurate with
their economic influence. Chou reportedly said that
the younger generation of Overseas Chinese should
blend with their new societies and become loyal cit-
izens of the countries in which they live. Although
almost all Southeast Asian nations have an unassimilated
Chinese minority, Malaysia's problem is exacerbated by
the size of its Chinese population (some 38 percent of
the total) and the stranglehold it has on the Malaysian
domestic economy.
20. A sense of near euphoria was created in
Kuala Lumpur as a result of the successful China
visit. By early summer, however, the Malaysians
were worried that things were moving too quickly,
although Razak was quick to note that United States
moves toward accommodation with China confirmed the
correctness of his policy. Kuala Lumpur discovered
following the return visit of the Chinese trade dele-
gation to Malaysia in August, that earlier optimistic
reports about the size of China's planned purchase of
rubber were unfounded. This no doubt caused Razak to
wonder how accurate were the reports of Chou's new
"reasonable approach" to Southeast Asia.
25X1
Approved For Release 2005/04/2?'-1 A-`RD'79M00098A000200150002-2
 Approved For Release 2005/04/21ZF1i ri'9M00098A000200150002-2
21. Although, over the short term, Peking will
probably not discontinue all political and moral sup-
port for the Malaysian Communists, it is likely to
avoid direct propaganda attacks on Kuala Lumpur and
to press for more "people-to-people" contacts. Razak
does not have a completely free hand in dealing with
Peking. Some members of his own Malay party and of
the ultra-Malay opposition have criticized his re-
ceptivity to China's approaches. He has also agreed
to coordinate Malaysia's moves closely with Djakarta,
and the Suharto regime has recently voiced some con-
cern that Kuala Lumpur may be too trusting of Pe-
king's intentions.
Indonesia: A Legacy of Hostility
22. Peking and Djakarta have had no official
contacts since diplomatic relations were suspended
in 1967 following two years of bitter recriminations
by both sides and violent attacks on each other's em-
bassies. The focus of the hostility was on Indonesian
charges that China had played an active role in the
abortive Communist coup of 1965. The residue of
bitterness will not be easily overcome although there
are indications that China's attitude may have mel-
lowed. Peking has significantly reduced its propa-
ganda attacks against Djakarta, often not mention-
ing Indonesian affairs for several months at a time.
The Chinese have not totally discontinued official
criticism of the policies of what they call the
fascist Suharto clique, however; nor has Peking with-
drawn its political support of the now illegal Indo-
nesian Communist Party. Chinese media still give
coverage to attendance at Chinese celebrations by
Indonesian Communist leaders now living in exile in
Peking.
23. Djakarta is approaching relations with Pe-
king very cautiously; the Suharto government is divided
on the wisdom of resuming contacts. The predominantly
civilian Department of Foreign Affairs under Adam
Malik--mindful of Indonesia's basic nonaligned foreign
policy--believes relations should be resumed. Malik
25X1
25X1
Approved For Release 2005/04/2?~&R--U79M00098A000200150002-2
 Approv
feels that, in any event, Indonesia should not lag
too far behind other governments in patching up dif-
ferences with China. The military, which dominates
the government, has been reluctant to resume rela-
tions, largely for reasons of internal security.
The officer corps argues that, once relations are
restored, Chinese diplomatic and consular representa-
tives might resume active work among the Chinese mi-
nority resident in Indonesia and also might provide
covert: support to the proscribed Communist party.
Recently, however, President Suharto, backed by an
influential group of generals, has said that improved
relations with all Communist nations, including China,
are necessary to balance Indonesia's increased de-
pendence on Western aid.
24. Before Djakarta could agree to full resump-
tion of relations with Peking, it would insist that
China stop publicly vilifying the Suharto government,
cease itsblatant interference in the overseas Chinese
community and renounce itssupport for the illegal In-
donesian Communist Party. Despite these preconditions,
Indonesia has already made several probes of Peking's
attitude toward future relations. In early 1971, it
made indirect approaches through both Yugoslavia and
Romania. In September, direct contact occurred be-
tween an Indonesian intelligence official and the
publisher of a Chinese Communist newspaper in Hong
Kong. The Indonesian, who was acting on instructions
of both the Department of Foreign Affairs and his own
organization, had been authorized to discuss the re-
establishment of relations. The Chinese publisher,
in the past a reliable spokesman for Peking's views,
expressed China's interest in resuming ties with "all
countries of Asia, even those which are unfriendly."
25. The Chinese have apparently decided to adopt
a noncommttalattitude toward Djakarta while awaiting
further developments, both in Southeast Asia in gen-
eral and in Indonesia in particular. Vice Foreign
Minister Ch'iao Kuan-hua recently emphasized China's
"patience" in a conversation with the British charge
in Peking. Ch'iao said that China maintained a "pas-
sive position" with regard to relations with Asian
25X1
25X1
SECRET
Approved For Release 2005/04/22 : CIA-RDP79M00098A000200150002-2
 Appro
countries such as Malaysia, Singapore, and Indonesia--
that although China would welcome diplomatic relations
with them, it would not take the initiative. China,
he continued, would settle for trade relations if it
could not have diplomatic ties, or cultural exchanges
if it could not have trade. Despite Ch'iao's state-
ments, China clearly does not include Indonesia in
the same category as Malaysia and Singapore; having
little leverage in Djakarta, Peking harbors no false
hopes for an easy return to normal relations with
Indonesia.
Singapore: .Enough Chinese of Its Own
26. An unofficial and mutually profitable trade
relationship has long existed between Singapore and
Peking, but, in contrast to Malaysian leaders, Premier
Lee Kuan Yew has shown no interest in developing gov-
ernment-to-government trade contacts with China. He
refused, for example, to consider a visit by the Pe-
king trade delegation that went to Kuala Lumpur in
August. In October, a delegation from the Singapore
Chinese Chamber of Commerce went to Peking, but such
trips by private citizens are not new.
27. Peking's official attitude toward Singapore
remains ambiguous. In past months, it has launched
no direct propaganda attacks on the Lee government.
It did not even comment on Lee's May crackdown on
two Singapore newspapers, which he charged with ac-
cepting subsidies from China. By maintaining public
reticence about events in Singapore, Peking retains
flexibility to pursue relations with Lee should the
effort seem worthwhile.
28. The former hard-line approach toward Singa-
pore has not been completely forgotten, however. When
Singapore became independent in 1965, Peking declared
that diplomatic relations could not be established un-
til Singapore had proven its anticolonial, anti-im-
perialist position and had renounced relations with
Soviet "revisionists." This sentiment apparently
continues. Chou En-lai reportedly told the Malaysian
sir
25X1
25X1
Approved For Release 2005/04/22 : CIA-RDP79M00098A000200150002-2
 Approved For Release 2005/04/ (slkqP79M00098A000200150002-2
25X1
trade delegation last May that he distrusted Singapore,
which he said had "sold out to the imperialists" and
was still permitting the Americans and British to use
it for their own "imperialistic purposes."
29. Peking is apprehensive about growing Soviet
interest in Singapore and will certainly bear in mind
the possibility of increasing Russian influence in the
area as it shapes its own future policy toward Lee's
government. For the time being, Peking will probably
continue to develop trade and commercial relations.
China is already Singapore's principal trading partner
among Communist nations.
30. Lee Kuan Yew continues to view official
relations with China more suspiciously than his Ma-
laysian neighbors. He recently expressed the opinion
that Malaysia should be more cautious about dealing
with Peking. Singapore's population is almost 80 per-
cent Chinese. Although Lee has worked to infuse a
spirit of Singapore nationalism into his people, most
still maintain a strong sense of their Chinese iden-
tity. A permanent mission of the People's Republic
of China, he fears, would not only strengthen Chinese
cultural feelings but also might invigorate the mori-
bund leftist movement. Lee therefore would like to
delay as long as possible before establishing direct
relations. For domestic and foreign policy reasons,
however, he would not want to be left behind if he
perceived a general move among neighboring nations
toward rapprochement with Peking.
Thailand: An Overture Spurned
31. In recent months, Foreign Minister Thanat
Khoman has renewed his efforts, through Thai diplo-
mats in Europe and other intermediaries, to make con-
tact with Peking. The Chinese thus far have not re-
sponded formally to these overtures. They have made
clear in public and in private that any "favorable"
reply will depend on Thailand's relationship with
states considered "antagonistic" to China (the US
and USSR) and on the Thai role in the Indochina
war.
25X1
Approved For Release 2005/04/2 - 79M00098A000200150002-2
 Approved For Release 2005/04/2S131@i4EW79M00098A000200150002-2
25X1
32. Peking adopted an openly belligerent at-
titude toward Bangkok in 1965 in reaction to the
use of bases in Thailand for support, of increased
US military involvement in Indochina. The Chinese
increased their material support for the Thai Com-
munist movement and intensified propaganda attacks
on the Thai Government. Subsequently, whenever the
war took a new turn involving greater Thai participa-
tion, Peking tried to intimidate Bangkok by raising
the specter of an expanded, Chinese-supported Com-
munist insurrection in Thailand "in coordination
with the struggle of the three Indochinese peoples."
Indeed, in late 1967, the Chinese actively supported
the north Thai insurgents.
33. The issue of Chinese support for Thai in-
surgents, especially in the north, strongly affects
Bangkok's view of Chinese relations. Although, as
in Burma, the dissidence has an indigenous base, Pe-
king has provided ideological guidance for over-all
strategy as well as some. training, indoctrination,
funds, and materiel. Whether the Chinese exercise
dominant control over the north Thai insurgency,
however, is still unclear.
34. Within Bangkok government circles, the
leading advocate of accommodation with Peking has
been.Foreign Minister Thanat, but even he recognizes
that the existence of the Chinese-backed insurgency
makes it necessary for Thailand to remain wary of
Peking.. Prime Minister Thanom and his deputy Praphat
have thus far successfully argued for a wait-and-see
attitude with regard to diplomatic contacts with
China, in part on the grounds that more cognizance
must be taken of the insurgency and in part due to
worries about Thailand's Overseas Chinese community.
35. In the absence of any clear-cut response
from Peking to various Thai overtures, Bangkok is
uncertain about Peking's intentions and hesitates
to take any other positive steps of its own. Praphat
has said, for example, that approval of China travel
-15-
25X1
Approved For Release 2005/04/2 CTi -1 bT79M00098A000200150002-2
 Approved For Release 2005/04/ ,CIj -BEIP79M00098A000200150002-2
25X1
requests from Thai businessmen and parliament mem-
bers must await an assessment of Peking's behavior
as a UN member. He has also said that the Thai
Government will not consider any further approaches
to Peking until there has been clear evidence of a
decrease in China's support for Thai insurgents.
36. As long as the US maintains a significant
presence in Thailand, Peking is likely to maintain
an overtly hostile posture toward Bangkok and to
continue to assist the Thai insurgents. On the
other hand, the Chinese are probably prepared to
limit their support of the insurgents should Thai-
land's position change.
Philippines: Trade First, Then Talk
37. Over the past two years, the Philippines
has been examining possibilities for improving rela-
tions with the Soviet Union and East Europe, but it
has remained steadfastly aloof from official contact
with Communist China. Manila harbors strong fears
of potential Chinese subversion, despite the apparent
lack of Chinese interest in the islands and the pro-
tection provided by a buffer zone of hundreds of miles
of open sea.
:38. Recent American-Chinese contacts, however,
have altered Manila's perspective, and the changing'
international situation undoubtedly stimulated Presi-
dent Marcos' decision to permit an unofficial trade
delegation to visit Peking in early May 1971. His
lingering distrust of China was reflected in Marcos'
refusal to accord the delegation official status.
39. Chou En-lat.'s cordial reception of the trade
delegation and other gestures toward Manila are un-
doubtedly designed to encourage Filipino contacts.
Last November, for example, Peking offered--and Manila
accepted--$80,000 for typhoon relief. The Chinese of-
ficial media have contained no attacks on Marcos for
several years, and Peking has publicly taken a mod-
erate line toward the Manila government. A single
25X1
Approved For Release 2005/04/2FEm - 79M00098A000200150002-2
 Approved :or Release -
exception was a strong Peking attack on "reaction-
ary government authorities," because of the depor-
tation of two Chinese newspaper editors from the
Philippines in May 1970. In its propaganda, Peking
has tended to blame Japanese or American "exploita-
tion" and "plotting" for events in the Philippines.
Although the Chinese have provided some propaganda
support for the Philippines' Maoist dissidents, the
New People's Army, they have not funded a clandes-
tine radio station 'to support the movement and have
generally paid it less attention than the Malaysian
insurgency.
40. China seems content to have no official
political contacts for the moment. Chou's conversa-
tion with the trade delegation last May was appar-
ently devoted almost entirely to commercial matters,
in particular to China's desire to open direct trade
with the Philippines. Chou suggested that discus-
sions about the establishment of Filipino trade of-
fices in China could take place without additional
diplomatic or commercial arrangements. In September,
the first Sino-Philippine trade contract was signed
for purchases of Chinese rice and Filipino coconut
oil. No new political steps have been taken, how-
ever, nor has the volume of Filipino visitors to
China increased. Manila does not want to find it-
self one. of a small minority of states displaying
unyielding hostility toward Peking, but at the same
time it will not make any hasty moves toward accom-
modation. The Philippine leadership continues to
view its current approach as the best insurance
against Chinese support for local insurgents or sub-
version among the nation's distrusted Chinese minority.
41. Although China continues to support the
New People's Army with low-key propaganda, Peking
is also working to expand unofficial contacts with
the Filipino people in order to present a more
"reasonable" face and improve its standing with the
population as a whole. Peking's reasonable handling
earlier this year of the hijacking of a Philippine
Air Lines plane to China, for example, helped in this
direction.
25X1
25X1
Approved For Release 2005/04/
- P79M00098A000200150002-2
2-2
 Approved For Release 2005/04/W?R-R~79M00098AO00200150002-2
42. Peking has taken the official attitude that
it does not expect to achieve closer political rela-
tions with Manila in the near future. Chou En-lai
told the trade delegation in May that, while China
was "waiting with open arms" to establish diplomatic
relations, its leaders understood that Marcos needed
more time to reach a decision. China, according to
Chou, could wait. The Chinese expect domestic pres-
sures will push Marcos toward accommodation, and Pe-
king probably believes that moves toward a Sino-
American rapprochement will stimulate a favorable
readjustment in Manila's China policy.
43. Phnom Penh has also displayed some interest
in establishing a channel of communications to Com-
munist China. The new Cambodian leadership began
reconsidering its relations with China (and other
Communist countries) as early as the summer of 1970
when it began to realize that there would be no quick
or easy end to their war against the North Vietnamese.
44. At a high-level meeting called in mid-August
1970 to discuss possibilities for a "peace settle-
ment," Sirik Matak stated that China held the key
to peace in Cambodia. Although the Cambodian leaders
decided that it was too soon to make any significant
concessions to the Communists, it was agreed to send
an emissary--former prime minister Son Sann--to Paris
to take secret soundings among the "great powers."
In early 1971, Sann made several approaches to the
Chinese Embassy, but the Chinese were apparently
willing only to put him in touch with Sihanouk's
representatives.
45. China's reactions to Cambodian initiatives
are presently governed by Peking's decision to defer
to Hanoi's interests and to support Sihanouk's gov-
ernment-in-exile. China's policy in Cambodia is
determined by its desire to enhance China's influ-
ence in Hanoi, at the expense of the Soviet Union,
by supporting the North Vietnamese war effort. Be-
fore Sihanouk's ouster, the Chinese had acted as a
25X1
25X1
Approved For Release 2005/04/ - 79M00098AO00200150002-2
 Approved For Release 2005/04/2:POt79M00098A000200150002-2
25X1
broker, arranging the shipment of Chinese military
supplies and foodstuffs through Cambodia to Commu-
nist forces in South Vietnam and mediating differ-
ences between the Sihanouk regime and the Vietnamese
Communists. Cambodia's strategic relationship to
Vietnam was the fundamental consideration guiding
Chinese policy. If Peking could have reached a
satisfactory agreement with the post-Sihanouk gov-
ernment concerning continuation of aid shipments,
the Chinese might not have perceived any need to
give unqualified support to Sihanouk's government-
in-exile. Indeed, the Chinese Embassy reportedly
contacted the new Phnom Penh leadership immediately
following the March 1970 coup and offered to regard
the situation as an "internal affair" in return for
an agreement to permit the continued flow of sup-
plies to the Vietnamese Communists. Only after Phnom
Penh failed to respond to Chinese suggestions did
Chou En-tai explicitly endorse Sihanouk's efforts to
regain power.
46. The Chinese then began an all-out display
of support for Sihanouk. They helped arrange the
April 1970 Indochina Summit Conference held in south
China; issued continuing high level endorsements of
Sihanouk (including a rare public statement from Mao
himself); quickly recognized Sihanouk's Royal Govern-
ment of National Union; and, in August, signed a
military aid agreement with Sihanouk. Throughout
this period, the Chinese accorded Sihanouk full dip-
lomatic honors as chief of state and maintained
heavy propaganda barrages against the new government
in Phnom Penh.
47. President Nixon's announced intention to
visit China reopened the question of Phnom Penh.- Pe-
king relations. There are rumors in Phnom Penh that
"ping-pong diplomacy" is a prelude to a big power
settlement of the Indochina war. Some Cambodian
leaders clearly would welcome Chinese protection
against Cambodia's historic enemy, the Vietnamese.
The concept of benevolent Chinese intervention had
formed the cornerstone of Sihanouk's foreign policy.
On the other hand, Phnom Penh fears that Washington's
25X1
Approved For Release 2005/04/2 - 79M00098A000200150002-2
 Approved For Release 2005/04/2 J J BR79M00098AO00200150002-2
equities in South Vietnam and Laos will take precedence
over the maintenance of an independent, non-Commu-
nist Cambodia, and that the US might therefore
sanction a de facto--if not de jure--partition of
Cambodia as part of the price for a favorable settle-
ment in South Vietnam.
48. Despite these concerns, there is no evidence
that the Cambodian leadership has begun a serious
new effort to engage the Chinese in a dialogue. For
the moment, the government seems content with Ameri-
can assurances that Cambodia's interests will not be
sacrificed in any deal to end the war. Phnom Penh's
future policy toward China will continue to be con-
ditioned primarily by the pace and direction of the
evolving relationship between Peking and Washington.
The Calligraphy on the Wall
49. In the long memory of the Middle Kingdom,
Southeast Asian nations have been seen as buffers
for China's southern borders and expected to accord
proper deference to China. Chinese influence in the
area was interrupted by a brief century of direct
European interference, but with the dissolution of
the colonial empires and the rise of a unified and
self-reliant Chinese state, the old patterns are be-
ginning to reassert themselves.
50. China's recent admittance to the United
Nations serves as symbolic recognition of Peking's
return to the world stage and its potential for
playing a crucial role in Asian affairs. The states
of Southeast Asia realize, no matter how grudgingly
they acknowledge the fact, that they must reach a
working relationship with Peking. Thus far, however,
only Burma has managed to re-establish full diplo-
matic relations with China at the ambassadorial level.
51. Some Southeast Asian leaders have suggested
that nations in the area should devise a coordinated
approach to Peking. A conference of the members of
the Association of Southeast Asian Nations in Kuala
Lumpur this November will discuss regional diplomacy
25X1
25X1
Approved For Release 2005/04/2?~&k-RDP79M00098AO00200150002-2
 Approved For Release 2005/04gRP79M00098AO00200150002-2
25X1
with Peking. The association includes only five of
the areas' nations--Thailand, the Philippines, Ma-
laysia, Singapore, and Indonesia. Moreover, given
the different perception each of these has of its
own position, it seems unlikely that even they will
agree on a common blueprint.
52. Among the members, Malaysia shows the
greatest interest in pursuing new contacts with
China. As part of Kuala Lumpur's drive to achieve
a credible neutralist foreign policy, the government
wants to improve relations with all Communist na-
tions, but, until China makes at least some reassur-
ing gesture regarding its support for Malaysia's in-
surgents, it seems unlikely that full diplomatic re-
lations will be established.
53. Unlike Malaysia, Indonesia once exchanged
ambassadors with China, but the gulf of suspicion
which has separated the two nations since the 1965
Communist coup attempt makes any move toward Peking
much more difficult for Djakarta than for Kuala
Lumpur. Renewed relations must be preceded by an
accommodation between the desires of the foreign
office to reassert Indonesia's position as a champion
of neutralism and the army's fears of an increase
in Communist subversion. Singapore cannot long demur
if Malaysia establishes formal ties with China, but
Prime Minister Lee Kuan Yew obviously hopes that this
will not happen any time soon. Concerned about the
impact on Singapore's Chinese population, Lee would
prefer to restrict Singapore's contacts to commercial
relations, hoping to profit as an entrepot for China's
increasing world trade.
54. Thailand and the Philippines have been the
main promoters behind a conference on China policy,
possibly because they want to exercise a restraining
influence. Although Manila does not really face a
direct Chinese threat, President Marcos has found
his staunch anti-Communist, anti-Peking line a useful
domestic political tool and one he will not soon
relinquish. For the Thai, the potential Chinese
25X1
Approved For Release 2005/04/2 "CTA`-Rt3P79M00098A000200150002-2
 Approved For Release 2005/0421[P79M00098AO00200150002-2
25X1
threat is more immediate, both geographically and
psychologically. Bangkok's continued association with
a war against Peking's allies and its involvement
in Laos are real impediments to any major improvement
of relations, as is China's support for the Thai Com-
munist movement.
55. The course of the Indochina war is almost
certainly the determining factor guiding future
Cambodian and Lao relations with China. Laos is in
a much better position to adjust to the changing
role of the US because Souvanna has never turned
his back on Peking. The Cambodians, on the other
hand, must contend with the Sihanouk government in
exile, to which China has accorded full legal and
diplomatic status.
56. The stationing of a permanent Chinese mis-
sion at the UN cannot help but affect the process by
which Southeast Asian nations seek a rapprochement
with China, if only because all now have a central
point where they can contact Peking directly and
easily. Both the Philippines and Thailand, for ex-
ample, have already indicated that the UN might pro-
vide an opportunity for unofficial contacts with
China, contacts that would allow their diplomats to
measure Peking's current moods and intentions.
57. To a large extent, of course, the nature
and pace of Southeast Asia's approach toward China
must depend on Peking itself and how much importance
it attaches to improving relations with its neighbors.
The movement toward moderation in Chinese foreign
policy over the past few years, shows no sign of
waning. China's relations with the Thai and Cambo-
dian governments may be the only noteworthy exceptions
to this trend. The strong involvement of these
countries in the Indochina war and in areas of stra-
tegic importance to China complicates their situa-
tion. Elsewhere, the Chinese almost certainly will
maintain political ties and at least indirect sup-
port for the revolutionary groups it now supports in
Southeast Asia. At the same time, Peking will con-
tinue to develop a forthcoming approach and to make
limited gestures to the various governments.
25X1
Approved For Release 2005/04/2' : 1 l 79M00098AO00200150002-2
 Appr ed For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
$lecret
Secret
Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
 Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2
Next 1 Page(s) In Document Exempt
Approved For Release 2005/04/22 : CIA-RDP79M00098AO00200150002-2