CHINESE AFFAIRS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A000400010002-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 32
• Document Creation Date: December 12, 2016
• Document Release Date: December 31, 2001
• Sequence Number: 2
• Publication Date: February 18, 1975
• Content Type: NOTES

Approved Fo Release 2002/01/15 : CIA-RDP79TO08S,5A0004Q010.7 -6
No Foreign Diuem
tc3
5 r_-
IMFD~ HO
M
Chinese Affairs
Top Secret
February 18, L975
SC No. 00378/75
Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
 Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
110 Dissem Abroad
Background Use OnZ/ControZZed Dissem
Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 005827
Exempt from general declassification schedule
of E. 0. 11652, exemption category:
g 5B (1), (2), and (3)
A:itomatically declassified
on: Date Impossible to Determine
Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
 Approved Fo 131 I TC U 1V1 JeA?0865A000400010002-6
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
indivftdual articles.
CONTENTS
February 18, 1975
Foreign Trade in 1974 . . . . . . . . . . . . . . 1
Cracking Down in Kwangtung . . . . . . . . . . . 5
Old Wine in a New Bottle . . . . . . . . . . . . 8
Attacks on the Military Toned Down . . . . . . . 10
Wrangling with Moscow over Tokyo . . . . . . . . 14
Babies Are Peking's Business . . . . . . . . . . 17
The French Connection . . . . . . . . . . . . . . 23
Stalling on Relations with Lisbon. . . . . . . . 26
China Expands Civil Aviation . . . . . . . . . . 28
Economic Notes . . . . . . . . . . . . . . . . . 29
Approved For ReR 2R'IFS -CIiI1613-9-A0865A000400010002-6
 Approved For Release400f/o1P55 fL49Bg8, -Q0404110002-6
Foreign Trade in 1974
China's foreign trade boom fell victim in 1974
to the growing problems of the world economy. Total
trade increased only 27 percent, to roughly $12.5
billion, well below the 67-percent increase in 1973.
Most of the increase is attributable to higher prices,
with little or no growth in volume. Worldwide infla_.
tion pushed up China's import bill while the economic
slowdown in the West cut demand for Chinese exports,
resulting in the largest trade deficit in China's
history--perhaps $1 billion with the non-Communist
world, and despite a surplus with the Communist world,
about $750 million overall.
Despite these difficulties, China's balance of
payments is not in crisis. Reserves are well in excess
of the trade deficit, the level of foreign debt is
manageable, and Peking's credit rating is excellent.
China began taking steps to relieve the financial
squeeze last fall. Contracts for agricultural products
were deferred or cancelled. Fertilizer deliveries were
postponed. Peking also increased its use of short- and
medium-term credits and sold a portion of its gold
holdings.
Trade with the non-Communist countries posted
the largest gains, accounting for almost 85 percent c>f
China's total trade. Imports from the developed West
shot up to about $5 billion from $3.4 billion in 1973,
largely due to increased purchases of agricultural prod-
ucts and machinery. China's deficit with the developed
countries was roughly $2.5 billion.
Sino-Japanese trade jumped 50 percent, to over
$3 billion. China's imports, boosted by sizable deliv-
eries of machinery and equipment, exceeded exports by
February 18, 1975
25X1A
Approved For Release 20f2O16NDCUkBW9UMdk0400010002-6
 Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
TOP SECRET UMBRA
more than $500 million. China's exports of 4 million
tons of crude oil worth about $380 million more than
offset the decline in its traditional exports to Japan.
US-China trade totaled $922 million, a smaller
increase than anticipated at mid-year because China
cancelled contracts for US grain worth about $300 mil-
lion. Wheat, corn, cotton, soybeans, and other agri-
cultural products composed about 80 percent of total
US exports of $807 million. US machinery and equipment
exports rose as delivery began on equipment for the
ammonia plants purchased in 1973 and the second half
of the $150 million Boeing contract was completed.
Growing purchases of cotton textiles helped boost US
imports of Chinese goods to $1.15 million, up from $64
million in 1973.
US-China trade encountered several problems last
year. Chinese complaints over the quality of US grain
caused delays in wheat shipments and the cancellation
of soybean contracts. US controls on scrap steel ex-
ports prevented delivery on several contracts. On the
import side, shipments of Chinese shrimp were rejected
by the Food and Drug Administration, and the Chinese
at the fall Canton Fair were more vocal about the lack
of most-favored-nation status for their exports.
Purchases of agricultural products, machinery,
and transport equipment were largely responsible for
the growth of China's total imports. China contracted
for almost 10 million tons of grain in 1974, but ship-
ping delays and contract cancellations dropped actual
deliveries to just over 7 million tons, down from 7.7
million in 1973. Higher grain prices, however, pushed
the cost up to over $1 billion. Imports of soybeans and
cotton were up substantially from 1973. Machinery and
equipment imports rose sharply as large-scale deliveries
began on the $2.5 billion worth of whole plants and
other equipment ordered in 1973.
February 18, 1975
Approved Fc CReams/ ,ST 9T00865A000400010002-6
 Approved For Release-2012l3l/155 J fiR 9TyM0g4QAP10002-6
Peking signed contracts for $900 million worth
of whole plants in .1974--down from the record $1.2
billion level in 1973. Rapid inflation and tight
world credit markets, plus China's need for a breat.h?-
ing spell to absorb the large amount of technology
already purchased, were the major reasons for the
slowdown in purchases. Contracts worth $550 million
for the Wu-han steel rolling complex composed much
of the purchases, with the balance going for addi-
tional synthetic fiber, fertilizer, and electric-
power plants. Negotiations continue for a number of_
large plants, and new inquiries are being made for
additional facilities. In contrast to the whole-plant
program, major purchases of machinery and equipment:
in 1974 were off sharply from the record level of 1973.
China's exports rose by roughly $1 billion in
1974; petroleum accounted for almost half of the in-
crease. Sales of crude oil and petroleum products to
Japan, the Philippines, Hong Kong, and Thailand amounted
to about 4.5 million tons worth $440 million. Rice ex-
ports benefited from high prices, but other traditional
Chinese exports, particularly silk and cotton textiles,
faced declining demand. Late in the year, even petrco-
leum exports met with problems when Japanese buyers,
pleading full storage tanks, refused to take delivery
of 900,000 tons of crude oil under a 1974 contract.
The outlook for China's trade in 1975 is for
slower growth as Peking attempts to reduce its trace
deficit. Export growth will be small, reflecting poor
sales of traditional products at the 1974 Canton fairs
and recession-weakened demand in the West. An expected
doubling of petroleum exports may do little more than
offset the decline in other exports.
Imports of machinery and equipment will be sub-
stantial as large-scale deliveries continue on 1973
and 1974 contracts. The successful 1974 harvest and
February 18, 1975
Approved For Release 200210"1/1PC1'A'RD179TOD'8'65A~0400010002-6
 Approved ForRel~ase00W/Q1~15 ~IAiP79T00865A000400010002-6
declining textile exports will permit cutbacks in
grain and cotton imports. Other, less essential
imports will be curtailed and the pace of new plant
contracts may slow further.
Sino-US trade in 1975 will be down, perhaps to
less than $500 million. Recent cancellations of con-
tracts for US wheat and possibly cotton will severely
curtail US agricultural, exports unless large purchases
are made later this year. (CONFIDENTIAL)
25X1A
February 18'., 1975
Approved Fort 4 as i fi/ 5 . 9T00865A000400010002-6
 Approved For Releas 003%-PiL f P 9TYA0X04QDO10002-6
Cracking Down in Kwangtung
Kwangtung leaders have finally cracked down on
protesting workers and youths, ending the periodic
disturbances that have plagued Cantor since last fall.
Demobilized soldiers employed as factory workers have
been protesting discrimination in wage and bonus poli-
cies. Youth have been lashing out at the down--to-tfte-
countryside program and the limited job and educatiDnal
opportunities afforded them. (See Chinese Affairs, De-
cember 9, 1974.)
25X1A
After a clash in late November between protest-
ing workers and Canton garrison troops, Kwangtung
party boss Chao Tzu-yang banned all further demon-
strations and stationed militia units in each street
to maintain order. The militia enforced new restric-
tions on poster criticisms, updated street registers
to nab youths dodging the down-to-the-countryside
program, and conducted criticism sessions for the
most vocal dissidents. A program of study sessions
for the city's workers was instituted, and on January
15 the demobilized soldiers issued a statement pledcx-
ing to comply with party policy and end all wage protests.
Until the November incident, Kwangtung authorit:..es
had been steering a middle course, attempting only :o
reason with the unhappy workers and keep their demon-
strations orderly.
One reason Kwangtung did not adopt a "get tough"
attitude earlier was because there was no consistent
signal from Peking on how to deal with the problem.
Despite the general emphasis in the national media
since July on law and order, some articles seemed to
sanction resistance to local authorities. Some moder-
ates in Canton apparently also believed that the pro-
testers had the support of Chiang Ching and other rad--
cals in Peking.
February 18, 197;
-5-
Approved For Release 20 W/19F F W79W ,4&0400010002-6
 Approved Form[ s?Off/1,5 LgPRT00865A000400010002-6
Peking finally clarified its position last week
in a People's Daily editorial and a series of arti-
cles in Red Flag, the party's theoretical journal.
The articles struck out at workers, among others, who
are corrupted by capitalist ideas and are in danger
of succumbing to a "bourgeois lifestyle." The arti-
cles made it c'ear that future disturbances or work
slowdowns would not be tolerated.
Now other provincial leaders are likely to move
to clamp down on their dissidents. Worker and youth
problems have been widespread, and many areas have
experienced an increase. in crime. Ningsia and Yunnan
have also had problems with their Muslim minorities.
Many middle-level cadre may find the People's
Daily editorial and the Red FZag articles unnerving,
since much of the tough language condemning bureau-
cratic behavior could easily be directed against them.
Cadre morale problems have been aggravated by the anti-
Confucius campaign.
According to Kwangtung leaders were
disturbed to find in the course of their investigation
into the protests that many party cadre and "progres-
sive workers and youths"--?not just the usual rowdies
and malcontents--were deeply involved, A plot by 20
factory cadres to escape to Hong Kong with the assist-
ance of some militia members was discovered, according
to A Public Security cadre reportedly
was among those who put up posters under a pseudonym
attacking everything from special privileges to the
sanctity of Mao's thought.
Although apparently successful in curbing expres-
sions of worker and youth discontent, leaders at all
levels have been slow in coming to grips with its
causes. however, indicates
February 18, 1975
Approved Forltie71aseh6d.R&/1I M-I & 419TO0865A000400010002-6
 Approved For Re1ftMe 2002 SECIET UMBRA A(~p,p400010002-6
that an effort may be under way now. In at least
one factory, promotion and job opportunities for
junior workers have been improved, and workers
even expect a wage increase for apprentices and
lower grade employees "in the near future." (SE-
CRET NO FOREIGN DISSEM)
February 18, 1975
25X1A
Approved For Relea4e082,?]RQ$RDT-RkMIE(j?)$' 5A000400010002-6
 Approved For' Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
TOP SECRET UMBRA
25X1A
Vice Foreign Minister Han Nien-lung apparently
has replaced, at least temporarily, Vice Foreign
Minister Yu Chan as chief Chinese negotiator in the
Sino-Soviet border talks.. Han greeted Soviet ne-
gotiator Ilichev on his arrival at Peking airport
on February 12, and a Tass dispatch termed Han the
new head of the Chinese delegation.
Peking has not announced Yu Chan's whereabouts,
but a Yugoslav press service ascribed Yu's six-week
absence from public view to illness. Yu has been
in charge of Soviet and East European affairs in
the Foreign Ministry for some time, and the Yugo-
slavs could well be informed of his situation.
Han, who is the senior vice foreign minister,
led the delegation for a brief period beginning in
late 1971 when Chiao Kuan-hua, who was then chief
negotiator and is now foreign minister, left to
lead the newly admitted Chinese delegation to the
UN General Assembly. Yu Chan took over in the
spring of 1972 following his promotion from de-
partment head to vice minister in the Foreign
Ministry.
In the past, Peking has consistently rejected
Soviet proposals to hold the talks at the expert
or working level, insisting that the permanent heads
at the vice minister level be present. Thus, Han--
who has long been associated with Asian affairs
and has had very little to do with the USSR--may
again be filling in temporarily, as he did in 1971-
1972, until Yu Chan returns or another official of
suitable experience and rank is available.
February 18, 1975
Approved For RefoX 2C@LUQJJ, FI PT A0865A000400010002-6
 Approved For Reuse 2002/01/15: CIA-RDP79T00865AQ P400010002-6
TOP SECRET UMBRA
Han's tenure as chief Chinese negotiator, how-
ever long it lasts, almost certainly has no bearing
on Peking's negotiating position. The Chinese have
made it clear publicly and privately that they are
in no mood to strike a deal with Moscow. Indeed,
Peking may even have signalled that its attitude
toward a settlement has hardened. After years of
public silence, China has recently presented its
terms for a border agreement on three occasions--
the last in Chou En-lai's NPC speech--conditions
that the Chinese first tabled in late 1969 and that
the Soviets have subsequently rejected several times.
(CONFIDENTIAL)
25X1A
February 18, 1975
Approved For Relea' 'OF029 1MISfF-F49 RDA@5A000400010002-6
 Approved Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
'FOP SECRET UMBRA
Attacks on the Military Toned Down
Peking's :Annual "support the army" circular,
which routinely calls on the citizenry to support
the military and enjoins the armed forces to cherish
the government and the people, has often been a
yardstick to measure the army's political standing.
In Lin Piao's heyday, the army was praised as a
"pillar of the proletarian dictatorship," but such
praise has not been used in the circular for the
past two years. This year's edition gives some strong
hints as to the course that party-army relations
will follow in the short term, but, like many of-
ficial pronouncements in China, the message is ex-
pressed more by what is left out than by what is said.
Because the circular is such a bland and non-
committal document, it suggests that civilian mod-
erates in Peking prefer to avoid an open confronta-
tion with the military, at least for the moment.
This does not mean that efforts to reduce the po-
litical power of the People's Liberation Army will
be phased out, but only that civilian authorities
apparently believe direct and less visible tactics
may prove more successful over the long run.
Each province, military region, and military
district usualLy issues its own circular. The first
circular issued by a military region contained an
outspoken call for army obedience to party authority,
and appeared to be a continuation of Peking's rela-
tively hard line attacks on military political
power. This document, broadcast in the Tsinan Mil-
itary Region on December 16, said that military
headquarters and units must: "regard themselves as
departments of military affairs of local party
committees at the same level" and consciously accept
the leadership of these committees. Moreover, the
February 18, 1975
-1.0-
Approved For Rele JOO JP11ECIA- R(S65A000400010002-6
 Approved For RelezMe 2002/01/15 : CIA-RDP79T00865A0000010002-6
TOP SECRET UMBRA
Tsinan circular stated that field armies must accept
the leadership of the provincial party committees, a
new theme obviously aimed at strengthening party au-
thority over a rather hard-to-reach group--troops in
the field.
Since the Tsinan statement turned out to be the
most far-reaching issued by any military region, it
may have been a trial balloon. The circulars issued
by other military regions varied significantly.
Some supported Tsinan by ordering units under their
command to "obey" party authorities, but others
said only that it was necessary to "respect" local
party committees. A few regions did not comment
at all on this subtle but sensitive difference.
When Peking issued its circular, it also ducked
the issue. Moreover, the circular was broadcast on
January 31, almost a month later than in the past
three years, when Peking's issuance usually set the
tone for the provincial circulars which followed.
Resistance to the extreme position taken by Tsinan
was almost certainly the major reason why Peking
did not follow up on the issue, and appears to
explain why Peking's circular was so late.
Provincial radiobroadcasts seem to reflect the
obvious lack of accord. Some broadcasts extol mil-
itary units that have sought guidance from party
and government authorities, but the theme has not
been heavily stressed.
There are other straws :in the wind. On February 3,
Shantung reported that Tsinan Military Region com-
mander Tseng Ssu-yu "presided over" a rally to transmit
the results of the National People's Congress and the
party plenum that preceded it. The rally was co-sponsored
by the provincial party committee and the party com-
mittee of the Tsinan Military Region. It is not unusual
for lower ranking leaders to preside over rallies,
and provincial party first secretary Pai Ju-ping,
a civilian, was present and gave the major address.
February 18, 1975
-11-
Approved For Releas`f'@W/ % , RTM 8A5A000400010002-6
 ApprovedIPbr Release 2002/01/15 : CIA-RDP79 0t 65A000400010002-6
TOP SECRET UMBRA
Since Tseng is not known to hold a provincial
party post, his prominence may be explained by the
fact that the rally was co-sponsored by the Tsinan
Military Region party committee, on which he does
hold a high post.. Nonetheless, it is highly unusual
for a military region commander to preside over a major
political rally. Since Tsinan was the author of the
most anti-military "support the army" circular, Tseng's
prominent appearance is especially important. There
are at least two plausible interpretations.
One explanation is that Peking is indicating
support for Tseng because of his willingness to go
along with efforts to reduce the political power of
provincial military men. The other is that Peking is
tacitly admitting that--for the moment at least--it
has failed to force its will on provincial soldiers.
Tsenq's role at. the Tsinan rally may indicate that
an olive branch is being offered to the military,
and that the relatively harsh tactics pursued by
Peking prior to the National People's Congress are
no longer in order.
In any event, in the short term Peking is appar-
ently soft-pedaling direct attacks on the military.
Articles attacking Lin's erroneous military line are
becoming less frequent, for example..
The door has by no means been closed, however,
to a resumption of confrontation tactics at a later
date. Recent Rd Flag and People's Daily articles
calling for continuing efforts to strengthen the
dictatorship of the proletariat emphasize that class
enemies still exist "within the party" and that these
enemies tend to collude with, foreign revisionists.
Persons such as Peking Military Region commander Chen
Hsi-lien were attacked through historical analogy on
precisely these grounds as recently as last fall.
February 18, 1975
w12-
Approved For Re(a 0gfe 5E,VAt~fftff (ge865A000400010002-6
 Approved For Release OQ2 3j 1 SECRET RDP79T00UMBRA 4Q2P10002-6
The potential danger of this line of attack
has certainly not been lost on interested parties
involved in the debate that preceded the National
People's Congress. A Peking domestic broadcast on
January 27 recounting the activities of an anti-
chemical-warfare unit in Chekiang--a unit that has
been closely associated with Chiang Ching in the
campaign to criticize Lin and Confucius--noted
that criticism of Lin's military line "is by no
means aimed at investigating the individual's
personal responsibility." This suggests that the
political left sees dangers in unbridled attacks
on military figures, some of whom probably have
recently had a working relationship with the ide-
ologues.
Peking will probably continue its carrot-and-
stick approach to the military, using pressure and
persuasion to ease soldiers out of party posts.
For those who see the light, there may be rewards.
Chang Chung, who became military district commander
in Kansu during the Cultural Revolution, is
still the top-ranking party secretary there. Chang
was recently ranked ahead of three newly identified
secretaries, at least two of whom are civilians.
Chang's military title has not been mentioned
publicly since October 1973, however, and he may have
taken off his uniform in order to hold onto his party
job. It is possible that.a number of provincial lead-
ers with military backgrounds will follow this same
course. Some military men may be persuaded to go the
other way. Wuhan Military Region commander Yang Te-
chih, for example, appears to have dropped out of the
running for a top party post. in Hupeh. Yang had
headed some turnouts in which party and military
leaders were lumped together, but in late January he
was listed with his military title and apart from
provincial party leaders. (CONFIDENTIAL)
February 18, 1975
Approved For Release VQ)101/SE(M'P'(R KBA000400010002-6
 Apprdft For Release 2002/01/15: CIA-RDP79T00865A000400010002-6
TOP SECRET UMBRA
Wrangling with Moscow over Tokyo
Chinese Ambassador Chen Chu's return to Tokyo
on February 5, after a week of consultations in
Peking, touched off a spate of pessimistic rumors
in Tokyo about prospects for the proposed Sino-
Japanese peace and friendship treaty. Although
the Chinese have yet to spell out positions on
specific issues that are likely to come up in the
treaty negotiations, the Japanese press has specu-
lated that Chen brought back a hard line from Peking.
Much of the rumormongering in Tokyo apparently
stems from a concerted Soviet effort to slow the
quickening pace of closer Sino-Japanese ties. Last
week, Soviet Ambassador Troyanovsky delivered a
letter from Party chief Brezhnev to Prime Minister
Miki proposing that talks on a Soviet.-Japanese
friendship treaty begin soon. Troyanovsky earlier
made highly publicized representations to Liberal
Democratic Party (LDP) and government leaders in
Tokyo, suggesting that agreement on the treaty with
Peking would have an undesirable influence on Tokyo's
relations with Moscow. According to
the Soviets also provided pro-Taiwan e e-
ments in the LDP with arguments against the proposed
peace treaty and leaked distorted accounts of Foreign
Minister Miyazawa"s recent meeting with Gromyko in
Moscow.
The Chinese response to Soviet "meddling" has
been sharp, reflecting the urgency Peking attaches
to reinforcing Sino-Japanese relations with the
peace treaty. Both NCNA and the PRC--owned Ta Kung
Pao in Hong Kong ran lengthy attacks on the Soviets
for their "interferences" in Japan's internal affairs.
The NCNA account argued that Moscow's concern over
the Sino-Japanese treaty was a sinoke4screen to cover
the Soviets' "illegal occupation" of Japan's northern
February 18, 1975
25X6
-14-
Approved For , 1epe t2A 1- .: tt~ 7AT00865A000400010002-6
 Approved For Releas Q.Q CWl C, f7 UMBRA04~,010002-6
territories. Other Chinese press reports have
recounted alleged Soviet mistreatment of Japanese
fishermen in that area. NCNA has also continued
to broadcast accounts claiming widespread popular
support in Japan for the treaty with China.
Both the Japanese and Chinese appear to be
approaching the treaty negotiations with confidence
that it can be concluded quickly. Both sides
have agreed not to bring up the potentially con-
tentious territorial questions of Taiwan and the
Senkaku Islands until after the peace pact is signed.
No other important unresolved bilateral issues ap-
pear likely to slow agreement on the treaty. Poten-
tial problems raised by the Japanese press--such as
the earlier peace agreement reached between the
Japanese and the Chinese Nationalists, or the
existence of implicit anti-Japanese language in the
1950 Sino-Soviet friendship treaty--are molehills
that are not likely to become mountains. Explana-
tions for Peking's sharp reaction to Soviet attempts
to exacerbate relations between Tokyo and Peking,
therefore, must be sought elsewhere.
There are signs that at least some Chinese
leaders believe the new Miki administration will
not hold firm over the long term to the general
foreign policy lines laid down by former prime min-
ister Tanaka, especially regarding Japan's good
relations with China and the US. Liao Cheng-chih,
chairman of Peking's Sino-Japanese Friendship As-
sociation, told a visiting Japanese in late De-
cember that the "pro-Soviet tendencies" of some
important members of the new administration in
Tokyo made it impossible for China to be as trust-
ful of Miki as it had been of Tanaka. Liao said
that the LDP was riddled with pro-Soviet elements
on the one hand and with Taiwan "lobbyists" on the
other. Liao also expressed concern that relations
between Japan and the US would decline under Miki
February 18, 1975
Approved For Release 2#QP/$ (K;R-RQP7@JI ]WiA00400010002-6
 Appro4ft For Release 2002/01/15 : CIA-RDP79 00865A000400010002-6
TOP SECRET UMBRA
and that Japan would make irrevocable concessions,
especially on the northern territories issue, in
order to improve relations with the Soviets.
If these fears of long-range Japanese foreign
policy instability are genuine--and they probably
are--it would be to Peking's advantage to obtain
Mi_ki's commitment to continue the momentum of im-
proving relations with the PRC as quickly as possi-
ble. Institutionalizing close Sino-Japanese relations
through a peace and friendship treaty would be a
major step in that direction.
Successful conclusion of the treaty would also
cast into sharp relief Peking's rapid progress in
developing closer ties with Tokyo over the past
two years, while pointing up Moscow's relative
lack of movement since it opened relations with
Tokyo in 1956. The Soviets' recent clumsy attempts
to create irritants in Sino-Japanese relations
presented Peking with an ideal opportunity to make
this point. Virtually all of the Chinese press
attention to the Soviet campaign has focused on
issues unrelated to the treaty negotiations--such
as Soviet "hegemonism" in. the Pacific and Soviet"
"bullying" of the Japanese. (SECRET NO FOREIGN
DISSEM/CONTROLLED DISSEM)
February 18., 1975
-16-
Approved Fort s 002~0t1 fr : e, 74T00865A000400010002-6
Fr_
 Approved For Release'l0qR(0 15,~JNpN9TQ }(0A04WO10002-6
Babies Are Peking's Business
Since the beginning of February, several prov-
inces have referred to "recent" instructions from
Peking regarding birth control. Late last year, pro-
vincial broadcasts mentioned a national conference on
planned parenthood. The latest instructions from the
center on this issue undoubtedly grew out of last
year's conference.
In November, that
Directive 27 from the Central Committee listed a pa-r--
tial agenda for the National People's Congress. In-
cluded on the agenda was a reaffirmation of the strin-
gent birth control policies that have been in effect
for the past two years. These measures include the
promotion of late marriage by denying permission to
marry if the couple has not reached the stipulated
age, reportedly over 27 for men and over 25 for women.
An even harsher measure to control population growth
is to deny food-ration coupons for a fourth child.
dicate that medical teams have been sent to rural
areas, where birth control measures have met with lm--
ited success, to perform compulsory sterilization on
couples with three children. These forceful measures
apparently are less necessary in urban areas because
the more sophisticated city dwellers have been more
cooperative in following birth control policies.
Objections to stringent birth control measures
surfaced in broadcasts from Kiangsu Province during
the summer of 1973, but while these measures probably
remain unpopular in the rural areas, no further com-
plaints have appeared in provincial propaganda. When
the public objections were first raised, it was thought
February 18, 1975
25X1A
25X1 C
25X1 C
Approved For Release 20f /1fDBfL44&'f79 db0400010002-6
 Approve
fPA9T00865A000400010002-6
Fo"1 C1"S819.J#19i f 1T is
that then Kiangsu party boss Hsu Shih-yu, a mili-
tary man and member of the Politburo, was behind
them. In any event, the complaints have evidently
had no impact on Peking's determination to slow
the growth of China's enormous population.
Another vehicle used by the government to empha-
size the importance of birth control was the creation
in September 1973 of a special birth planning group
under the State Council. Until that time, birth con-
trol came under the auspices of the Ministry of
Health. The birth planning group has not been men-
tioned publicly since 1974, however, and none of the
other groups under the State Council have been re-
ferred to in Chinese propaganda since the National
People's Congress.
With the emphasis on sound economic planning in
Chou En-lai's speech at the National People's Congress,
Peking obviously is anxious to prevent the growing pop-
ulation from eating up future economic gains. Logi-
cally, one way to drive home the importance of birth
control to the re:Luctant rural population would be to
maintain the birth planning group as a separate entity,
with its previous special status. Regardless of
whether Peking does in fact resort to this system, it
is clear that firm, often mandatory birth control meas-
ures are here to stay. (SECRET NO FOREIGN DISSEM)
February 18, 1975
Approved Fogs fhs8 ,q0,
RCRIP Lgj*jB A9T00865A000400010002-6
 25X1D Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
Next 3 Page(s) In Document Exempt
Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
 Approved For Refe DORMP -%M_t1R(A65 0400010002-6
France and China apparently have agreed in
principle on a visit to Paris this spring by Vice
Premier Teng Hsiao-ping. No official announcement
has been made, but French diplomats and correspond-
ents have been freely spreading news of the trip for
some time, and Peking has not discouraged this ac-
tivity.
Teng would be the most senior Chinese official
to visit France; the foreign and foreign trade
ministers have made official visits to Paris, but
Peking has not reciprocated President Pompidou's
trip to China 18 months ago.
This would be Teng's first state visit since
his rehabilitation almost two years ago, and thus a
feather in France's cap that does not seem entirely
warranted by the state of Sino-French relations or
by the importance of Paris to Chinese policy. The
joint communique following Pompidou's trip reflected
sharp differences over French detente with the USSR
and over Chinese views on European political, eco-
nomic, and military cohesion. For some time, Peking
has been dismayed over displays of French independ-
ence in Atlantic alliance affairs, which the Chinese
believe give Moscow comfort. Teng, who was in Paris
last April en route to Peking from a special UN ses-
sion, passed up an opportunity to attend Pompidou's
funeral, leaving China under-represented.
More recently, the French have indicated dis-
pleasure at Chinese slights. According to-
retired French Ambassador Manach
left Peking last week disappointed, baffled, and
disillusioned that relations have not improved
measurably since mid-1973. In Manach's view, no
25X1A
25X1 C
February 18, 1975
Tip Cdr
?- 2 T
&
Approved For Relea'sP'~00~181M
.
-
5A000400010002-6
 Approved F ele"P2~O~J f4_RM7 0 000400010002-6
improvement ao ears imminent. According to
25X6 the Chinese appear
less and less interested in France, believing that
Mediterranean countries have no capacity to play an
important role in international politics.
Judging from the Chinese press in recent months,
however, Peking has found the policies of President
Giscard increasingly compatible with Chinese inter-
ests. NCNA has provided favorable coverage of the
redeployment of French naval forces to Mediterranean
ports, Frances pro-Arab policies, Giscard's proposals
for a petroleum producer-consumer conference, and Gis-
card's summit meetings with other Western leaders,
which produced declarations supporting European soli-
darity. The Chinese press also heavily stressed Gis-
card's public statements on Brezhnev's recent visit,
ascribing anti-Soviet motives to French defense policy.
Nevertheless, all signs point toward a relatively
uneventful visit for Teng. He will almost certainly
press Peking's well-known views on European security.
Teng may also explore further Chinese purchases of
French military hardware. Peking has recently re-
ceived a consignment of French helicopters, and there
have been hints in the past that a deal involving
other French aircraft has been discussed. Economic
ties are unlikely to be high on Teng's agenda. Al-
though France: has been an important Chinese trade
partner, Manach reportedly complained that Peking now
looks to West. Germany as the key European country for
China's trade.
Teng's visit probably should be viewed as symbolic
of China's continuing emphasis on Europe. For both
domestic and foreign policy reasons, Peking increasingly
portrays Europe as the focus of Soviet policy as well
as of the US-USSR contest for world influence. While
Teng might have scheduled countries of more importance
to China's European policies--the UK and West Germany,
February 18, 1975
25X6
-24-
Approved For RelelOk0iW1.&-T "E-F M&0U5A000400010002-6
 Approved For R altdo(02 oRp RQPM(R>KSAQW400010002-6
for example--protocol mandates that a Chinese of Teng's
stature visit only Paris. He could still, however,
make other stops that are as yet unannounced. Bonn,
Rome, and Brussels are unlikely stops since West Ger-
man Chancellor Schmidt is due in China sometime this
year, and visits by the prime ministers from Italy
and Belgium are scheduled for the next several weeks.
(SECRET NO FOREIGN DISSEM/NO DISSEM ABROAD/BACKGROUND
USE ONLY/CONTROLLED DISSEM)
25X1A
February 18, 1975
Approved For ReIe Q200?f@U-RD IAO%65A000400010002-6
 Approved Re1eMjPC?Vff--M7_O0865A000400010002-6
Stallin on Relations With Lisbon
Peking is keeping a close eye on the political
complexion and foreign policies of the government in
Lisbon as the Chinese edge gingerly toward diplomatic
recognition.
The provisional Portuguese government has satis-
fied demands made by Pekin
that Lisbon di-
vest itse of overseas possessions particularly in
Africa. With virtually all. former Portuguese colonies
now independent or headed toward independence, the
Foreign Ministry in Lisbon made a strong bid for early
Chinese recognition. In a formal statement on Janu-
ary 6, Lisbon recognized Peking as the sole and le-
gitimate representative of the Chinese people; ac-
knowledged that Taiwan was an integral part of China;
and proposed that the two governments agree on a time
for negotiations on the status of Macao. Three weeks
later, Lisbon officially asked the Nationalist Chinese
charge to close his mission and leave Lisbon by late
March.
The Chinese response to Portugal's initiatives
was cold, some hat evasive and disappointing to Lisbon.
Peking answered at the level of "Foreign Ministry
spokesman"--one notch below Lisbon's January 6 note.
The Chinese statement received limited publicity and
apparently was riot broadcast by NCNA. The Chinese
note said that Peking had taken note of Lisbon's
pronouncement, which "'merits a favorable reception,"
but that "a difference" remains between Peking and
Lisbon on the Macao question. No further movement
toward normal relations has emerged since Peking's
statement.
The Chinese reaction clearly was a dodge. Peking
is in no hurry to regain control of 11acao, which it
considers Chinese territory "temporarily" occupied by
February 18, 1975
25X1 C
Approved For Rele@~ 0;' "R:EI-Fi3Nft"5A000400010002-6
 Approved For RW"IOOS/jRIMVi4- -R(gt65;QW0400010002-6
Portugal., because of the implications such a move
would have for its more important interests in Hong
Kong and Taiwan. Peking has always insisted that
it., not Lisbon, would determine when and how Macao
will return to the Chinese fold. Lisbon, moreover,
has satisfied Peking's earlier, long-standing terms
for a strong Chinese voice in the administration of
Macao. The Chinese press has also fully reported
Portugal.'s divestiture of its African colonies and
their moves toward full statehood.
Peking appears to be biding its time on recog-
nition until the Chinese obtain a clearer reading
of the policies of the new government in Lisbon.
While reporting Portugal's decolonization fully,
NCNA has been reticent in reporting internal polit-
ical developments in Portugal, and the Chinese press
has refrained completely from editorial comment.
According to
was too early to predict the establishment of Sino-
Portuguese ties. Ho said that, in his view, Peking
would not recognize Lisbon if a Communist-dominated
government came to power because of the Portuguese
Communist Party's close ties to Moscow.
Peking's decision to recognize, thus, may be
some distance off. Portuguese elections are sched-
uled in mid-April for a constituent assembly whose
sol.e function will be to draft a new constitution.
The Communists are unlikely to win a majority.
Even if the Communists do poorly in this or
subsequent elections, Peking's attitude toward rela-
tions is likely to hinge on the new government's
policy regarding the Western alliance, particularly
continued NATO and US use of defense facilities on
Portuguese soil, and the character of Lisbon's ties
with Moscow. (SECRET NO FOREIGN DISSEM/NO DISSEM
ABROAD/BACKGROUND USE ONLY/CONTROLLED DISSEM)
25X1 C
25X1A
 Approved F r elea ,02 Q f-F10MJTk065A000400010002-6
China Expands Civil Aviation
A runway now under construction at Peking air-
port is the latest development in a program aimed at
modernizing civil aviation. Peking recently has put
much emphasis on the expansion of its civil air sys-
tem, both to improve air transport of cargo and pas-
sengers and to hell? in its diplomatic offensive.
China now has more than 90 domestic routes con-
necting over 70 cities and 7 international routes.
Three of these have opened since September. There
are now seven international airports in China, four of
them able to handle large passenger jets; a continu-
ing construction p:Lan will expand airport services
throughout the country.
Peking airfield currently is the priority con-
struction tarclet. Besides new runways, plans include
a new terminal.. building, a. hotel for transport pas-
sengers, and new flight control facilities.
The mainstays of the domestic fleet are the 31
AN-24s and 45 IL-14s. The intercontinental routes
are flown by 10 Boeing 707s, 5 IL-62s, and 5 British
Tridents. More than 30 Tridents are on order, but
the number earmarked for the civil air sector is un-
known. Aircraft inventories like the ground facili-
ties are continually being modernized and expanded.
(SECRET NO FOREIGN DISSEM/WARNING: SENSITIVE SOURCES
AND METHODS INVOLVED)
February 18, 1975
25X1A
-213-
Approved For Rele Ibo$,EQ& cTA-k T fb&65A000400010002-6
 Approved For F '.e 0:g(P(' R. -F 0A65AQ@0400010002-6
Plans To Expand Shipping
The Japanese.role in Chinese shipping-expansion
plans is increasing. Following the shipping agree-
ment reached between the two countries in November,
representatives from three major Japanese shipping
companies visited China last month to discuss in-
creased container and liner service.
Two of the three companies offered technical as-
sistance to foster the development of containerization
in the China trade. The Chinese already send some con-
tainerized exports to North America on Japanese ships,
and they will eventually extend this service to Europe
and Australia.
The third Japanese company disclosed that a new
liner service, employing a Chinese combination pas-
senger-cargo ship, will soon begin on a regular basis
between China and'Japan. (UNCLASSIFIED)
Ship Registration
China's ship registration may be affected by
Somalia's decision to rescind its policy of register-
ing ships under foreign control.
Whale most foreign shipowners register ships in
Somalia to reduce crew and insurance costs, China
uses the Somali. flag to circumvent port restrictions
in countries where Chinese-flag ships are prohibited.
Many countries have relaxed port restrictions against
Chinese ships, however, so Somalia's new policy will
hasten a shift to Chinese registration.
February 18, 1975
25X1A
25X1A
25X1A
Approved For Relea5PB0?0185?~TA-RDP45A000400010002-6
 Approved Fir ReIe 00c3 Q ' EqA - 0 865 4000400010002-6
China's Hong Yong shipping companies currently
operate a fleet totaling 1.5 million deadweight tons
under the Somali flag. (CONFIDENTIAL)
Integrated Circuits
China apparently is interested in purchasing
large amounts of US equipment to establish a turn-
key integrated circuit. plant. Integrated circuits
are the basic component used in the manufacture of
modern electronic equipment.
The fact that the Chinese are seeking equipment
from the US rather than from Japan--the main supplier
to their semiconductor industry in the past--suggests
that Peking is interested in the most advanced inte-
grated circuit production manufacturing and tech-
nology available. Advanced types of circuits are
crucial to the development of high-speed computers
and sophisticated military electronic systems. (CON-
FIDENTIAL)
February 18, 1975
rip er-x+300-? Ti~~d
Approved For Rein`2063t09'/ r'IAT--~f~~ P 40%865A000400010002-6
25X1A
25X1A
25X1 D
 25X1D Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
Next 2 Page(s) In Document Exempt
Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6
 Approved Fors (ease 2002/01/15: CIA-RDP79T0086 000400010002-6
Top Secret
Top Secret
Approved For Release 2002/01/15 : CIA-RDP79T00865A000400010002-6