CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A022600070001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 15, 2016
• Document Release Date: October 3, 2003
• Sequence Number: 1
• Publication Date: August 24, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
State Department review completed N2 41
24 August 1972
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No. 0203/72
24 August 1972
Central Intelligence Bulletin
CONTENTS.
VIETNAM: Government counteroffensive in Quang Nam
meeting- stiffer resistance. (Page 1)
LAOS: Vang Pao committing more troops to offensive.
Page 3)
ICELAND-UK: The two countries hope to avert inci-
dents in their fishing dispute. (Page 4)
CHILE: Record price increases are aggravating pub-
lic anxieties. (Page 6)
INDIA-PAKISTAN: Delegations will try to dispel mu-
tual suspicions. (Page 7)
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PEKING-TOKYO-MOSCOW: Another Triangle: There has
been greatly increased activity in the relations
between China, Japan, and the 'USSR during the past
year. Tokyo has been moving closer to Peking and,
to a lesser extent, to Moscow, while Sino-Soviet
enmity continues. (Page 9)
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NAM: The government's counteroffensive in
coas al Quang Nam Province has met stiffened Commu-
nist resistance.
Heavy fighting broke out a few miles east of
enemy-held Que Son District town following two days
of relatively light Communist opposition to the cau-
tious government advance. The enemy again shelled
the government's staging area at Fire Support Base
Baldy as well as the nearby district town of Thang
Binh on Route 1 in adjacent Quang Tin Province.
These actions adhere closely to purported enemy plans,
gleaned from prisoners and captured documents, to use
North Vietnamese troops to attack populated areas and
interdict Route 1 while local Viet+Cong forces tie
down government troops. Apparently in coordination
with the enemy action in the Que Son Valley, Commu-
nist harassing activity in other areas of Quang Nam
Province has increased substantially, and there was
another light rocket attack against Da Nang yester-
day.
Communist shellings of South Vietnamese Marines
in the Quang Tri City area continue at a high level.
A small marine contingent reached the northeastern
corner of the citadel on 22 August but was driven
back by intense artillery and mortar fire. Sharp
skirmishes were reported elsewhere in the city. To
the south, enemy pressure lessened against airborne
positions.
South of Hue, government troops clashed with
enemy sapper elements near Phu Bai and were struck
by some 7.50 rounds of mortar fire. The detection of
another North Vietnamese regiment in this area sug-
gests a step-up in enemy pressure against government
positions guarding the southern approaches to Hue.
North of Saigon, the Communists ambushed a
South Vietnamese Ranger unit on Route 13 near Lai
Khe, resulting in 67 Rangers wounded and 112 missing.
the Communists' 9th
Division is planning attacks against the district
town of Tri Tam and other installations in Binh Duon
Province west of Lai Khe.
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LAOS: PLAINE DES JARRES AREA
fr 0 Miles 10
? Government-held location
? Communist-held location
A Highpoint
Bouam Lon
Irregular task force
vancing j
r' `ommunist
Phou f'fications -~
Houan
Q
o t,.
KFaig..Irregular task force stall
?Kho
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VLA yang Pao is committing additional troops
to is offensive in the north.
Advance elements of a multibattalion task force
on 22 August began moving toward the Plaine des
Jarres from Bouam Long, an isolated government
stronghold north of the Communists' major supply
lines to the Plaine. The task force presumably
hopes to force the North Vietnamese to divert some
of their troops from the Plaine to protect these
vital routes.
Several other irregular battalions have been
airlifted to a landing zone near Phou Keng, a stra-
tegic hill overlooking the northwest Plaine. The
North Vietnamese fired mortars at the helicopters
landing government troops, but caused no damage or
casualties.
The other task forces participating in the of-
fensive continue to encounter sporadic resistance.
One force is regrouping on the western edge of the
Plaine while awaiting additional orders from Vang
Pao. Three battalions attempting to move from the
southeast have not tried to dislodge Communist
troops from the ridge at the edge of the Plaine be-
cause bad weather has limited air support.
General Vang Pao thus, far has committed about
6,000-7,000 of his indigenous tribesmen to forays
against the Pla:ine. In addition, elements from the
4,200-man force that since May has been holding po-
sitions east of Sam Thong have begun to test the
North Vietnamese defenses in the hills near Tha Tam
Bleung. The North Vietnamese have five infantry
regiments near the Plaine.
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ICELAND-UK:: Both countries are attempting to
pre their stalemated negotiations on the fish-
ing limits dispute from degenerating into ugly in-
cidents at sea when Iceland's unilateral extension
of its. jurisdiction to 50 miles offshore goes into
effect on 1 September. The dispute also could ex-
acerbate the problem of the US.-manned Icelandic De-
fense Force.
The British have won a favorable verdict from
the International Court of Justice, but Iceland has
refused to recognize the court's jurisdiction. Lon-
don believes that, in these circumstances, agreeing
to negotiation on Iceland's improved offer on resid-
ual fishing rights, tendered on 11 August, would
undermine its case. At the same time, the UK plans
to be circumspect, particularly by respecting the
court's decision on catch limitations. It also in-
tends to leave open the door to negotiations, as
Icelandic Foreign Minister Agustsson wishes, per-
haps by offering to open new talks in an expanded
forum.
Statements by a spokesman of the British Trawler
Federation reflect less moderation. UK fishermen
appear determined to continue fishing within the
50-mile zone and to defend themselves, if necessary.
Moreover, the UK will have unarmed civilian boats
on station to assist the trawlers should the Ice-
landers attempt widespread arrests.
The Icelandic Government is looking for a way
out of the impasse, but its flexibility is limited.
The extension, a major pledge of the government's
program, enjoys support even from the opposition
parties.
Agustsson told a US official on 22 August that
he does not expect open US support, but he asked
for private assistance with the British. In urging
this, he argued that a bitter confrontation woul'T
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inevitably have an effect on :Iceland's NATO member-
s ip and, in turn, on continuation of the defense
force. The government is pledged also to negotiate
a withdrawal of the force by :L975, but Agustsson's
Progressive Party has indicated it is prepared to
face down its Communist-dominated Labor Alliance
coalition partners with only modest alterations in
the defense force arrangement?
I I
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CHILE: The expected 20-percent rise in the
cost of living this month will be the largest on
record and is aggravating already acute consumer
anxieties over widespread shortages.
Recently authorized price increases for food
and other consumer goods have driven the controlled
price index up 60 percent so far this year. The
true inflation rate, moreover,, is considerably
higher, because black market prices for goods in-
cluded in the index are as much as eight times the
official level, and prices for non-controlled items
also are rising rapidly.
Last year's estimated 26--percent increase in
real wages sparked a consumer spending spree that
helped to launch the price spiral. Wage gains thus
far this year, however, have been more than offset
by rising prices. Inflationary pressures have be-
come more severe as a result of large-scale govern-
ment deficit spending, currency devaluation, de-
clining agricultural output, inadequate industrial
capacity, and distribution bottlenecks. The Allende
government now has committed itself to new wage in-
creases large enough to restore workers' purchasing
power to last January's level. This politically
motivated action will furt
tion's economic: problems.
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SECRET
INDIA-PAKISTAN: Indian and Pakistani delega-
tions will meet in New Delhi tomorrow in an attempt
to halt the recent increase in mutual suspicions
which is threatening the Simla agreement of last
July.
According to a Pakistani Foreign Ministry offi-
cial, Prime Minister Gandhi has requested the meet-
ing. She wants the two sides to discuss the repa-
triation of Hindu Pakistani citizens who crossed the
western border into India during the war of December
1971, the establishment of a "line of demarcation"
in Kashmir, and the recognition of Bangladesh. Ac-
cording to the Pakistani official, Bhutto has as-
sured Mrs. Gandhi that he intends to make progress
on all three fronts, but that the situation would
be greatly improved if Bangladesh would cease using
the prisoner-of-war issue as a "lever to force rec-
ognition."
Since Simla, Mrs. Gandhi has had second thoughts
as to Bhutto's continued sincerity and may well have
suggested the c mina meetina in order to reassess
his intentions
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SECRET
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PEING-TOKYO-MOSCOW: Another Triangle
For the past year at least there has been
greatly increased activity in the triangular rela-
tionship between China, Japan, and the USSR. Latent
last summer and fall, this triangular tangle of af-
fairs has become more manifest as the moment ap-
proaches for the beginning of major negotiations be-
tween Japan and China, on the one hand, and Japan
and the USSR, on the other. Not all sides of the
triangle, however, are of equal length. Sino-Japa-
nese attraction and Sino-Soviet enmity are at pres-
ent most important, while the Japanese-Soviet leg
of the triangle is much less clearly defined.
The year-long maneuvering between Japan and
China on the question of recognition is now approach-
ing its denouement. Prime Minister Tanaka apparently
will be going to Peking in late September. He has
announced that he will make the journey, but no date
has been set publicly. Nevertheless, the Japanese
press has been insisting that he will depart about
that time. Moreover, most of the ground has already
been prepared for the journey to Peking. The Japa-
nese have made it clear in public that they will in
effect accept the Chinese "three principles"--that
Peking is the sole legitimate government of China,
acknowledgement that Taiwan is part of China, and
abrogation of the 1952 peace treaty signed by Tokyo
and Taipei. They have also made it clear that they
are prepared for a diplomatic break with the Nation-
alist government as the price for recognition of Pe-
king. In addition, Tanaka has gone through the
proper motions to demonstrate to the public--and to
the Chinese--that a consensus exists within the
ruling Liberal-Democratic Party (LDP) on the China
issue.
In taking this tack, Tanaka is clearly allowing
political considerations to take precedence over
legalisms as the actual negotiations approach. This.
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is as true of China as it is of Japan. With its un-
conditional invitation to Tanaka, Peking is now in
effect saying publicly what Chou En-lai was saying
privately for the past year in anticipation of the
eventual and inevitable retirement of former Prime
Minister Sato: that China will not demand public
Japanese acceptance of its three principles as a
precondition for negotiations. Moreover, it seems
increasingly clear that Japanese trade with Taiwan
will be no real obstacle to recognition and that Pe-
king is unlikely to make an issue of the Taiwan link
in the US-Japan security relationship. In all this,
Peking's aims and interests have remained as con-
sistent as its negotiating posture. The Chinese
want an early and successful end to the negotiations
in order to foreclose the possibility that the in-
ternational situation might drift in the direction
of "one China - one Taiwan." Recognition by Japan
of Peking's juridical claims would be an important
milestone in the effort to preclude this. Moreover,
the Chinese hope that close relations with Japan
will help them counter Soviet pressures in Asia and
increase pressure on the US to further amend its
Chinese policy.
What is new in the current situation, however,
is Peking's extraordinary interest in getting Tanaka
to China at the earliest possible moment. Through
a variety of devices, Chou has signaled to Tokyo
that he is anxious for a, meeting very soon. In
late July, Chou abruptly summoned to China Yoshikatsu
Takeiri, leader of the Komeito Party, which has been
advocating recognition for the past two years. Upon
Takeiri's return preparations for the prime minis-
terial visit seemed to move into high gear, as did
speculation by Japanese officials as to why China
was so anxious for rapid normalization. This sug-
gests that Chou pressed hard for an early visit and
emphasized Peking's flexibility on recognition terms.
Japanese officials have hinted this was the case
through a number of calculated leaks.
(continued)
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's concerns in taking this tack are not
harder discern. He is probably far more interested
in getting Tanaka to Peking and in obtaining visible
movement on the recognition issue than in wrapping
up the whole matter of recognition in one fell
swoop--perhaps an unrealistic proposition in any
event. Chou wishes to move. far enough down the road
to recognition so that hardliners in the LDP would
be ineffective in any attempt to draw out, the nego-
tiations. But perhaps his paramount concern relates
to the USSR. The success of Soviet detente efforts
in the West intensifies the Soviet threat in Chou's
eyes, and the prospect of the Japanese-Soviet pre-
liminary peace treaty negotiations starting in Sep-
tember increases his desire to normalize relations
with Japan quickly.
From Moscow's point. of view, events have al-
ready moved so far and so fast in Sino-Japanese
affairs. in the weeks.since Tanaka took office that
it can now be under few illusions that present
trends can be arrested. The Soviets can hardly be
happy over this turn of events, however much they
may have anticipated Tokyo's movement toward Peking.
Soviet officials have lost few opportunities in the
past eight months to warn the Japanese about the
"dangers and pitfalls" of attempting to regularize
relations with Peking. They have dangled before
Tokyo the possibility of major Japanese investment
in Siberia and have hinted--usually none too specif-
ically--that some kind of arrangement on the North-
ern Territories question was feasible.
Soviet aims in all this have been largely de-
fensive. Foreign Minister Gromyko's visit to Japan
last January was arranged after the "Nixon shocks"
of the previous summer, and although Moscow. wanted
to assess and take advantage of the new strains in
US-Japanese relations, there are few signs that Mos-.
cow thought there was any serious chance of dis-
placing US influence in Japan. More important, t
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ets clearly saw that Japanese moves toward Pe-
king were inherent in the situation of late 1971,
and they wished to do what they could to balance
them.
It was in this context that Gromyko agreed to
discuss the Northern Territories issue, thereby
tentatively accepting a Japanese precondition that
the Soviets had long rejected. The magnitude of
this concession in Soviet eyes is clear when con-
sidered in the light of other territorial issues,
both in the west and along the Chinese border.
The Japanese seem well aware of the Soviet game.
In this respect, reaction in Japan to Moscow's latest
ploy on the Northern Territories issue is significant.
Several weeks ago the ubiquitous Victor Louis sug-
gested to a Japanese newsman in Moscow that a pos-
sible compromise on the question could involve re-
turn of-the two minor islands to Japan and Soviet
"leasing" of the two larger islands to Tokyo. The
outcry in the Japanese press was immediate and
fierce, and Soviet Foreign Ministry officials, who
may have expected to raise this idea when the talks
opened in September, were clearly embarrassed. This
incident was quickly followed by a formal statement
by the new government in the Diet to the effect that
Tokyo would not conclude a peace treaty with Moscow
unless all four islands were returned.
Japan's refusal to contemplate a compromise on
the Northern Territories prior to the opening of the
preliminary peace treaty talks, while at the same
time apparently accepting most, of Peking's demands
before the Tanaka trip, points up the difference in
Tokyo's relationship to the two powers. Japanese
toughness vis-a-vis Moscow suggests that the new
cabinet sees little utility in attempting to play
the Soviet card in the hope of getting better recog-
nition terms from China. Indeed, the Japanese have
probably concluded that they already have the best
terms they could realistically expect to get. In-
stead, Moscow's anxiety probably encourages them to
~'l
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b'eve that the Chinese card can be played effec-
tively against the Soviets, both in the peace treaty
and upcoming Siberian investment talks.
In making this calculation, Tanaka and company
are helped by the fact that they are not nearly as
constrained politically in dealing with Moscow as
they are in dealing with Peking. There is little
public pressure to conclude a peace treaty with Mos-
cow soon, and the Northern Territories issue does
not raise political temperatures as high as does the
Chinese recognition question. Moreover, since dip-
lomatic relations have already existed with Moscow
for years, there is relatively much further to go in
relations with Peking, and the Japanese Government
probably feels that over the long run recognition
in itself will have something of a stabilizing ef-
fect in East Asia.
In these circumstances the Soviet-Japanese ne-
gotiations are :Likely to move slowly and fitfully.
As it becomes increasingly apparent that the move-
ment toward normalization of relations with Peking
has too much momentum to be stopped, at least some
Soviet incentives to strike an easy bargain are cor-
respondingly decreased. But even toward the end of
the Sato period---when Moscow may have thought there
was more prospect of slowing that momentum--it was
not forthcoming regarding the actual return of the
islands and was not especially conciliatory on eco-
nomic matters. Indeed, the Soviet leaders may not
yet have decided whether they are prepared to return
the islands, which the Japanese feel they must have.
In short, the prospects are for protracted negotia-
tions across the board, with both sides trying to
combine political and economic issues in a package
that offers each some advantages.
Finally, all three nations are likely to keep
a sharp eye on the United States throughout the pro-
ceedings, as well as on each other, realizing that
any major shifts in US policy could rattle, if not_
upset, the table on which the game is being played.
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Secret
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