CHINA S POLICY IN NORTH ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00227R000100180005-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 19, 2016
• Document Release Date: February 12, 2007
• Sequence Number: 5
• Publication Date: June 1, 1982
• Content Type: REPORT

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Directorate of Secr
Intelligence
China's Policy
in North Asia
Secret
EA 82-10062
June 1982
Copy 2 8 J
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Directorate of
Intelligence
China's Policy
in North Asia
Information available as of 25 May 1982
has been used in the preparation of this report.
This assessment was prepared by
Office of East Asian Analysis. Comments and queries
are welcome and may be directed to the Chief
China Division, OEA
II
Secret
EA 82-10062
June 1982
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China's Policy
in North Asia
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Key Judgments China shares with Japan and the United States a basic interest in the
stability of the Korean Peninsula, and Beijing has been careful to avoid
linking major Sino-US differences over Taiwan with Chinese policy in
North Asia. The Chinese see instability in Korea as a direct threat to their
security and to their strategic relationships with Japan and the United
States.
Since the early 1970s Chinese policy on the Korean Peninsula has become
more flexible and has evolved toward a tacit acceptance of the two Koreas.
Beijing continues to give priority to maintaining solid ties with P'yongyang
but has also adjusted its policies to accommodate Japanese and US equities
by:
? Demonstrating support for the economic, military, and political status
quo in Korea.
? Seeking to preclude the expansion of Soviet influence on any Korean
issue.
? Allowing room for greater contact with South Korea to provide new trade
and technological ties for China's modernization.
Intermittent frictions as well as some economic and strategic policy
differences with Japan have not prompted Beijing to reassess the common
interest in stability in Korea that it shares with Tokyo. China and Japan in
the past few years have lowered earlier expectations for their own
relationship, but China has not changed the important role it accords
Japan as its primary source of economic and technological aid.
On strategic issues, China is encouraging a more forthright Japanese
defense policy and continued close cooperation between Japan and the
United States. Nevertheless, the Chinese still question the Japanese view of
Soviet intentions and see Tokyo's willingness to adopt a firmer posture
toward Moscow as the bellwether of Japan's foreign policy.
Secret
EA 82-10062
June 1982
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China's Policy
in North Asia I
Despite current difficulties with the United States
over the Taiwan issue, China views the stability of
North Asia as basic to the development of its relation-
ships with Japan and the United States. The interests
of all three powers as well as those of the Soviet
Union-China's major antagonist-intersect on the
Korean Peninsula, where Beijing's concerns about
instability and the resulting danger to China's own
security are important influences on Chinese policy.
China's increased emphasis on the threat of Soviet
expansionism has also sharpened Beijing's focus on
North Asia in recent years, especially after Soviet
inroads in the regions of Southwest and Southeast
Asia bordering China.
Since the early 1970s, these Chinese concerns have
prompted Beijing to introduce an increased flexibility
into its policy toward the two Koreas. China still
wants to maintain a solid tie with North Korea but
has slowly reoriented its policy toward P'yongyang in
a way suggesting that Beijing's interests in Korean
stability mesh more closely with Japanese and US
views. At the same time, China has invested heavily in
building its economic relationship with Japan and in
publicly advertising the growing community of views
between Beijing and Tokyo on international as well as
bilateral issues. Beijing's actions point to its recogni-
tion that economic and political stability in Korea are
prerequisites for future cooperation with Tokyo and
Washington and for precluding expanded Soviet influ-
As the Chinese have tried to keep the momentum in
their relations with Japan and the United States, their
interests have increasingly caused friction with North
Korea. Even in the face of the Sino-US bilateral
dispute over Taiwan, Beijing continues to view the
development of relations with Tokyo and Washington
as an aid to China's modernization and as opposition
to Soviet expansionism. These considerations tran-
scend the advantages of backin P' on an 's desire
for Korean reunification.
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Balancing Support for North Korea
In the past several years, China has tried to balance
its increasingly explicit acknowledgment of Japanese
and US interests on the Korean Peninsula with its
longstanding desire to maintain close working ties
with North Korea. To that end, the Chinese h ` old
Tokyo and Washington in ublicl
that they believe P2641
yang does not threaten Seoul and seeks reunification
only through peaceful pr
Beijing's portrayal of its actions and motives fo$11
benefit of Western audiences seeks, of course, to put
the best face on Chinese policy. On the one hand,
China can use these statements to show it supports
political stability in Korea. On the other, however,
China seeks to take credit for North Korean actions
over which Beijing probably has very little influence.
The Chinese often appear to shrug off particularly
bellicose political or military stands by P'yongyang. In
addition, they publicly continue to repeat and defend
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North Korea's statements regarding South Korea and
reunification. Moreover, they have never claimed a
willinvness or ability to restrain North Korea directly
Even so, important changes in China's overall posture
toward North Korea suggest a basic interest in ensur-
ing stability on the Peninsula, particularly since the
visit of former Chairman Hua Guofeng to P'yongyang
in 1978. Before Hua's visit, the Chinese had tried to
smooth over the bilateral problems engendered by the
Cultural Revolution in the mid-1960s. Both sides
publi trip as "a resounding suc-
cess,'
After the visit in 1978, both the Sino-Japanese friend-
ship treaty and the imminent diplomatic recognition
of the United States underscored Beijing's intent to
pursue closer ties with Tokyo and Washington.
P'yongyang almost certainly viewed China's new
priorities with apprehension. The North Koreans may
have believed that Beijing's priorities pointed toward
the eventual loss of China's traditional support.C
Despite P'yongyang's desire to manage its relations
with Moscow and Beijing in an evenhanded manner
that minimizes dependence on either, North Korean
ties with the Soviet Union have not been as close as
those with China. On various occasions when frictions
have developed with Beijing, P'yongyang has signaled
an interest in improving relations with Moscow; in
general, however, the Soviets have failed to respond in
kind and have even indicated irritation with North
Korea. For example, Moscow sent only a domestic
leader to the Korean Workers Party Sixth Congress in
1980; Soviet treatment of treaty anniversaries contin-
ues to show little regard for relations with P'yong-
yang.
In any case, China apparently calculates that its
relations with North Korea offer added room for
maneuver in pursuing other foreign policy goals. For
example, Beijing has moved closer to the Japanese
and US position regarding the role of US troops in
South Korea. Publicly, the Chinese still echo the
North Korean demand for total withdrawal, but by
not referring to a specific time frame, they have, in
effect, given tacit acquiescence to the presence of US
forces. In the past few years, Chinese officials have
also implied that Bei'in views US troops as necessary
to Korean stability.
To date, North Korean disapproval or criticism has
not prompted Beijing to change its behavior, although
the Chinese remain sensitive to P'yongyang's senti-
ments. China is apprehensive about a North Korean
tilt toward the Soviet Union and seeks to retain some
leverage in P'yongyang. The Chinese, for instance,
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continue to give military assistance to North Korea;
they still supply military transport and training air-
craft and, in addition, recently have delivered new-
albeit vintage design jet combat aircraft
The Chinese could face a different-and difficult-
set of questions if P'yongyang chose to make an issue
of their new directions in domestic and foreign policy.
For example, the North Koreans could argue that by
expanding relations with the United States Beijing is
deliberately acting against P'yongyang's interests.
China also remains acutely aware of the uncertainties
posed by North Korea's leadership succession and its
new policies. North Korea is certain to limit the
extent of new Chinese initiatives in the region.
Flexible Policy Toward South Korea
China officially remains firmly opposed to relations or
contacts with Seoul. The Chinese also have ruled out
any cross-recognition formula-Chinese recognition
of South Korea in return for US recognition of North
Korea--or any open acknowledgment that there are
two Korean governments. Nevertheless, Beijing has
moved toward tacit acceptance of "two Koreas" and,
more importantly, has permitted indirect contacts
with Seoul to develop-especially through trade.
The Chinese see their greater flexibility toward South
Korea lending credence to signals to Tokyo and
Washington that Beijing shares an interest in Korean
stability. In addition, this flexibility provides some
economic benefits and offers the potential for future
help for Chinese modernization.
South Korea currently imports some Chinese raw
materials, particularly coal, and is a source of manu-
factured goods such as synthetic fibers and electronic
equipment. Indirect trade probably exceeded $300
million in 1980 and rose sharply again in 1981. Total
trade last year apparently reached $500 million,
although some estimates range as high as $1 billion.
Both sides try to keep the trade moving through
intermediaries in Hong Kong, Singapore, and Japan,
but some recent shipments have gone directly from
China to South Korea in ships with third-country
registry
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However potentially unsettling to P'yongyang, the
significance of China's actions should not be exagger-
ated. In addition to the constraints imposed by Chi-
nese ties to the North, Beijing's interest in South
Korea is limited by its position regarding Taiwan. The
Chinese believe that their recognition of "two Ko-
reas" would weaken their argument for "one China."
Moreover, China's role as a principal actor in any
great power arrangements affecting the Peninsula
also circumscribes its interest in unrelated initiatives
toward South Korea. In any event, although Beijing is
unlikely to break new ground in its dealings with
Seoul, China will continue to regard South Korea as a
potentially important source of economic benefits for
China's modernization.
Relations With Japan Take On Increased Importance
Since the early 1970s, when China began the process
of diplomatic normalization with both Japan and the
United States, Chinese relations with Korea have
figured prominently in Beijing's ties with Tokyo and
Washington. The Chinese recognize that, like the
United States, Japan places a premium on the mainte-
nance of stability on the Korean Peninsula and that
Tokyo has repeatedly looked to Beijing to exercise its
influence in P'yongyang to that end. In fact, the
evolution of Chinese policy toward the Korean Penin-
sula in the last decade has been shaped in large part
by Beijing's effort to account for Japanese and US
interests in the Korean problem.
Beijing has sought to highlight its flexibility and
desire for stability in Korea to Tokyo and Washing-
ton-a message that has been consistent in both
capitals. Intermittent frictions with Japan have not
prompted China to link its Korean policy to other
issues in seeking to influence Japanese behavior.
Rather, the Chinese have avoided even hinting at
major change on their part concerning such sensitive
issues in dealing with Japan, where Beijing wants a
long-term relationship to gain economic and techno-
logical assistance for modernization and political sup-
port to counter Soviet expansionism. Current Sino-US
bilateral strains almost certainly increase the impor-
tance to China of developing closer economic and
political ties to Japan.
There has been some reassessment of the relationship,
however, by Beijing and Tokyo because of their initial
overly optimistic expectations regarding the potential
development of economic ties. Japanese capital equip-
ment exports and developmental financing were to be
offset by Chinese energy exports, particularly oil and
coal, which were attractive to Japan. Such expecta-
tions prompted the Japanese to become more deeply
involved with the Chinese economy than is any other
nation.
Beijing's recent failures to fulfill its economic ar-
rangements have been viewed by Japan as threatening
this important economic investment. During the past
year, negotiations regarding China's arbitrary cancel-
lation of whole plant contracts were prolonged and at
times contentious. In reaching an agreement in De-
cember 1981 on their outstanding problems, both
Beijing and Tokyo recognized that a solution was
needed to avoid the danger of continuing problems
over contracts disrupting the overall relationship
The two sides now demonstrate more modest expecta-
tions for their relationship and recognize the need to
devise policies in line with this view. The Chinese
accordingly may find Japanese developmental assist-
ance harder to come by, although Beijing will contin-
ue to cultivate the Japanese so as to encourage Tokyo 25X1
to remain a primary source of investment funds and
technological assistance.
China has also lowered its sights for the political and
strategic aspects of its relations with Japan. Essential-
ly, Beijing places more emphasis on the threat of
Soviet expansionism in the region than does Tokyo,
but neither side wants divergent strategic views to
create problems in other areas of the relationship.=5X1
As a case in point, Beijing has focused attention on-
and has tried to influence-Japan's defense policy,
which China views as a crucial indicator of the
direction of Japan's overall foreign policy. China has
called for improvements in Japan's defense capability;
although wary of the dangers inherent in resurgent
Japanese militarism, the Chinese view a militarily
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Secret
strong Japan as a key element to political stability in
North Asia. Indeed, Beijing explicitly links the need
for Tokyo to strengthen its defenses with the threat of
Soviet expansionism. The Chinese have expressed
appreciation of and support for improvements already
undertaken in Japan's defense program; they have
also lobbied the Japanese,
IIto accelerate their program.
Nevertheless, Beijing has moderated its approach in
the interest of the overall relationship. In response to
charges of being insensitive to Japanese feelings about
defense and Soviet-Japanese relations, the Chinese
now couch their calls for stronger defense in terms of
support for the Japan-US mutual security treaty.
China's media, for example, lauded last year's
Reagan-Suzuki summit, pointing out that, for the
first time, both Washington and Tokyo specifically
expressed concern over Soviet expansionism, acknowl-
edged a division of roles in defense matters, and-
most importantly-characterized their own relation-
ship as an "alliance."
In the context of this "new development," the Chinese
have been urging Japan to enlarge its share of the
burden of the Japan-US treaty and have applauded
Tokyo's recent decision to increase defense spending
in 1982. China's media noted Washington's favorable
response and sought to imply that the higher defense
budget is related to opposition to the Soviet Union.
Still, the Chinese would prefer even larger increases
for defense and a firmer commitment by Tokyo for
cooperation with Washington-and eventually with
Beijing-on major political and strategic issues.
Implications for US-China Relations
China's interest in maintaining regional stability is
likely to continue despite current difficulties wi ##e
United States over the Taiwan issue. The Chi e 'do
not necessarily view this bilateral problem as leading
directly to Sino-US confrontation in regions sgc'
North Asia, where both governments now have simi-
lar interests. China also will continue to attacl2{ qr-
tance to close ties with Japan. Beijing hopes t
benefit-through trade and investment-fron1lyA1
Tokyo and Washington; nevertheless, the Chinese
have to follow a circumspect foreign policy because
they still must contend with significant limits imposed
by North Korea and its desire for reunification X1
Beijing is on the record in support of Korean reunifi-
cation but views hostilities as a crucial threat to
relations with Tokyo and Washington and as a golden
opportunity for Moscow. Although the Chinese claim
that North Korea understands their refusal to support
military action against South Korea, Beijing's influ-
ence-and its policy options-would face serious hur-
dles if P'yongyang initiated unilateral action. Under
such circumstances, the Chinese would have to deal
with the challenge of Soviet involvement, knowing full
well that regardless of who instigated the hostilities,
China's relationship with the United States would
probably be the first casualty. Indeed, Beijing's tacit
acceptance of the deterrent value of US troops in
South Korea almost certainly stems from China's own
limited ability to prevent a North Korean atta2l5
Despite its professed support for reunification 245X1
P'yongyang's terms, Beijing almost certainly sees
North-South contacts and negotiations as an added
insurance against unilateral hostile actions.
Beijing will continue to cultivate relations with
P'yongyang through high-level visits-Premier
Zhao's visit in December 1981, for example-as well
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as through aid and public statements. These efforts
are in part to persuade P'yongyang to deal with Seoul
on a constructive rather than a hostile basis.
Given the limits on Chinese flexibility in Korea,
Beijing has encouraged Washington to play a larger
role in promoting stability on the Peninsula. The
Chinese, have urged the Unit-
ed States to respond positively to North Korean
overtures for bilateral discussions and a negotiated
peace treaty. Beijing views these approaches to Wash-
ington as serving several interests:
? The Chinese could claim credit with P'yongyang for
any US approaches, just as they claim credit in the
West for influencing North Korea's peaceful
intentions.
? Regarding the Sino-US relationship, Beijing has
continued to convey the message that China shares
the US interest in political stabilit and tacitly
accepts the status quo in Korea.
? Believing that Washington probably relays Beijing's
messages to Seoul, the Chinese could expect to
promote their self-interest. In offering South Korea
the possibility of increased contacts, Beijing is
aware of the potential for economic assistance to its
modernization.
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