CHINESE AFFAIRS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R000700020002-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 19, 2016
• Document Release Date: July 25, 2005
• Sequence Number: 2
• Publication Date: March 19, 1973
• Content Type: REPORT

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Chinese Affairs
Secret
I ii
19 March 1973
No. 1634/73
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Comments and queries on the contents of thb
publication ere welcome. They should be directed
to the officers named In Ohs Individual artielas,
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
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CHINESE AFFAIRS
19 March 1973
Page
The Economy Slows own . . . . . . . . . . . . . . . . . . . 2
The Message at One Remove . . . . . . . . . . . . . . . . . . . 3
Turning Out for Tea . . . . . . . . . . . . . . . . . . . . . . 4
....... .............5
Latin American Holiday . . . . . . . . . . . . . . . . . . . . 6
Law of the Sea . 7
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The liconom Slows Down
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China's rate of economic growth slowed noticeably last year, the
second year of the Fourth Dive Year Plan (1971-75 ). Gross National Product
barely kept pace with the two-percent annual increase in population, judging
from Peking's cryptic disclosures and other indicators. Agricultural produc-
tion may have declined by as much as five percent. and the growth in
industrial output probably fell to around eight percent. Some slippage in the
rate of economic growth last year had been anticipated because most of the
slack in non-agricultural sectors that was caused by the Cultural Revolution
had been taken up over the last two years.
The slowdown, however, was greater than expected. Agricultural pro-
duction was kept down by adverse weather. Shortages of raw materials
slowed the growth in industrial output, and the economy was plagued by
bottlenecks in transportation and failures to complete key construction
projects, in many cases, local authorities apparently misused the decision-
making authority they had been handed after the Cultural Revolution.
Peking has icacted to the setbacks by making a number of adjustments
in its national economic plans. The government has cut the 1973 ration of
cotton cloth, strengthened measures to conserve food, accorded higher
priority to mining of raw materials, and acted to curb unsaactioned eco-
nomic activities by local authorities. It has shown a greater willingness to
turn ,o foreign trade as a means of supporting agriculture and maintaining
living standards. Grain and cotton imports have been stepped up; China has
made its first purchases of these commodities from the United States in
more than two decades. Peking has recently contracted for six Western
plants worth almost $150 million to expand production of fertilizer and
synthetic fibers.
Agriculture will continue to be the pivotal element in China's economic
picture in 1973 and the years beyond. Peking gives every indication of taking
measures to restore forward momentum in this key sector, and with reason-
ably good weather, the 1972 slowdown should prove temporary. The con-
tinuation of pragmatic economic policies is crucial if China is to feed and
clothe its huF,:: population ? nd still make progress in developing a modern
industrial and technical base
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The Message -at one Remove
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The widely publicized ceremonies connected with "'T'aiwan martyrs
day" were merely the tip of the iceberg so far as Peking's propaganda on the
Taiwan issue is concerned, For months the mainland has been taking a
conciliatory line in broadcasts directed at the island; for even longer, over-
seas Chinese with ties to Taiwan have been encouraged to visit the People's
Republic, where they have been greeted with open arms,
littellectuals and students are a prime target of Peking's appeal to the
Taiwanese. Broadcasts front the mainland stress pride in China and its
accomplishments. The prospect of' forgiveness for late converts to Mao's
regime is held out. In appealing to the self-interest of the audience, Peking
:'mphasizes its good treatment of intellectuals, its encouragement of students
to make a professional contribution to new China, and the free loin from
economic worries foi university graduates. The last point may be persuasive.
Taiwan has long suffered a considerable "brain drain" of' educated people
who cannot find satisfactory employment on the island, even during the
current period of rapid economic expansion.
!n themselves the broadcasts are probably not particularly effective.
Visits of Taiwanese working or studying abroad to the mainland -not to
mention their exposure to mainland Chinese ideas, goals, and the like -may
be another matter. These Taiwanese find the mainland very different from
the standard line propagated by the Nationalists. Many of the visitors are
probably flattered by the attention they get from the Communists. Last year
several older overseas Taiwanese were received by Chou I n-I;ai, who used the
occasion to propagate the "united front" line. Chou told his guests that
Taiwanese students should come to the mainland, where their knowledge of
conditions on the island would be used.
The Nationalist government is concerned over these developments, but
there is probably no way Taipei can wholly insulate students and other
intellectual elements from influence that emanates from Peking. The govern-
ment recently arrested two professors and several students for engaging in
"united front" activities, that is, fairly overt pro-Peking propagandizing, on
the island itself. Taipei is now adopting a program that will increase coverage
of the mainland in the mass media and will make courses in mainland affairs
for college students compulsory. In the nature of things, however. the gap
between what the students are taught and what they hear otitside of Taiwan
will be only narrially nnrrnweil
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Turning Out for Tell
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Chou Fn-hai headed a small Politburo turnout for it tea party on 8
March in honor of International Working Women's Day. The event marked
the reappearance In Peking of Shanghai's third-ranking party leader, Wang
Ilung-wen. Wang had returned to Shanghai alter spend in, September-
December 197 2 among the central leadership In the capital. Ile has consist-
ently ranked among it group of leaders just below Politburo level, suggestin
he holds an important post in the central party apparatus.
The turnout also revealed that the wife of Ilsieh Fu-chip, a Politburo
member and security minister until he died a year ago, holds a government
position. Ilsich's political status had been in doubt at the time of' his death
but his posthumous rehabilitation has apparently benel'ited his widow. She
was listed among "women vice-ministers" and may be in the Security
Ministry-husbands and wives in the central leadership are usually employed
by the same organization.
Chou's wife Teng Ying-chiao was notably absent, tier ,)osition as vice
president of the National Women'. Federation would normally require her
presence, particularly since her husband gave a speech. She has repeatedly
been reported as seriously ill, however and the irregularity ol? laer a )pear-
ances suggest: tl is could be so.
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Latin American Holiday
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A delegation of Chinese Journalists, now in Trinidad, will continue its
tour of Carribbean and Latin American nations with calls in Panama, Costa
Rica, El Salvador, and licuL,dor. The five-man group, led by Li Yen-nien of
the International department of NCNA, already has stopped In Jamaica,
Venezuela, and Guyana,
Of the eight countries so far known to be on the group's itinerary,
Peking has formal diplomatic or trade re'atiows with only Jamaica and
Guyana. Billed as a friendship gesture, the tour djubtless Is a low-key effort
to test the climate for expanded Chines: relations with the other six
countries. Neither China nor the host governments have played tip the visits.
but the journalists have met with important government figures, including
the prime ministers of Jamaica and Guyana and the President of Venezuela.
The countries on the group's itinerary, like many other Latin American
nations, have their eyes on the Chinese market. Ecuador recently concluded
a deal to sell $ 1.5 million worth of bananas to China and probably will soon
reach an agreement to exchange permanent commercial missions. Last
November, a Venezuelan commercial delegation returned from China with a
contract to sell $23 million worth of urea, As a move toward closer relations
with China, Caracas will not replace Its ambassador in Taipei when his tour
of duty ends this month.,
Although the pace of China's drive to gain recognition from foreign
countries has slowed somewhat since 1971-72, the combined circumstances
of the end of the Vietnam war and the Sino-US communique provide Peking
with an opport t to reduce further Nationalfst in luence in Latin America
and elsewhere.
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Law of the sea
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Since entering the UN in Octoher 197 1. China has participated in it very
limited way in the activities of the numerous UN and UN-al'I'ilialcd organiza-
tions to which it has been formally admitted, Although the Chinese attended
all the sessions of the 27th session of the General Assembly, they took no
initiatives and co-sponsored only one draft resolution. They were active only
on issues of' high priority for China-Korea, Bangladesh, and disarmament.
Although sonic of their reticence may have been caused by unfamiliarity
with certain issues or UN procedures, a more important factor was China's
shortage of well-trained, experienced personnel,
Given the constraints, Peking's effort to take part in preparations for
the Law ol'the Sea Conference is noteworthy. The Chinese announced their
decision to participate in the meeting a little more than a month after they
joined the UN, and they have attended Seabeds Committee meetings since
March 1972. In February 1972, the Ministry of Foreign Affairs in Peking
organized a Department of International Organizations, Treaties, and Law.
Undoubtedly ('eking had other issues in mind as well. but at that time the
Law of the Sea Conference was about the only one on the' horizon for China.
Another index to China's interest in the conference is the trouble the
Chinese took to familiarize themselves with the problem even before en-
tering the UN; from their arrival in New York, Chinese diplomats have
demonstrated a comprrhens;vc grasp of' the questions at issue. Thus. China's
failure to vote on a controversial msolution calling for a study of the
economic effects of the 200-mile territorial sea limit was more probably
because of the absence of instructions or the desire not to get caught in a
clash of interests between maritime and land-locked third world countries
than because of lack of'solid information.
China, as a maritime state, is doubtless concerned about claims to
offshore mineral resources, fishing rights, passage through straits, and the
extent of territorial waters. More important, these issues are of concert to
many underdeveloped countries, and ('eking has decided that it is an area
that can both help will China diplomatic recognition (as in t
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