THE PRESIDENT'S DAILY BRIEF 3 AUGUST 1971

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005992785
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: August 3, 1971

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The President's Daily Brief
3 August 1971
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THE PRESIDENT'S DAILY BRIEF
3 August 1971
PRINCIPAL DEVELOPMENTS
On Page 1 we comment on yesterday's meeting of top
Soviet leaders with all of Moscow's Eastern European
allies except Romania.
leftist politburo member Chen Po-ta has in fact been
purged, apparently symbolizing Peking's repudiation
of extremist policies. (Page 3)
\Chinese
I (Page 4)
On Page 5 we comment on this week's cabinet reshuf-
fle in Australia.
.At Annex we discuss Peking's changing approach to-
ward economic and military aid to the underdeveloped
countries:
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USSR - EASTERN EUROPE
Yesterday's meeting of Brezhnev and two other top
Soviet leaders with counterparts from all of the
USSR's East European allies save Romania was meant
to highlight Bucharest's isolation and to put pres-
sure on it to conform to Soviet foreign policy.
The communiqug's formulations are generally routine,
but the broad range of topics covered, from economic
integration in CEMA to Vietnam and the Middle East,
formalizes the seemingly informal vacation gathering
in the Crimea and underscores Romania's deviant
status.
In view of frequent bilateral meetings of Soviet and
East European leaders in the past month capped by
a CEMA summit in Bucharest last week, there was
scant substantive reason for consultations, except
for Romanian recalcitrance. Indeed, there is reason
to believe that the meeting was called quite abruptly.
East Germany's Honecker had been on vacation but was
reported in yesterday's press as having met, presum-
ably on 1 August, with the Soviet ambassador in East
Berlin.
Romania has irritated Moscow in recent years by not
siding with the Warsaw Pact positions on the Middle
East war and Soviet disarmament proposals. Romania
also has resisted Soviet plans to integrate CEMA,
and did not suppress its delight .that this goal, as
defined at the CEMA summit last week, will take 15
to 20 years to implement.
Perhaps Ceausescu's greatest present sin, however,
is to insist upon neutrality in the Sino-Soviet dis-
pute, to cultivate good relations with Peking, and
to welcome the thaw in Sino-US relations. The USSR
is gravely worried about a possible rapprochement
between Peking and Washington, and it suspects that
Romania has assisted in nourishing these contacts.
Unable to stop the Chinese, Moscow is determined at
least to force the Romanians back into Zine.
(continued)
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The Romanians, judging by their recent behavior,
have not been expecting a sharp squeeze from the So-
viets. Earlier this summer, the Romanians were ap-
prehensive that Moscow would try to force them to
take part in a joint military exercise in Bulgaria
or, alternatively, to permit Soviet troops bound for
the exercise to cross Romanian texritory. Such re-
ports have died out and there are no indications
that the. Soviets have reopened the matter of Romanian
participation. The exercise is scheduled to start
in mid-August.
Having carried their dispute with Romania into the
open in this fashion, however, the Soviets are not
likely to let the matter rest. If Romania does not
cease its misbehavior, Moscow may step up economic
pressures, and insist on closer adherence to the
Warsaw Pact's foreign policy goals. Ceausescu will
be reluctant to appear to give ground under attack,
but he may well decide to pull in his horns for a
time.
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COMMUNIST CHINA
leftist
politburo member Chen Po-ta had in fact been purged,
as had been widely rumored in Western press reports.
The official added that Mao Tse-tung had been allud-
ing to Chen's failings in his interview with Ameri-
can journalist Edgar Snow last December when he con-
demned "hypocrites" who told lies during the Cultural
Revolution.
The political demise of Chen, formerly the
fourth ranking member of the politburo
standing committee, seems intended to sym-
bolize Peking's repudiation of extremist
policies both in domestic and international
affairs. Peking's handling of his downfall
reflects the marked shift to the right that
has occurred in the bitter struggle over
power and policy within China's unsettled
leadership coalition since the ninth party
congress two years ago. The issues in-
volved have been complex but clearly have
included unsuccessful attempts by the left-
ists in Mao's inner circle to weaken Chou
En-lai, to resist the reinstatement of many
veteran party and government officials, and
perhaps also to thwart the movement of Chi-
na's foreign policy in several areas in the
direction of more moderation and flexibil-
ity. The case against Chen Po-ta and the
extremist "May 16 Corps" he allegedly or-
ganized appears to have been accompanied
by a corresponding strengthening of Chou
En-Zai's personal position.
It is still uncertain whether Peking in-
tends to make Chen a public sca egoat for
the Ma 16 rou s excesses
C en s ro e 7,71 the
group's activities is being discussed in
local party meetings, but because other
politburo members, including Madame Mao
and Kang Sheng, also were involved, Peking
may be reluctant to risk exposure of the
full extent of leadership disunity through
an open pillorying of Chen. The ranking of
Madame Mao just behind Chou and ahead of
Chief of Staff Huang Yung-sheng at the Army
Day celebrations last weekend suggests that
the jockeying between leftist and moderate
elements within the regime has not ceased.
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COMMUNIST CHINA
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AUSTRALIA
Nigel Bowen, who replaced
Leslie Bury as foreign minister in the cabinet re-
shuffle of 1 August, is a former attorney general
with five years of cabinet experience. Bowen's rep-
utation as an able and energetic minister and his
growing stature within the ruling Liberal-Country
Party coalition should give a boost to Prime Minis-
ter McMahon's current shaky. position.
The four other ministerial changes involved in the
reshuffle are aimed at improving the government's
prospects in next year's parliamentary elections.
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NOTE
Ceylon: The army commander, General Attygalle,
has been caustically critical of politicians in the
current atmosphere of nervousness over the possible
renewal of insurgency and general deterioration of
economic conditions.
Attygalle would mount a coup if he be-
lieved the country were going further to the left.
In doing so, the General might choose to keep Prime
Minister Bandaranaike at her post but move the gov-
ernment to the right. Attygalle has no strong po-
litical attachments
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Chinese Aid to Underdeveloped Countries since 1 April 1971
551728 7-71 CIA
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PEKING'S CURRENT FOREIGN AID POLICY
The recent spurt of China's military and economic
assistance to developing Afro-Asian states shows how
much Peking has changed its approach to the underde-
veloped world. It has moved away from its previous
heavy-handed emphasis on ideology toward an increas-
ingly pragmatic and flexible foreign policy. Steer-
ing clear of any new massive and onerous aid commit-
ments such as the $400-million Tan-Zam railroad
project agreed to in 1970, Peking is relying instead
on lesser amounts of selective support in a contin-
uing effort to re-establish itself as a leading cham-
pion of third world interests. The Chinese in gen-
eral are focusing attention on those states that show
some promise of supporting Peking's international in-
terests, particularly in the UN, and on those that
are not overly committed to either the US or the
USSR.
By far the largest amount of new aid is a $110-mil-
lion agreement negotiated early in June by a Somali
delegation in Peking. The money will finance high-
way construction and underwrite several light indus-
trial projects and agricultural programs. With this
commitment, Peking, which has furnished aid to So-
malia for many years, becomes the country's largest
donor.
Also in June, China granted Iraq a credit of nearly
$40 million for plants, equipment, and technical
assistance. The credit probably will be used to
boost Baghdad's development of light industry. The
Chinese also will provide Iraq with free military
equipment?primarily small arms and ammunition.
As in the past, much of this may be planned for on-
ward shipment to the Palestinian fedayeen.
In May Peking extended a hard currency loan of $25
million to Ceylon. The loan?largest of its type
to be granted a non-Communist regime--is exceeded
only by the $100 million extended to Romania last
November. The loan to Ceylon is not tied to any
specific project, but will help make up losses in
export earnings caused by the disruption of the
April insurrection there. The Ceylonese also have
accepted an offer of five small patrol boats--
China's first military assistance to Colombo. Pe-
king's assistance to Ceylon is intended not only to
gain influence but to remove any trace of Ceylonese
suspicion of Chinese involvement in the insurrection.
The Chinese loan is in excess of the aid received
from Washington and Moscow following the disorders.
(continued)
Al
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A loan in April of $20.5 million to Mauritania will
finance construction of basic economic projects such
as a port at Nouakchott and a water pipeline. Pe-
king has extended two loans to Mali totaling $6 mil-
Zion, two-thirds of which will be used to purchase
Chinese goods for sale in Mali and the remainder to
bolster the government's budget. Peking has assured
the MaZians of its continued interest in financing
the $100-million Manantalli dam project. A new agree-
ment providing for construction of several light in-
dustrial plants and a mineral survey is to be signed
in the near future. Mali has recently received sev-
eral small shipments of military equipment from
China, as has Guinea, which signed a military aid
agreement with Peking in early July. Guinea will
receive several patrol boats and more arms and ammu-
nition.
All of these recipients recognize the People's Re-
public and support its bid for UN membership. The
Chinese, however, no doubt hope that the availabil-
ity of their aid will help bring other third world
governments to establish diplomatic relations with
Peking and to support its cause in the United Na?
tions. Last week, for example, a delegation from
Sierra Leone was visiting Peking when its government
switched recognition from the Nationalists to the
Communists, and we presume the visitors had received
assurances of economic assistance.
Extension of aid helps Peking to project the image
of a dynamic Chinese economy capable of supplement-
ing assistance from the US, the USSR, and other in-
dustrial powers. Peking's aid vastly overshadows
Taipei's foreign aid program, which totaled $16 mil-
lion in fiscal 1971. Most regimes in the underde-
veloped countries realize that China is unable to
replace the more advanced nations as an economic
benefactor, but the Chinese Communists are considered
to be particularly well suited to help meet at low
cost the needs of labor-intensive agricultural pro-
grams and construction projects such as roadbuiZding
and port development.
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Top Secret
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