BACK-UP BOOK FOR YOUR NSC MEETINGS ON CHINA 16 & 17 APRIL 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00420R000100290005-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 38
• Document Creation Date: December 22, 2016
• Document Release Date: July 29, 2010
• Sequence Number: 5
• Publication Date: April 16, 1984
• Content Type: MISC

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Back-up Book for NSC Meetings on China
16 & 17 April 1984
Please return to:
SA/DCI/IA
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FROM: George P. Shultz
SUBJECT: Your China Trip: Setting and Issue$
I. THE SETTING
Your trip to China April 26 - May 1 will cap the series of
discussions you and senior members of your Ad ,Ikinistration have
held with Chinese leaders during the past year These
discussions have placed our bilateral relationship back on
track, and the Chinese evidently share our desire to
consolidate and develop further our ties. Your seven hours of
talks in Beijing with China's four top leaders -- political
strongman Deng Xiaoping, Chief of State Li Xiannian, Communist
Party General Secretary Hu Yaobang, and Premier Zhao -- will
reinforce and elaborate the themes developed in the course of
this year-long bilateral dialogue, and explicitly underscored
in your own meetings with Premier Zhao in mid-January. Both
your private statements to Chinese leaders and your two
scheduled major addresses will convey that this nation:
-- regards China as a friendly, non-allied country and
wishes to advance our ties on that basis;
-- stands ready, willing and able to lend support as
appropriate to China's economic, S&T and defense modernization;
-- seeks enhanced consultations and coordination where our
interests are similar (e.g., Korea, Kampuchea, Afghanistan); and
-- will abide by our commitments vis-a-vis Taiwan but will
expect patience in handling this complex issue.
The Chinese have made abundantly plain in word and deed
that they want your visit to be a success; Premier Zhao stated
this explicitly to Don Regan in Beijing. To this end the
Chinese made unprecedented concessions to us on logistical and
administrative requirements for your visit; they yielded ground
on a bilateral tax treaty which you will sign; they geared up,
on instruction of Premier Zhao, for serious negotiations on a
bilateral investment treaty; they decided to issue a temporary
authorization to Northwest Airlines to begin passenger service
to China, thus avoiding a serious civair confrontation; they
conducted a remarkably cordial round of consultations with us
on textiles, the most acrimonious of all our bilateral economic
issues; and, during recent working-level talks on possible U.S.
military sales, they have displayed renewed interest in
investing our relationship with a strategic dimension.
Beijing wants several things from your visit (before
setting a date for Zhao's trip here they pushed hard for our
agreement on your reciprocal visit). First, China's reformist
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i t
leadership -- Deng, Hu and Zhao in particular -- has a personal
and political stake in presenting to doubting opponents the
appearance and reality of a thriving bilateral relationship
with the U.S. This need accounts in part for the mild public
complaint by Zhao on departing Washington last January that he
hoped for more "substantive" talks with you-in Beijing. It
also accounts in some measure for the extraordinary Chinese
effort to assure that your visit commences on a positive note.
Second, having apparently concluded both that they had
earlier misread your China policy and that you will likely win
reelection in November, they want to solidify a personal
relationship with you.
Third, they will seek to turn the favorable atmosphere
following the Zhao visit to their advantage in pressing you to:
take note of Chinese concerns on Taiwan (especially our arms
sales and manifestations of stronger support in Taiwan and this
country for Taiwan "independence" formulas); ease further the
restrictions you have already relaxed on transfer of advanced
technology; pledge your support for measures to increase
Chinese access to concessional U.S. financing; ease
restrictions on Chinese textiles; and, perhaps, intervene to
break the impasse in our nuclear and investment negotiations.
Foreign Minister Wu recently cited these issues, along with
amending the Foreign Assistance Act and renewing the Maritime
Agreement, as "issues of importance" to China.
Finally, global considerations will shape the Chinese
substantive and rhetorical approach to your visit. Over the
past two years they have carefully calibrated their policies
toward the Soviets and us so as to gain maximum leverage and to
do minimum damage to China's coveted image of a developing
nation that pursues an independent foreign policy. China's
rhetoric is crafted to lend credence to this "independent"
stance by linking the U.S. and Soviets as "hegemonist" powers.
But despite recent efforts to ease Sino-Soviet tensions,
Beijing acknowledges to one and all that it sees the USSR as
the principal current and long-term threat to its security.
Moreover, the Chinese do not conceal their assessment that only
ties with the U.S. and the West hold out promise of affording
access to the high technology, advanced learning, investment
capital, and modern managerial skills which are vital to the
success of their modernization program.
II. ISSUES
1. Taiwan. The Chinese have muted their public criticisms
of us, and let pass with minimum complaint our 1983 arms
sales. But Zhao pressed you in January on the Taiwan Relations
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Act; Zhao and others have manifested rising concern over the
political' clout of elements in the U.S. favoring various
formulas for Taiwan independence; and Deng has aired a
"confederal" scheme to resolve the Taiwan question which he may
raise with you in Beijing. In response, your best course of
action is to reaffirm our consistent stand and note the
requirement for patience.
2. Korea. The Chinese will anticipate a continuation of
your dialogue with Zhao in January on ways we might work in
tandem to reduce tension on the Korean Peninsula. We have
recently sought again to explore Chinese willingness and
ability to be helpful -- either as direct participants or "from
the sidelines" -- should multilateral talks get underway. The
Chinese did not respond, and have displayed little inclination
or ability to involve themselves in multilateral discussions at
this juncture. We should at minimum reaffirm our interest in
having the Chinese engage themselves in a process aimed at
creating the conditions for stability on the Peninsula.
3. Concessional financing. Premier Zhao has asked for US
concessional loans for major power projects, including nuclear
plants. Don Regan told him in March that although the US was
amending the legislative prohibition on aid with China, we had
no bilateral aid program planned and China would have to rely
on the World Bank and private sources.
4. Discriminatory measures. Along with the aid
prohibition, China's leaders have criticised other elements of
"US discrimination" against China. As evidence, they cite the
lack of preferential tariffs (GSP), annual review of most
favored nation status (under the Jackson Vanik amendment),
controls on technology, textile restrictions, dumping and
countervailing duty petitions, and the court suit for repayment
of Huguang railway bonds. We see these as the result of
security, political, or economic factors which are not
traceable to any "discrimination" against China, and we have no
plans to change our current policies.
5. Grain Trade. You will want to make clear that China
must meet its commitment under our Long Term Grain agreement to
purchase and ship 12 million tons of US grain in 1983-84. Our
data on shipments indicate the Chinese may fall short.
Fulfillment of the commitment affects a major part of US-China
trade and is important for China's credibility.
6. Export Controls. Chinese leaders appreciate your
liberalization of export controls last year, but may question
its implementation and complain that China is the only friendly
country whose exports are reviewed by COCOM. The statistics on
licensing and the new technical levels of exports show that the
policy is being successfully implemented, although we are still
making
rl~
Q =n ot- 11
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improvements. We do not believe that there is the necessary
consensus among our allies to drop China from COCOM nor do we
believe that this course is advisable from the standpoint of
security.
7. Asian Development Bank. Since November 1982, China has
been talking to the US, Japan, and the President of the ADB
about membership. China does not seek to expel Taiwan from the
ADB, but does seek a change to "associate member" status for
Taiwan. This would require modification of the ADB charter,
which Bank members oppose. Moveover, Resolutions by Congress
have called for Taiwan to retain full membership. We have told
the Chinese, most recently during the Regan visit, that they
should work out arrangements acceptable to all parties with the
Bank President.
Q cor` r
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Secretary/President Memo on China Trip
drafted: EAP/C:DWKeyser/HLange/ RBoucher:dwk
W3134E x-1004 3/30/84
clearances: EAP/C:RHHowarth/DMAnderson
EAP/RA/TC:MPratt
P:RPerry
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EB/EWT:HLevine
EB/FPD:BFurness
EAP/EP:JGregory
EB/ODF:DRehfuse
H:RMyers
AID/ASIA:JEsposito
EB/TDC:MBarrera
E:KWeaver
L/EA:PNorton
EAP:WABrown
EAP:PWolfowitz
T:JMussomeli
C"! Fo" fN m r--t-
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Ccntral Intdlisence Agency
DIRECTORATE OF INTELLIGENCE
15 March 1984
Dena-Zhao Talks with Brzezinski--An Assessment
While it is easy to overinterpret the sometimes Delphic
pronouncements of Chinese leaders, Deng and Zhao's remarks to
Zbignew Brzezinski and other members of a Georgetown University
delegation on 22 February a good deal
about current Chinese
Chinese have often used visits by such unofficial US
groups in the past for tactical purposes--to air their concerns
in strong terms, thus hoping to place subsequent official
visitors on the defensive even before their arrival. In this
case, however, both Deng and Zhao appeared anxious initially to
signal their satisfaction with Zhao's visit in January and
President portAChinatcontinuesttohattachhtotcloserrelationsd
economic importance
with the US.
Both became defensive and critical of US policy only after
some members of the delegation accused China of inconstancy in
its policies. In rebuttal, Deng and Zhao sought to cast
themselves as friends offering advice, but they strongly
criticized US foreign policy in general and toward China in
particular over the past few years. We believe this sharp
reaction reflects underlying Chinese fears of being relegated to
a less important strategic role in US calculations and a deep
seated Chinese concern that China will be treated as less than an
equal by the US--just as Moscow dealt with Beijing during the
1950's.
This memorandum was produced by the China Division of the Office
of East Asian Analysis
in a mayubetaddressed
request. Questions s
ision
Di
v
to the Chief of the China
25X1
25X1
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Shifting Strategic Assessment
The Chinese assessment of the strategic balance has changed
significantly over the past few years. During much of the 1970's
China saw the US and its NATO allies on the defensive and Soviet
power and influence expanding. Hence, China favored a "united
front" strategy to check Soviet expansion and viewed
normalization of relations with the US as a key ingredient of
that strategy.
But, since 1980 the Chinese believe the balance has begun to
shift back in favor of the West. The US and its allies have
greatly strengthened their military power and resolve in the face
of the Soviet challenge, while the Soviets have become
increasingly beset by domestic and foreign policy problems. Deng
indicated the Chinese see little chance of that changing under
Chernenko's "transitional" leadership.
From China's perspective this shift has had both positive
and negative consequences, some of which Beijing clearly did not
anticipate. Over the short run, for example, it has lessened
Chinese concern over the Soviet threat to their security. It has
also allowed them to drop their call for a united front, to
distance themselves from the US publicly, and to adopt a more
flexible strategy toward the Third World designed to enhance
Chinese influence and combat the Soviets. The Chinese have been
particularly critical of those US policies toward the Third World
they regard as counterproductive and as playing into Soviet
hands, such as US support for Israel. China's resulting
"independent" policy has also reflected its deep suspicion of US
policy on Taiwan.
But as the US has moved to rebuild its military strength and
political resolve, the Chinese fear it has:
Stimulated US-Soviet competition in Asia that threatens
to weaken China's position and thus make it even less of
a factor in the strategic calculations of both
superpowers.
Raised in turn the prospect that China will have even
less leverage with the US over Taiwan as time goes by.
China's Advice
Deng and Zhao's complaints and advice to the delegation
should be seen as reflecting these concerns and therefore as
self-serving. Both, for example, emphasized that the United
States should temper its military buildup and seek to ease
tensions with the USSR by seeking an arms accord. They also held
the United States should avoid military actions in the Third
World or close association with the so-called "four unsinkable
aircraft carriers"--Taiwan, South Korea, South Africa and Israel.
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In our view, China would prefer to see a rough strategic
parity maintained that gives China maximum maneuverability and
leverage on both sides. Increased superpower tensions and arms
competition in particular will only complicate China's ability to
deal with resulting growth in Soviet military capabilities in
Asia. The Chinese are also concerned that the Soviets might
still succeed in driving a wedge between the US and its European
allies by exploiting public concern in Europe over the deployment
of more US missiles there.
At the same time, China wants to develop closer economic,
political and perhaps even military ties with the United States,
but to avoid tarnishing its reputation with the Third World and
"progressive" parties in the developed countries, or with
nationalists at home concerned with the issue of Taiwan.
Deng also criticized US policy in East Asia, especially US
support for allies and friends like South Korea and Taiwan,
asserting that this impedes the search for stability in the
region. Deng stressed his desire to get out of the "blind
alleys" of the past which, in the case of Korea, could result in
what he called a "slide into war." He referred to President
Carter's troop withdrawal plan as a "good idea." He offered his
own vaguely defined proposals stressing "confederation" as a
means to stabilize the situations not only in Korea and Taiwan,
but also Hong Kong, Macao and the Nansha (Spratly) Islands. We
believe Deng sees a stronger US as less willing to compromise on
issues like Taiwan and Korea on terms advantageous to the PRC or
its North Korean ally.
Finally, Deng and Zhao focused on alleged American
unwillingness to modify US laws and procedures (e.g. Taiwan
Relations Act, Export Administration procedures) to accommodate
China. This again reflects in part China's concern that the US
no longer heeds China as much as in the past as a strategic asset
against the USSR, and therefore will be less likely to
accommodate Chinese interests. Zhao was especially outspoken in
asserting that China "will never agree" to be a "second class
partner" of the US, but will resist just as it resisted Soviet
efforts to make China a "junior partner" in the past.
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PP RUEAIIB
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INFO RUMJNG/AMCONSUL HONG KONG 3783
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RUEHMO/AMEMBASSY MOSCOW 5750
RUEHKO/AMEMBASSY TOKYO 4253
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S E C R E T BEIJING 02915
EXDIS
EZ2:
E.O. 12356: DECL: OADR
TAGS: PREL, TW, CH, US
SUBJECT: DENG XIAOPING CONVERSATION WITH CSIS DELEGATION
1. SECRET - ENTIRE TEXT.
2. SUMMARY. ON FEBRUARY 22 DENG XIAOPING MET WITH A
GROUP FROM THE GEORGETOWN CENTER FOR STRATEGIC AND
INTERNATIONAL STUDIES HEADED BY ZBIGNIEW BRZEZINSKI.
IN CHARACTERISTICALLY FRANK AND VIGOROUS FASHION, DENG
REVIEWED THE HISTORY OF SINO-AMERICAN RELATIONS OVER
THE LAST TEN YEARS, ACKNOWLEDGING THE ELEMENTS OF STRA-
TEGIC COOPERATION THAT HAD PLAYED AN IMPORTANT PART IN
THE RELATIONSHIP IN THE EARLY YEARS, WHILE TOUCHING ON
THE ALLEGEDLY NEGATIVE ROLE OF THE TAIWAN RELATIONS ACT
SINCE ITS PASSAGE. DENG ARGUED THAT THE CHANGE IN
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CHINA'S FOREIGN POLICY TO DOWNPLAY SINO-AMERICAN STRA-
TEGIC COOPERATION WAS THE RESULT OF A REVERSION ON THE
PART OF THE U.S. TO THE DULLES DOCTRINE OF UNSINKABLE
AIRCRAFT CARRIERS -- U.S. STRONGHOLDS ABROAD SUCH AS
SOUTH KOREA, TAIWAN, ISRAEL AND SOUTH AFRICA, WHICH
ALIENATE THE THIRD WORLD FROM THE U.S. AND RAISE QUES-
TIONS ABOUT THE U.S. VIEW OF CHINA OVER THE LONG TERM.
DENG DESCRIBED THE NOW ABANDONED U.S. INTENTION (UNDER
THE EARLY CARTER ADMINISTRATION) TO WITHDRAW U.S.
TROOPS FROM SOUTH KOREA AS A GOOD STRATEGIC MOVE,
WHILE ACKNOWLEDGING THAT KOREA CONSTITUTED A SPECIAL
SITUATION BECAUSE OF ITS REGIONAL IMPACT. IN ALL THESE
CASES, HOWEVER, THE U.S. SHOULD RECOGNIZE THE STRATEGIC
DISADVANTAGE RESULTING FROM WIDESPREAD INTERNATIONAL
OPPOSITION TO U.S. POLICIES.
3. ON SINO-SOVIET RELATIONS, DENG SAID HE EXPECTED NO
CHANGES FROM ANDROPOV'S POLICIES UNDER THE CERNENKO RE-
GIME, AND THUS NO DRAMATIC CHANGES IN SINO-SOVIET RE-
LATIONS. DENG ALSO SPOKE AT LENGTH OF HIS INTEREST IN
THE IDEA OF "CONFEDERATION," BOTH AS A SOLUTION TO THE
HONG KONG AND TAIWAN CASES THAT "COULD BE EXPLAINED TO
OUR PEOPLE" AND THAT COULD RESULT IN "ONE CHINA AND
THREE SYSTEMS." THIS OR OTHER SOLUTIONS TRANSCENDING
THE QUESTION OF SOVEREIGNTY ALSO COULD BE APPLIED TO
THE KOREAN PENINSULA CASE AND EVEN TO OTHER INTERNATIONAL
PROBLEMS, SUCH AS THE SPRATLY ISLANDS, THE FALKLANDS
AND JAPAN'S NORTHERN ISLANDS.
4. DENG'S CRITICISMS OF U.S. STRATEG9C POLICY REMIND
US THAT CHINA'S INDEPENDENT FOREIGN POLICY HAS ANOTHER
DIMENSION BEYOND THE CHINA-US-USSR TRIANGULAR RELATION-
SHIP: IT STRENGTHENS THIRD WORLD SUPPORT FOR CHINA ON
THE TAIWAN QUESTION. HIS BROAD BRUSH SUGGESTIONS ABOUT
THE USE OF THE "CONFEDERATION" APPROACH EMPHASIZE AGAIN
THE SCOPE OF HIS REGIME'S PROPOSALS FOR HONG KONG AND
TAIWAN AND CHINESE READINESS TO ACCEPT THE LOOSEST SORT
OF CONFEDERATION AS AN APPROACH TO RESOLVING TENSIONS
ON THE KOREAN PENINSULA. END SUMMARY.
5. PRC LEADER DENG XIAOPING ON FEB 22 HELD LENGTHY
TALKS WITH VISITING U.S. GROUP FROM GEORGETOWN CENTER
FOR STRATEGIC AND INTERNATIONAL STUDIES. DENG GAVE
SOMEWHAT NEW TWISTS TO OLD THEMES, PARTICULARLY ON
THE REASON FOR DIMINISHED PRC INTEREST IN PARALLEL
STRATEGIC POLICIES AND ACTIONS WITH USG. DENG ALSO
FLOATED A RATHER CLOUDY NEW WAY OF THINKING ABOUT
PROBLEMS OF SOVEREIGNTY VS ACTUAL CONTROL IN CASES
OF HONG KONG, TAIWAN, KOREA, MALVINAS/FALKLANDS, ETC.
EMBASSY COMMENTS APPEAR AT END OF THIS MESSAGE. AMB.
HUMMEL WAS PRESENT, TOOK NOTES, AND DRAFTED THIS.
6. LED BY DR. AMOS JORDAN, THE CSIS GROUP INCLUDED
MELVIN LAIRD, ZBIGNIEW BRZEZINSKI, SENATOR FRANK
MURKOWSKI, CONGRESSMAN MATTHEW MC HUGH, MR. ERIC
HOTUNG (COSMOPOLITAN PROPERTIES AND SECURITIES),
MR. JOHN MAROUS (WESTINGHOUSE), AND DR. LERRIT GONG
(CSIS).
7. DENG OPENED BY REFERRING, AS HE OFTEN DOES, TO HIS
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OWN AGE AND ALLEGED FRAILTY, AND TO HIS REDUCED OFFICIAL
DUTIES. HE SAID HE WAS LOOKING FORWARD TO MEETING, AND
HOSTING LUNCH FOR, PRESIDENT REAGAN IN APRIL, AND NOTED
FROM THE TELEVISION HE HAD SEEN THAT THE PRESIDENT, AT
73, IS VERY VIGOROUS. DENG EMPHASIZED THE NEED FOR
GREATER UNDERSTANDING BETWEEN THE U.S. AND PRC, SO THAT
EXDIS
E.O. 12356: DECL: OADR
TAGS: PREL, TW, CH, US
SUBJECT: DENG XIAOPING CONVERSATION WITH CSIS DELEGATION
THE FURTHER PROGRESS IN BILATERAL RELATIONS, WHICH BOTH
SIDES WANT, WOULD BE FACILITATED.
8. BRZEZINSKI RAISED A SUBJECT THAT TOOK UP MOST OF
THE MEETING. HE POINTED OUT THAT US/PRC RELATIONS BEGAN
WITH A SHARED STRATEGIC PERSPECTIVE. DENG HAD RE-
EMPHASIZED THE STRATEGIC ELEMENT IN TALKS WITH BRZEZINSKI
IN 1978 AND 79, WHEN DENG AGREED THAT SHARED PERSPECTIVE
MADE POSSIBLE EXPANDED RELATIONS IN OTHER FIELDS. HOW-
EVER, NOW THAT PERSPECTIVE HAS DIMINISHED, AND THE CSIS
GROUP HAD BEEN TOLD IN RECENT DAYS THAT THE CURRENT U.S.
MILITARY BUILDUP IN FACT CONTRIBUTES TO THE GLOBAL ARMS
RACE, AND INCREASES THE DANGER OF WAR. BRZEZINSKI EM-
PHASIZED THAT IN THE U.S. VIEW, THE U.S. BUILDUP IN FACT
DETERS WAR AND DETERS SOVIET ADVENTURISM. HE CLOSED
WITH THE OBSERVATION THAT IF THE TWO COUNTRIES DIVERGE
STRATEGICALLY, THEN U.S. POPULAR SUPPORT FOR THE RELA-
TIONSHIP, WHICH IS STRONG AND GETTING STRONGER, WILL BE
REDUCED.
9. DENG EMBARKED ON A LONG (AND SOMEWHAT TORTURED)
EXPLANATION. THE FOLLOWING IS NEAR-VERBATIM.
10. I HAVE BEEN, AND All, AN ENTHUSIASTIC SUPPORTER OF
GOOD RELATIONS WITH THE U.S. I SHALL REVIEW THE HISTORY
OF THOSE RELATIONS IN THE LAST FEW YEARS. MAO, ZHOU,
NIXON AND KISSINGER PRODUCED A TURNING POINT IN RELA-
TIONS. OUR CHINESE STRATEGY THEN, LED BY MAO, WAS TO
PR?DUCE AN ANTI-SOVIET UNITED FRONT FROM EAST TO WEST,
IN THE FACE OF A VERY AGGRESSIVE SOVIET STANCE, WHERE
THE SOVIETS WERE INTERFERING IN MANY AREAS OF THE WORLD.
THE SOVIETS WERE ON THE OFFENSIVE WHILE THE U.S. WAS ON
THE DEFENSIVE. I REMEMBER TELLING A U.S. CONGRESSIONAL
GROUP IN '74 OR '75 THAT EACH STEP FORWARD BY THE
SOVIETS IS LIKE EATING A PIECE OF THE U.S. AT THE END
OF WW II, THE U.S. WAS IN A CONTROLLING POSITION, BUT
EVERY STEP BY THE SOVIETS DIMINISHED THE U.S. THE
U.S. WAS TOO FAT AND TOO WEAK. SOVIET MILITARY STRENGTH
THEN EXCEEDED THAT OF THE U.S. AND WESTERN EUROPE COMBINED.
WE TOLD ALL OF THE VISITORS TO CHINA THAT TO DEAL WITH
SOVIET AGGRESSION THEY SHOULD NOT RELY ONLY ON THE U.S.,
BUT SHOULD PRESENT A UNITED FRONT, FROM EAST TO WEST.
11. I TOLD PRES. CARTER THAT RHETORIC WAS NOT ENOUGH
TO DEAL WITH THE SOVIETS, AND THAT WE NEEDED SERIOUS WORK,
FOR INSTANCE FULL DIPLOMATIC RELATIONS BETWEEN
THE U.S. AND CHINA, A CHINA-JAPAN TREATY OF PEACE AND
FRIENDSHIP, ETC. THE PEAK PERIOD IN US/PRC RELATIONS
WAS THE ESTABLISHMENT OF DIPLOMATIC RELATIONS. AFTER
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THAT THERE WERE TWISTS AND TURNS, PARTICULARLY THE
PASSAGE IN TUE U.S. OF THE TAIWAN RELATIONS ACT. WE
PROTESTED THEN, BUT NOT VERY STRONGLY, BECAUSE THAT
WAS ON THE EVE OF THE PRESIDENTIAL ELECTION CAMPAIGN
AND WE THOUGHT WE MIGHT CAUSE DIFFICULTIES FOR THE
ADMINISTRATION (COMMENT: TRA ACTUALLY WAS PASSED,
AND CHINESE PROTESTED IN APRIL 1979). BUT WE HAVE
NEVER UNDERESTIMATED THE INJURY TO CHINA CAUSED BY THE
TRA.
12. ON THE GLOBAL SCENE THE U.S. HAS AUGMENTED ITS
MILITARY STRENGTH, AND WE DO NOT CRITICIZE THAT, BUT
THE U.S. DOES SOME THINGS WITH WHICH WE DO NOT AGREE.
WE HOPE THAT OUR U.S. FRIENDS WILL ASSESS THE THINGS
YOU ARE DOING, SOME OF WHICH ARE NO, POPULAR WITH
MANY OF THE WORLD'S PEOPLES. (I AM SAYING THESE THINGS,
YOU NOTE, IN A CALM ATMOSPHERE WITH THE CONSTRUCTIVE
PURPOSE OF INCREASING OUR UNDERSTANDING OF EACH OTHER.)
13. MANY GOOD IDEAS PREVIOUSLY DEVELOPED BY U.S.
STRATEGISTS HAVE NOW DISAPPEARED. FOR INSTANCE SOME
IN THE U.S. ONCE ADVOCATED WITHDRAWAL OF YOUR FORCES
FROM SOUTH KOREA, BUT THAT IDEA HAS BEEN ABANDONED.
THAT WOULD HAVE BEEN A GOOD STRATEGIC MOVE. THEN
THERE IS THE QUESTION OF ISRAEL. I ASKED PRES. CARTER
WHY THE U.S. SHOULD BE HOSTILE TO 140 MILLION ARABS
AND IN FAVOR OF ISRAEL, AND POINTED OUT TO HIM THAT
IF THE U.S. CHANGED THAT POLICY THE SOVIETS COULD NOT
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DO ANYTHING IN THE MIDDLE EAST. I ADVOCATED THIS FROM
THE POINT OF VIEW OF DEALING WITH SOVIET DESIGNS WORLD-
WIDE. WHY SHOULD THE U.S. TAKE THE SIDE OF THE UK IN
THE FALKLANDS DISPUTE? DID YOU THINK THE UK WAS NOT
STRONG ENOUGH (LAUGHING)? YOU SEEM TO THINK THAT, IF
YOU ARE STRONG FROM THE MORAL POINT OF VIEW, THAT'S
ENOUGH. THERE ARE SIMILAR MISTAKES IN THE CARRIBEAN.
14. THUS THE CHANGE IN OUR GLOBAL VIEW CAME ABOUT BECAUSE
OF CHANGES BY THE U.S., NOT BY CHINA. THERE HAS BEEN A
CHANGE IN THE U.S. ATTITUDE TOWARD TAIWAN, ALSO. THE
SOVIETS HAVE BEEN AGGRESSIVE, AND WE DO NOT OBJECT TO A
U.S. BUILDUP TO CORRECT THE BALANCE. THE PROBLEM IS
WHAT YOU WILL DO LATER WITH THAT STRENGTH WHICH MAY
NOT HAVE THE SUPPORT OF THE CHINESE PEOPLE.
15. IN MY MIND SOME U.S. POLITICAL FIGURES HAVE REVIVED
PARTS OF AN OLD DULLES DOCTRINE. IF THE U.S. WANTS TO
REGAIN THE INITIATIVE, YOU SHOULD ABANDON YOUR IDEA OF
UNSINKABLE AIRCRAFT CARRIERS -- ALL FOUR OF THEM IN
SOUTH KOREA, TAIWAN, ISRAEL, AND SOUTH AFRICA. THE
SOUTH KOREA SITUATION IS A SEPARATE QUESTION BECAUSE IT
IMPACTS ON AN ENTIRE REGION. BUT I WILL TALK ABOUT
TAIWAN, WHERE BECAUSE OF YOUR IDEA OF AN UNSINKABLE AIR-
CRAFT CARRIER YOU CANNOT SAY THAT YOU ARE A TRUE FRIEND
OF THE ONE BILLION CHINESE PEOPLE. IN THE MIDDLE EAST,
BECAUSE YOU SUPPORT 3 MILLION ISRAELIS, YOU JEOPARDIZE
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RELATIONS WITH 140 MILLION ARABS. BY YOUR SOUTH AFRICA
POLICIES YOU ALIENATE ALL OTHER AFRICANS. THUS THERE
ARE INSOLUBLE PROBLEMS BETWEEN YOURSELVES AND THE 4 BIL-
LION PEOPLE (SIC) OF CHINA, THE ARABS, AND AFRICA.
16. PRES. REAGAN SHOULD MAKE A SOBER ASSESSMENT. HOW-
EVER, I WILL OF COURSE NOT GO THIS FAR OR THIS DEEPLY
IN MY TALKS WITH THE PRESIDENT. STILL, YOU SHOULD CON-
SIDER WHETHER YOU HAVE GAINED OR LOST IN ALIENATING SO
MANY PEOPLE BY YOUR POLICIES OF THESE FOUR UNSINKABLE
CARRIERS. I AM NOT DELIBERATELY TRYING TO BE CRITICAL,
BUT WANT TO MAKE A HELPFUL ASSESSMENT AS WE SEE IT.
17. BRZEZINSKI THANKED DENG FOR HIS FRANK AND USEFUL
COMMENTS, AND FOR SHARING HIS OPINIONS. HOWEVER, HE
SAID, HE WANTED TO DIFFER WITH DENG BOTH ON CENTRAL
ISSUES AND ON PERIPHERAL ONES. FOR ONE THING, THE U.S.
HAS BEEN DETERRING THE SOVIETS MUCH MORE EFFECTIVELY NOW
THAN IN THE RECENT PAST. AS A RESULT, THE WHOLE WORLD
HAS BENEFITTED. THE US/CHINA RELATIONSHIP IS CENTRAL
TO WORLD PEACE, AND WE WANT TO STRENGTHEN IT. WE DO
NOT DELIBERATELY CREATE PROBLEMS OVER TAIWAN. THERE
ARE DIFFERENT VIEWS AMONG DOMESTIC GROUPS IN THE U.S.
OVER TAIWAN, BUT IN THE CONTEXT OF WIDENING OF US/PRC
RELATIONS, HE WAS CONFIDENT THAT TAIWAN WOULD BE
ADDRESSED IN WAYS CONSISTENT WITH THE DESIRES OF THE
CHINESE PEOPLE. ALSO, CENTRAL TO US/PRC RELATIONS,
HE WAS CONFIDENT THAT TAIWAN WOULD BE ADDRESSED IN WAYS
CONSISTENT WITH THE DESIRES OF THE CHINESE PEOPLE.
ALSO, CENTRAL TO US IS THE ISSUE OF PEACE IN KOREA.
IF WE WERE TO WITHDRAW OUR FORCES FROM THE SOUTH, THAT
WOULD CREATE INSTABILITY UNLESS PRECEDED BY POLITICAL
AGREEMENTS BETWEEN NORTH AND SOUTH.
18. JORDAN ASKED FOR DENG'S ASSESSMENT OF THE NEW
LEADERSHIP IN THE USSR.
19. DENG REPLIED: I KNEW ANDROPOV, BUT I DO NOT KNOW
CHERNENKO. I THINK THERE WILL NOT BE ANY CHANGE.
CHERNENKO CANNOT DECIDE ALONE ON ANY POLICY. ANDROPOV
HAD SOME ABILITY TO DECIDE ALONE, BUT NOT CHERNENKO.
ANDROPOV WAS MORE CAPABLE AND MORE KNOWLEDGEABLE THAN
BREZHNEV. NO, THERE WILL BE NO CHANGES, AND THEY WILL,
BE MORE RIGID AND IT WILL BE DIFFICULT FOR THEM TO
MAKE BIG DECISIONS. SO, I THINK CHERNENKO IS A TRANSI-
TIONAL FIGURE. THEY HAVE NOT SOLVED THEIR SUCCESSION
PROBLEMS, AND THIS DEMONSTRATES THEIR DIFFICULTIES.
20. AS FOR SINO-SOVIET RELATIONS, WE WILL STICK TO
OUR INSISTENCE THAT THEY MUST REMOVE THE "THREE
OBSTACLES." HOWEVER, WE ARE NEIGHBORS, AND SO LACK OF
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PROGRESS SHOULD NOT PREVENT DEVELOPMENTS IN SOME
FIELDS SUCH AS TRADE AND EDUCATION. HOWEVER, PROGRESS
WILL BE LIMITED AND WITHOUT DRAMATIC CHANGES.
21. ON KOREA, WE BOTH HOPE FOR STABILITY ON THE
PENINSULA. IN ORDER TO HAVE STABILITY, KIM IL SUNG'S
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PROPOSAL FOR CONFEDERATION IS GOOD. I HAVE BEEN
THINKING FOR. MANY YEARS THAT THE IDEA OF CONFEDERATION
MAY BE A GOOD THING FOR CHINA. OUR POLICIES TOWARD
TAIWAN ARE REASONABLE. THERE ARE TWO DIFFERENT SYSTEMS,
CAPITALIST AND SOCIALIST, BUT THERE COULD BE ONE CHINA
WITH TWO SYSTEMS. IN THE CASE OF HONG KONG ALSO,
THERE COULD BE ONE CHINA AND TWO SYSTEMS, SO THAT
ALTOGETHER IN CHINA THERE COULD BE THREE SYSTEMS,
WITH THOSE IN TAIWAN AND HONG KONG DIFFERENT. THIS
IS A GOOD FORMAT ALSO FOR KOREA, TO AVOID A SLIDE INTO
WAR TO SETTLE THAT PROBLEM. THIS SORT OF FORM COULD
BE EXPLAINED TO OUR PEOPLE. IN FACT, IN MANY INTER-
NATIONAL DISPUTES YOU SHOULD CONSIDER CAREFULLY OUR
POLICY ON KOREA -- IN TERMS OF ONE KOREA WITH TWO
SYSTEMS TO INCREASE LONG-TERM STABILITY. WE WILL
RESUME SOVEREIGNTY OVER HONG KONG WITHOUT ANY HARM
TO THE LIVING STANDARDS OF THE PEOPLE THERE. SOME
DAY GERMANY MAY UNIFY ITSELF WITH TWO DIFFERENT
SYSTEMS. WE MUST WORK OUT OF SOME BLIND ALLEYS WE
ARE IN.
22. ON ANOTHER TOPIC, JAPAN, THEY HAVE ASKED US TO
SUPPORT THEIR STAND ON THEIR NORTHERN ISLANDS, WITH
DISCUSSIONS WITH THE SOVIETS. I TOLD THE JAPANESE THIS
COULD NOT BE DONE NOW, BUT PERHAPS LATER. MAYBE IN DUE
COURSE THERE COULD BE JOINT DEVELOPMENT OF THE AREAS,
WITHOUT DECIDING ON THE SOVEREIGNTY QUESTION. ALSO IN
THE MALVINAS, MAYBE A NEW WAY OF THINKING COULD BE
USED; OTHERWISE, THE ARGENTINES WILL NEVER GIVE UP
THEIR CLAIM. THERE ARE MANY SIMILAR PROBLEMS IN THE
WORLD THAT NEED NEW WAYS OF THINKING. FOR INSTANCE,
OUR NAN-SHA ISLANDS (IN THE SOUTH CHINA SEA) HAVE
ALWAYS BEEN CHINESE TERRITORY. TAIWAN HAS OCCUPIED
ONE, WHICH SHOWS THAT IT IS CHINESE TERRITORY, BUT
VIETNAM, THE PHILIPPINES AND MALAYSIA HAVE ALSO OCCU-
PIED SOME OF THESE CHINESE ISLANDS. WE MUST INSIST ON
CHINESE SOVEREIGNTY REGARDLESS OF WHO OCCUPIES THEM.
BUT CAN WE FIND SOME NEW APPROACH? OTHERWISE, THERE
COULD BE LONG-TERM AND EVEN EXPLOSIVE PROBLEMS. I AM
MERELY TALKING FROM THE TOP OF MY MIND. IF THE OLD
WAYS OF DEALING WITH SUCH THINGS ARE NOT GOOD ENOUGH,
CANNOT WE FIND NEW WAYS?
23. SOME OF MY REMARKS MAY NOT BE WELL THOUGHT OUT.
BUT WE MUST EARCH FOR WAYS TO INCREASE STABILITY AND
PEACE IN THE WORLD. WE CHINESE ARE NOT LESS HOPEFUL
FOR PEACE THAN OTHERS. WE MUST CONCENTRATE ON OUR
MODERNIZATION PROGRAMS. YOU GENTLEMEN ARE ARCHITECTS
OF POLICIES, AND I INVITE YOU TO CONSIDER SUCH NEW WAYS.
24. I HAVE ENJOYED MEETING YOU.
25. COMMENT. DENG'S PRESENTATION WAS SOMEWHAT DIFFUSE,
BUT AS DELIVERED TO THE DELEGATION, IT WAS CHARACTERIS-
TICALLY VIGOROUS. DENG APPEARED HEALTHY AND ALERT,
WITH A CLEAR SENSE OF THE POINTS HE WANTED TO MAKE.
AMONG THESE ASPECTS OF HE DISCUSSION WHICH STRIKE US
MOST STRONGLY:
- -- FIRST, EVEN AS ONE OF THE MAIN ACTORS, DENG IS
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PREPARED TO SKEW HISTORY SOMEWHAT TO EMPHASIZE CHINA'S
"CONSISTENT" VIEW OF THE TAIWAN RELATIONS ACT AS A
CENTRAL IMPEDIMENT TO GOOD U.S. RELATIONS. CHINA
MAY WELL HAVE EASED UP ON ITS EARLY REACTION TO THE
TRA IN CONSIDERATION OF U.S. DOMESTIC POLITICAL CONSID-
ERATIONS. MORE LIKELY, DENG'S OWN DOMESTIC POLITICAL
PROBLEMS LEFT HIM UNABLE OR UNINTERESTED IN CASTING MUD
ON HIS MOST VISIBLE POLITICAL SUCCESS. IN ANY EVENT,
DENG'S VERSION WILL CONSTITUTE REVEALED TRUTH ON THIS
POINT FOR THE CHINESE.
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- -- SECOND DENG'S REITERATION OF THE "UNSINKABLE
AIRCRAFT CARRIERS" LINE IN HIS CRITICISM OF U.S.
STRATEGIC DOCTRINE IS, AS USUAL, SPARKED BY CONCERN
THAT THE U.S. SEES ITS RELATIONSHIP WITH TAIWAN AS A
STRATEGIC ASSET FROM WHICH TO "CONTAIN" CHINA, I.E.J.
AS EVIDENCE THAT THE U.S. CONTINUES TO SEE CHINA AS A
POTENTIAL ADVERSARY. WE NOTE, HOWEVER, THAT DENG'S
COMMENTS ABOUT THE PROBLEMS CAUSED FOR THE U.S. BY OUR
SUPPORT OF SOUTH KOREA, TAIWAN, SOUTH AFRICA AND ISREAL
ON THIS OCCASION HIGHLIGHT "POPULAR" OPPOSITION TO
U.S. POLICIES AMONG THIRD WORLD COUNTRIES. DENG NEVER
REFERS DIRECTLY TO CHINA'S READJUSTMENT OF FOREIGN
POLICY TO A MORE INDEPENDENT STANCE IN THE LAST FEW
YEARS, NOR TO CHINA'S SHIFT TOWARD SUPPORT OF THIRD
WORLD POSITIONS ACROSS THE BOARD. HE ALSO OMITTED
ANOTHER CONSIDERATION WE KNOW TO HAVE BEEN A STRONG
FACTOR - CHINESE SENSITIVITY TO SOVIET AND OTHER
CRITICISMS THAT THE PRC MERELY FOLLOWED ALONG BEHIND
U.S. POLICIES. BUT HIS COMMENTS ARE A REMINDER THAT
CHINA'S "INDEPENDENT" FOREIGN POLICY HAS A DIMENSION
BEYOND THE U.S.-USSR-CHINA TRIANGULAR RELATIONSHIP.
- -- ON KOREA, DENG'S COMMENTS MANIFEST THE
AMBIVALENT ATTITUDE THAT HAS FOR SOME TIME MARKED
CHINESE PUBLIC COMMENTS. ON THE ONE HAND, U.S. WITH-
DRAWAL FROM THE PENINSULA IN THE LATE 70'S WOULD HAVE
BEEN A GOOD STRATEGIC MOVE; ON THE OTHER HAND, KOREA
IS A SEPARATE QUESTION FROM THAT OF THE OTHER AMERICAN
STRONGHOLDS BECAUSE IT IMPACTS ON AN ENTIRE REGION.
- -- DENG'S BROAD-BRUSH SUGGESTIONS ABOUT THE USE
OF THE "CONFEDERATION APPROACH" EMPHASIZE AGAIN THE
SCOPE OF HIS REGIME'S PROPOSALS FOR HONG KONG AND
TAIWAN AND CHINESE READINESS TO ACCEPT THE LOOSEST
SORT OF PAPER CONFEDERATION AS AN APPROACH TO RESOLVING
TENSIONS ON THE KOREAN PENINSULA. SIMILARLY HIS
SUGGESTION THAT WAYS MIGHT BE FOUND TO TRANSCEND THE
ISSUES OF SOVEREIGNTY THAT UNDERLIE OTHER TERRITORIAL
DISPUTES IS AN ENCOURAGING SIGN IN THE CONTEXT OF THE
SPRATLY AND SENKAKU DISPUTES. ALTHOUGH VAGUE AND
ILL-DEFINED, THIS "THINKING OFF THE TOP OF THE MIND"
REFLECTS DENG'S PENCHANT FOR BOLD STROKES THAT CUT AT
THE PRACTICAL PROBLEMS FACING CHINA AND HIS READINESS
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TO SHORT-CHANGE LEGAL CONSIDERATIONS WHICH TO FOREIGN
OBSERVERS MIGHT APPEAR CRUCIAL, IF NOT INSUPERABLE;
SUCH RUMINATIONS BY DENG OFTEN EVOLVE INTO SPECIFIC
POLICY PROPOSALS. HULL
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Director of Secret
Central
Intelligence
l~&,
Prospects for
US-Chinese Relations
During President Reagan's
Visit to China
Special National Intelligence Estimate
Secret
SNIE 13/9-84
30 March 1984
25X1
Copy 3 4 2
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SNIE 13/9-84
PROSPECTS FOR
US-CHINESE RELATIONS
DURING PRESIDENT REAGAN'S
VISIT TO CHINA
Information available as of 30 March 1984 was
used in the preparation of this Estimate.
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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organization of the Department of State.
Also Participating:
The Assistant Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
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CONTENTS
Page
KEY JUDGMENTS .................................................................................................... 1
DISCUSSION .............................................................................................................. 3
Recent Developments in US-Chinese Relations ................................................... 3
The United States in China's "Independent" Foreign Policy ......................... 4
What China Seeks From the United States and the Visit ................................... 4
Beijing's Goals for President Reagan's Visit ...................................................... 4
Expanded Trade and Technology Transfer .................................................. 5
Reassurance on the Taiwan Issue .................................................................. 6
Strategic Issues ................................................................................................ 8
Constraints on US-Chinese Cooperation ............................................................... 8
Domestic and International Public Opinion ..................................................... 9
The Limits on Strategic Cooperation With the United States ........................ 9
Containing Tensions With the Soviet Union .................................................... 9
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KEY JUDGMENTS
We believe that China will work to make the visit a success in both
substance and appearance. Beijing's major expectations will be in the
economic area-especially on prospects for trade and improved tech-
nology transfers-where it will attempt to remedy the "substantive"
deficiencies that Premier Zhao perceived in his visit to the United
States. In particular, the Chinese want to gain greater access to US
technology and investment capital to enable them to further their
modernization programs. We doubt they will reciprocate for any US
concessions.
Perhaps Beijing's primary objective in receiving the President will
be to solidify a personal relationship at the highest levels of the two gov-
ernments to give a sense of continuity to relations with the United
States. To achieve this, the Chinese are likely to make certain that the
visit has the appearance of significant accomplishment. They will invest
the visit with ceremonial pomp and lavish detail in order to convey a fa-
vorable impression to the American public.
Beijing probably believes that the President, in this election year,
would like to portray his trip to China as a clear success, thus giving
China extra room to exploit it to their benefit, particularly by pressing
for concessions in the economic and technology areas. It may also press
for a general Presidential affirmation of US willingness to consider the
transfer of advanced military technology.
Taiwan remains the one issue on which the relationship could
founder. The Chinese hope the United States will handle its relations
with Taiwan in a way that allows Beijing to pursue broader objectives
with the United States. Although Beijing already has protested the
announced level of US arms sales to Taiwan for fiscal year 1985, they
may also press the issue vigorously during the visit. Given the recent
growth of Chinese concern over possible support in the United States-
especially in the Congress-for Taiwan independence, the President is
likely to be pressed by the Chinese leaders for reassurances that the
United States adheres to a one-China policy. Furthermore, they may
specifically ask for an administration commitment to oppose any
Congressional actions in support of Taiwan independence.
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The Chinese are likely to engage in strategic discussions with the
President somewhat broader in scope than those undertaken during
Zhao's visit, but the Chinese will attempt to avoid projecting a public
image of collaboration with the United States. The Chinese leaders will
probably use these talks to urge a greater US role in Kampuchea and Af-
ghanistan. The Chinese will reaffirm their interest in stability on the
Korean Peninsula and support the North Korean interest in tripartite
talks.
Beijing clearly believes that Chinese interests are best served for
the foreseeable future by productive and stable relations with the
United States, but there are also equally clear constraints on how far it is
willing to permit those relations to develop. One such limit is its need to
be perceived by the rest of the world as not under US (or Soviet)
influence. There are sharp limits on the extent to which China will
cooperate with the United States on strategic issues. This is more than
merely a tactic to enable Beijing to show that it pursues an "independ-
ent" foreign policy. It represents the balance that China is attempting to
strike in its foreign policy as it moves somewhat closer to the United
States but continues to pursue other goals that at times conflict with US
policies.
Beijing opened its dialogue with the United States in the early
1970s to obtain a strategic counterweight to Soviet power. This remains
a basic consideration as Beijing formulates its policies toward the United
States. China will use its contacts with the United States-especially the
President's visit-to attempt to underscore the commonality of US-
Chinese security concerns regarding the Soviet involvement in Afghani-
stan and Southeast Asia. Beijing may also hope to increase pressure on
Moscow to make concessions on issues of major security concern to
China but does not appear optimistic about a breakthrough.
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DISCUSSION
Recent Developments in US-Chinese Relations
1. The atmosphere surrounding US-Chinese rela-
tions has improved substantially over the past year.
Although still circumscribed by differences in a num-
ber of areas, these relations have passed through
several difficult periods to achieve a new stability and
direction. The successive visits to China in 1983 of the
Secretaries of State, Commerce, and Defense, as well
as visits to Washington of five Chinese ministers
during the same period, helped revitalize these rela-
tions and laid the groundwork for the exchange of
visits between President Reagan and Premier Zhao.
2. While far from complete, the process of stabiliza-
tion advanced during the past year largely because
Beijing recognized that its interests are served better
by healthy Sino-US relations than by continued mutu-
al acrimony. It appears that China made this adjust-
ment sometime in the spring of 1983-following the
Secretary of State's talks in Beijing-after a period in
which it had managed a number of relatively minor
irritants in a way that suggested a willingness to allow
relations to stagnate.
3. Several factors encouraged this shift toward im-
proving relations. The Chinese realized that the pres-
ent administration might well be returned to office for
another term in 1984. At about the same time, the
United States eased controls on the transfer of technol-
ogy to China. These two events appear to have
convinced the Chinese leaders that it was both neces-
sary and possible to do business with the Reagan
administration. The Chinese were also concerned last
spring that the administration was beginning to accord
a lower priority to relations with China. Beijing may
have believed that this was at least in part the result of
the generally sour tone that it had given to relations.
4. In addition to these calculations were those relat-
ing to the USSR. In the spring of 1983, Beijing
appeared dissatisfied with the pace of bilateral talks
with the USSR, and it may have concluded that the
apparent impasse in Chinese-US relations had reduced
Moscow's incentive to reach agreements with China.
At the same time, Chinese public statements suggested
some concern that the USSR and the United States
might be moving toward a moderate reduction in their
bilateral tensions, a step that could weaken Chinese
freedom of maneuver between the superpowers. Sub-
sequent events, in particular the KAL incident, con-
vinced China that there was no immediate prospect of
a reduction in US-Soviet tensions. Moreover, Beijing
was reassured by the firm US position at INF talks
opposing regional sublimits that discriminated against
the East Asian countries.
5. Improved relations with Washington also ap-
peared attractive because of China's recognition that
Soviet power around China's periphery continued to
increase with the upgrading of forces poised against
China and Japan, the steady deployment of SS-20s in
the East, the continued expansion of the Soviet Pacific
Fleet, and steady expansion of the Soviet presence in
Vietnam.
6. As a result of these factors, China has muted
somewhat its criticisms of the United States, with the
exception of a period in late November and early
December 1983 when a flareup over Congressional
actions relating to Taiwan momentarily appeared to
jeopardize the exchange of visits between Zhao and
the President. Beijing quickly backed off from its
implied threats-voiced by party Chairman Hu Yao-
bang in Tokyo-to cancel Zhao's visit, but only after it
received what it could regard as reassurances on US
policy toward Taiwan.
7. Chinese domestic politics have also played a role
in setting the tone of Beijing's responses to US actions.
We are, however, unable to determine what weight to
give this factor. It appears, for instance, that residual
opposition to improved relations with Washington
began to emerge at the time of the November flareup
over Taiwan and may have sharpened the Chinese
response to US actions by fusing itself with the current
campaign against spiritual pollution. At present, how-
ever, we believe that Deng is able to contain the
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opposition and will probably continue to be able to do
so over the coming months, in part because there is
agreement among Chinese leaders concerning the
strategic importance of the relationship.
The United States in China's "Independent"
Foreign Policy
8. The recent improvement in Sino-US relations has
taken place within the context of a readjustment of
Chinese foreign policy over the past three years.
Described by Beijing as "independent," this foreign
policy has sought to accommodate conflicting desires
and interests in a manner that gives Beijing maximum
flexibility and room for maneuver between the super-
powers. The main features of this policy have been
efforts to ease tensions with the USSR, moves to
improve Chinese standing in the Third World, greater
contacts with the industrially advanced countries, and
a redefinition of interests in dealing with the United
States.
9. This readjustment was caused by a number of
factors, including Beijing's uncertainty over US poli-
cies toward Taiwan; concern over policies in the Third
World, which increased the cost to China of close
identification with the United States; and indications
of a Soviet desire to ease tensions with China. China
continued to share with the United States the percep-
tion that the Soviet Union represented its primary
security threat, but it was no longer seen as either
necessary or desirable for China to be seen in a
"united front" with the United States against Moscow.
Behind these tactical circumstances there was also a
broad Chinese theoretical reassessment of the world
situation. This reassessment has been based on Beijing's
perception of a slow but progressive economic and
political weakening of both the United States and the
USSR in relation to the rest of the world. In the
Chinese view, over the long term this situation will
diminish the ability of the superpowers to dominate
the world scene and to control their respective blocs.
This, in turn, has led China to believe that over the
next decade and more there will be progressively
greater opportunities for other powers, including Chi-
na, to seek gains and to assert their own interests with
less reference to the United States and the USSR.
10. This same perception has led the Chinese to
believe that they can maneuver more freely between
the United States and the USSR. Thus, for instance, in
dealing with the USSR China has concluded that the
Soviets' own economic, political, and military prob-
lems have made the threat of an immediate Soviet
attack on China less likely, enabling China to permit
tensions to ease and to pursue such goals as increased
trade. China has also concluded that it can and should
criticize US international conduct in areas such as the
Middle East and southern Africa, both to distance
itself from the United States and to attempt to provide
an outside source of support to those groups that do
not want close association with either Washington or
Moscow.
11. Beijing has followed this approach actively in
Western Europe, where it publicly has opposed new
missile deployments of both superpowers. However, in
private conversations the Chinese have reportedly
sometimes supported deployment and sometimes op-
posed it. In condemning both US and Soviet "hegem-
onism," Beijing has given moral support to the Euro-
pean peace movement.
12. One of the difficulties that Beijing has created
for itself has been that of structuring relations with the
United States in a manner compatible with its revised
perspectives on the international situation-the so-
called independent foreign policy. In recent years
Chinese policy has sought to strike a workable balance
between the strategic importance of Sino-US relations
and China's ambitions to be independent in the world.
This has led to inconsistencies in Chinese behavior and
has accounted for some of the continuing tension in
Sino-US relations. Currently, the Chinese leaders have
moved toward closer relations with the United States,
without, however, muting their independent foreign
policy line. This has occurred in part because China
has a less immediate fear of a Soviet attack and also as
a consequence of its perception that the United States
is no longer on the defensive in dealing with the USSR
in the world.
What China Seeks From the United States and
the Visit
Beijing's Goals for President Reagan's Visit
13. We believe that China will work to make the
visit a success in both substance and appearance.
Beijing's major expectations will be in the economic
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area-especially on prospects for trade and improved
technology transfers-where it will attempt to remedy
the "substantive" deficiencies that Zhao perceived in
his visit to the United States. There also will be greater
attempts to achieve breadth in political and strategic
discussions, but the Chinese will avoid projecting a
public image of collaboration with the United States.
In addition, Beijing is almost certain to seek reassur-
ances that US support for a one-China policy has not
changed.
14. Perhaps Beijing's primary objective in receiving
the President will be to solidify a personal relationship
at the highest levels of the two governments. This will
be done in the expectation that the current administra-
tion will probably be in office through 1988. The
Chinese appear anxious at this point to give a sense of
continuity to relations with the United States, attach-
ing great importance to the establishment of good
personal relationships between leaders. Deng probably
has initiated this effort, hoping to leave to his succes-
sors a solid US-Chinese relationship at the political and
personal levels. To achieve this, the Chinese are likely
to make certain that the visit has the appearance of
significant accomplishment. They will invest the visit
with ceremonial pomp and lavish detail to convey a
favorable impression to the American public.
15. Expanded Trade and Technology Transfer.
Unlike President Nixon's visit to China in 1972, when
the Chinese wanted to discuss strategic concerns,
Beijing will probably attempt to use the favorable
atmosphere that they have generated this time mainly
to press for progress in the economic sphere. In
particular, they want to gain greater access to US
technology and investment capital as part of their
effort to obtain from the outside world the equipment
and capital that will enable them to further their
modernization programs. They hope that the United
States will provide broad access to its modern technol-
ogy and to its capital markets to assist them to achieve
this goal. We doubt, however, that they will recipro-
cate for any such US concessions. China also looks to
the United States to continue to provide specialized
education to its future technicians and managers; there
are currently over 10,000 Chinese students in the
United States, almost all of whom are in the areas of
science and technology.
16. Access to US trade and capital markets is
important to China both intrinsically and as a means
of leverage to gain greater access to the technology and
investment capital of other advanced countries. Since
China is determined to avoid the appearance of close
association with any single advanced country, includ-
ing the United States, Beijing hopes to deal with all of
the advanced countries of the West and also, to a
limited degree, the USSR. China, moreover, sees that
good relations with the United States will greatly ease
access to the Japanese and the West Europeans.
Finally, China also looks to the United States to lead
the way in easing COCOM restrictions on technology
exports.
17. Beijing probably believes that the President, in
this election year, would like to portray his trip to
China as a clear success, thus giving them extra room
to exploit it to their benefit, particularly by pressing
for concessions in the economic and technology areas.
One tactic they might pursue, for example, would be
to delay substantive negotiations on unresolved current
issues (for instance, the possibilities of nuclear, invest-
ment, or tax treaties) until the President arrives,
hoping for last-minute US concessions to obtain signa-
tures on important agreements during the trip. Al-
though there will certainly be an element of pressure
in Chinese tactics, this pressure will be controlled by
Beijing's current calculation that its interests are best
served by good relations with the United States and
that it will gain more over the longer term by restraint
than by confrontation.
18. In addition to possibly seeking final agreement
on a number of treaties, the Chinese are likely to
pursue expanded economic relations in other areas:
- They will certainly press for greater relaxation
of US controls on access to advanced technology,
perhaps presenting a wish list. They are likely to
cite statistics selectively on license applications
and on allegedly low rates of approvals of items
contained in various lists submitted to the Unit-
ed States over the years.
- They will also press for greater administration
support for changes by Congress that would
make China eligible for concessional loans from
the United States.
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The Chinese leaders will devote some time
during the visit to probing US thinking on
Chinese membership in international financial
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institutions. Depending on progress already
made in talks with officials of the Asian Devel-
opment Bank and with its members, China may
use the visit to press the United States to take a
more active stand on Chinese membership in the
Bank, and it will make clear its willingness to
allow Taiwan to remain in the Bank in some
form. The visit of Treasury Secretary Regan to
China in March will provide a clearer picture of
Chinese intentions in this area.
19. China is also likely to raise trade issues. Having
limited the import of US agricultural commodities in
retaliation for US limitations on China's access to the
US textile market, Beijing will press the President to
ease these restrictions. It will hold out prospects for a
revival of the growth in US exports to China, but will
at least implicitly tie this to the need for the United
States to curtail its restrictions on the entry of Chinese
goods to the US market. It is possible that Beijing will
raise the issue of its membership in GATT, and US
willingness to support its membership.
20. During the visit the Chinese may reaffirm their
interest in US arms technology and military exchanges
and press for a further relaxation of US controls, but
we believe that the bulk of these talks will continue to
take place between military experts on the two sides
and with US manufacturers. They may press for a
general Presidential affirmation of US willingness to
consider the transfer of advanced military technology.
Beijing may use the President's visit to announce dates
for the visit to the United States of Defense Minister
Zhang Aiping, a step that might give impetus to the
transfer of military technology. China is also discussing
arms purchases with a number of West European
countries, and we believe that it hopes to diversify its
sources of supply and to avoid becoming closely
associated as an arms client with any Western country,
including the United States.
21. Reassurance on the Taiwan Issue. Taiwan
will remain the single issue upon which the relation-
ship could founder. It is the one issue on which the
Chinese have required assurances from the United
States since the relationship began in 1971, and it will
continue as such for the foreseeable future. At the
present time, the Chinese hope the United States will
handle its relations with Taiwan in a way that allows
Beijing to pursue broader objectives with the United
States.
22. Nonetheless, the President will be read a firm
statement on Chinese policy toward Taiwan. The
Chinese understand the limits of US tolerance for such
lectures, but the great importance of this issue and its
extreme political sensitivity in China will require a
lengthy exposition of Chinese views, probably by Deng
himself. Although the Chinese may reiterate general
warnings concerning Taiwan, we believe that they will
not make specific demands or lay down ultimatums.
Substantively, Beijing will put its strongest emphasis
on the need for palpable reductions in arms sales to
Taiwan. They may revert to earlier efforts to draw the
United States into prior consultations concerning the
level of each year's sale of arms to Taipei.
23. The Chinese have already protested the an-
nounced level of US arms sales to Taiwan for fiscal
year 1985. They may press the point more vigorously
during the President's visit. The strength of Beijing's
statements during the visit will be based on its judg-
ment concerning US long-term intentions in this area,
and the Chinese will seek reassurances from the
President that there will be a decline over time in the ~.
levels and quality of US arms sales to Taipei.
24. Given the recent growth of Chinese concern
over possible support in the United States-especially
in the Congress-for Taiwan independence, the Presi-
dent is likely to be pressed by the Chinese leaders for
reassurances that the United States adheres to a one-
China policy, that it will not inject any role of
officiality into its contacts with Taiwan, and that it
will not encourage those supporting independence for
Taiwan. Furthermore, they may specifically ask for an
administration commitment to oppose any Congressio-
nal actions in support of Taiwan independence. They
may also strongly urge that US officials cease discuss-
ing in public the subject of Taiwan.
25. Overall, the Taiwan portion of the President's
talks will be frank, but probably nonconfrontational,
and will be aimed at -keeping the record clear with
both the United States and the hardliners in Beijing.
The latter need reassurance that Chinese interests have
been safeguarded. The Chinese will also attempt to
demonstrate that their policies for reunification with
Taiwan are reasonable. They will probably repeat
what Deng told a private American delegation in
February: China envisages some form of "confedera-
tion" with Taiwan that would constitute "one China
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Highlights of Sino-US Commercial Relations
Nature of Relationship
Value a
(million US $)
E-S Pacific
Joint venture: Great Wall Hotel, Beijing
36
Foxboro
Joint venture: produces electronic
5
instruments
Beatrice Foods
Joint venture: Guangmei Foods
5
Westinghouse
Steam generator technology
31
Combustion Engineering
Power plant boiler technology
ARCO/Santa Fe
Lotus
Kowin Development
Joint venture: Jinhua Hotel, Xian
5
Bechtel Corp.
Feasibility study for coal mines
NA
Baker Marine Corp.
Joint venture to build/lease drilling rigs
10
American Motors Corp.
Joint venture to produce
16
four-wheel-drive jeeps
Wafer fabrication equipment for
digital watches (pending approval)
Owens-Illinois, Inc.
Modernize a glass container plant
NA
Beloit Corp.
Papermill machinery
7
R. J. Reynolds
Joint venture to produce cigarettes
6
McDonnell-Douglas
Two MD-80 jetliners
40
Amaee Holding Corp.
Joint venture: supplies offshore
oil facilities
Fluor
Consultancy and design for coal mines
NA
Emhart Corp.
Machinery to upgrade tire plant
NA
S. Samash & Sons
Joint venture: produces silk fabrics
NA
General Electric
220 diesel-electric locomotives
200
Harnischfeger
Power shovel technology and equipment
NA
John Deere
Farm equipment and technology
NA
Chevron/Texaco
Oil exploration
NA
IBM
11 Mainframe 4300-series computers
NA
Boeing
Five 737s and one 747 jetliner
140
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with two systems." In essence, the Chinese have
probably decided that they stand a better chance of
favorably influencing US policies on Taiwan-particu-
larly on the issue of arms sales-by demonstrating
"reasonableness" on the question of reunification rath-
er than by uttering threats. Consequently, as during
Zhao's visit, the Chinese will probably back off from
an initially hard line on Taiwan and tacitly acknowl-
edge by the end of the visit that relations can continue
to improve as long as the United States lives up to the
three communiques dealing with Taiwan issued be-
tween 1972 and 1982.
26. Strategic Issues. The Chinese are likely to
engage in strategic discussions with the President
somewhat broader in scope than those undertaken
during Zhao's visit. The Chinese leaders will probably
use these talks to urge a greater US role in Kampuchea
and Afghanistan. Beijing may be concerned that the
MIA issue might induce the United States to ease its
pressure on Hanoi on the Kampuchean issue, and thus
the Chinese leaders may press for more active and
visible US support for the anti-Vietnamese coalition in
Kampuchea. The Chinese will reaffirm their interest
in stability on the Korean Peninsula and support for
the North Korean interest in tripartite talks. China,
however, almost certainly will continue to resist being
drawn into any talks, in the initial phase at least, and
will continue to support the North Korean bargaining
position that currently calls for confederation and
opposes cross recognition.
27. It is possible that the Chinese leaders will also
advise the United States to take steps to reduce
tensions with the USSR. For instance, the Chinese may
cite the concrete advantage in an early INF agreement
that would reduce or at least freeze SS-20 deployments
in the East. Beijing's concern over the consequences of
the growth of US military power was strikingly evi-
dent in conversations that Deng and Zhao separately
held in February 1984 with a private US delegation.
Both leaders revealed concern over what the United
States may do with the military strength it has ac-
quired and seemed to hold the United States at least
partially responsible for the aggravation of interna-
tional tension in recent years. In the same conversa-
tions, Deng stated his concern that a more active US
policy will not be in China's interests and, in particu-
lar, could lead the United States to look to Taiwan as
an "unsinkable aircraft carrier," that is, as a strategic
asset that the United States would be unwilling to
abandon. Zhao, moreover, revealed extreme Chinese
sensitivity to the implication of US dominance in the
US-Chinese relationship and underscored Beijing's
continuing need to be respected and to be perceived as
an equal in relations with the United States. We
believe that this is intended to signal Chinese concern
that the United States will be held responsible by large
parts of world opinion for any further worsening of
the international atmosphere and that China would
find it increasingly difficult to be seen cooperating
with the United States under these circumstances.
28. Zhao's willingness to discuss Sino-Soviet rela-
tions during his visit to Washington in January 1984
and China's announcement of these discussions
marked a striking departure from recent. Chinese
practice. We believe that Beijing did this to signal
displeasure with Moscow's continued buildup around
China's periphery, Moscow's tactics in the bilateral
talks, such as a failure to make basic concessions, and
to pressure the Soviets to begin to meet Chinese
demands in these talks. The extent to which China will "
be willing to consult, and to be seen consulting, with us
on strategic issues during the visit will be determined
in part by the state of Sino-Soviet relations and
particularly by the results of the fourth round of Sino-
Soviet talks in March.
29. We doubt that there will be anything approach-
ing a breakthrough in Sino-Soviet relations prior to the
President's visit, and thus the Chinese leaders will
probably give the President a fairly extensive account
of their differences with the USSR. Such a discourse
will be intended in part to reassure the United States.
At the same time, however, if Sino-Soviet relations are
discussed, Beijing may again announce this fact pub-
licly to prod the Soviets and to try to demonstrate that
the Chinese enjoy a high degree of maneuverability
within the strategic triangle. The Chinese may also see
a renewed willingness to discuss Soviet affairs with the
United States as an incentive for the United States to
be more forthcoming on bilateral US-Chinese issues.
Constraints on US-Chinese Cooperation
30. Beijing clearly believes that Chinese interests
are best served for the foreseeable future by produc-
tive and stable relations with the United States, but
there are also equally clear constraints on how far it is
willing to permit those relations to develop. One such
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limit is its need to be perceived by the rest of the
world as not under US (or Soviet) influence. Another is
its very practical need to keep tensions with the Soviet
Union at a manageable level.
Domestic and International Public Opinion
31. China will be highly conscious of the various
audiences, including the Soviets, who will be observing
how it handles the President's visit. Much of Beijing's
conduct will be determined by this factor. This will
place limits on the substance of the talks and will
influence the public characterization of the President's
visit. We believe that Deng and his colleagues are
conscious of the need to demonstrate clearly and
repeatedly to opposing domestic leadership elements
the benefits that China derives from relations with the
United States and that they want to be seen as
vigilantly protecting Chinese interests on sensitive
issues such as Taiwan. This, we believe, will continue
to impose limits on the development of ties between
China and the United States and often makes the
achievement of almost any significant agreement a
lengthy and arduous task.
The Limits on Strategic Cooperation With the
United States
32. The Chinese, during Zhao's visit to Washington
in January 1984, went further than they had in recent
high-level visits to the United States to highlight areas
of agreement with the United States. Nonetheless, they
have kept up private and public criticisms of US
policies in various areas of the world, and they
continue to label the United States a "hegemonist"
power. Thus there are sharp limits on the extent to
which China will cooperate with the United States on
strategic issues. This is more than merely a tactic to
enable Beijing to show that it pursues an "independ-
ent" foreign policy. It represents the balance that
China is attempting to strike in its foreign policy as it
moves somewhat closer to the United States but
continues to pursue other goals that at times conflict
with US policies.
33. Underscoring these conflicts with some US poli-
cies, Beijing has publicly stated that it will not estab-
.ish a strategic partnership with the United States.
China will keep its distance from the United States on
selected world issues, will oppose some US policies
intended to counter the USSR, and will not engage in
such activities as joint planning. Nonetheless, China
does tacitly cooperate with the United States on
selected strategic issues of joint concern. It will contin-
ue to do so while attempting to maintain wide options
in dealing with the USSR and the Third World.
Containing Tensions With the Soviets
34. The Soviet threat has always been a key factor
in Chinese calculations relating to the United States.
Beijing opened its dialogue with the United States in
the early 1970s to obtain a strategic counterweight to
Soviet power, and this remains a basic consideration as
Beijing formulates its policies toward the United
States. China is equally conscious, however, of the
need not to overly alarm the Soviets about the possibil-
ity of a US-Chinese alliance directed against the USSR.
This has led to a carefully balanced approach in which
China seeks to hold Moscow at bay by strengthening
ties with the United States, but not to the point that
Moscow would be unwilling to pursue some relaxation
of tensions with Beijing.
35. Thus, a major Chinese objective in recent years
has been to maintain a distance-but not equidis-
tance-from each of the superpowers and to conduct
relations with each that are neither "hot nor cold."
Beijing's desire to maintain at least a degree of
evenhandedness in its contacts with the United States
and the USSR was demonstrated most recently by the
attendance of Vice Premier Wan Li at Andropov's
funeral, Chinese participation in the fourth round of
talks with the Soviets in Moscow in March, and the
Chinese invitation to First Deputy Premier Arkhipov
to visit China in May.
36. China will use its contacts with the United
States-especially the President's visit-to attempt to
underscore the commonality of US-Chinese security
concerns regarding the Soviet involvement in Afghani-
stan and Southeast Asia. Beijing may also hope to
increase pressure on Moscow to make concessions on
issues of major security concern to China but does not
appear optimistic of a breakthrough. At the same time
China will also continue to take steps to ease tensions
with Moscow, believing that an expanded dialogue
with the USSR enables it to demonstrate that China
pursues an independent foreign policy.
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