REMARKS BY DR. OTTO E. GUTHE OF THE CENTRAL INTELLIGENCE AGENCY AT THE ASIAN STUDIES CONFERENCE, INDIANA UNIVERSITY, BLOOMINGTON, INDIANA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67-00318R000100740001-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 20
• Document Creation Date: December 23, 2016
• Document Release Date: May 2, 2013
• Sequence Number: 1
• Publication Date: November 12, 1959
• Content Type: OPEN SOURCE

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REMARKS BY
DR. OTTO E. GUTHE
OF THE
CENTRAL INTELLIGENCE AGENCY
AT THE
ASIAN STUDIES CONFERENCE,
Indiana University,
Bloomington, Indiana
12 November 1959
8:00 pm, (CST)
ASIAN STUDIES AND OUR NATIONAL SECURITY
I. Introduction
It is a privilege to be here this evening and to participate
with you in this Conference.
I have been impressed by the truly remarkable expansion
over the last decade in the attention given to Asian studies by
American scholars, academic institutions, and foundations, and
? this has come -- I am sure not by chance -- at a time when our
position of leadership in the Free World and our involvement in
Asia have called for a fuller understanding of this important
part of the world.
A tremendous challenge to all men of freedom is found in
Asia. To place this challenge in a meaningful context, I am
going to emphasize a few of the things that are happening there.
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Later, I want to make some remarks on how your colleges
and universities, through Asian studies, can provide further
insight on Asian problems affecting our security interests.
II. The Nature of the Challenge
A. Communist China
We cannot escape the influence of Communist China in
Asia. Here, we have a nation hostile to our interests, rapidly
growing in power and influence. We can foresee the possibility
-- indeed the probability ? of a formidable, unfriendly China,
a nation of a billion souls by 1975, a nation led by dedicated and
ruthless Communists, unrelenting in their antagonism to us.
Even the Soviets show some stirrings of worry about this
rising power.
The present leaders in China are arrogant and aggressive
in their actions, and seem bent on maintaining international
tensions and pressure on neutralist governments.
The growing, naked power of the Chinese Communists
already has to be reckoned with -- and may, within the lifetime
of many of you, present the Free World with a challenge
equally dangerous to that now posed by the Soviet Union. And
indeed, there is no reason to expect their ambitions to be
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limited to Asia. They are already showing signs of increased
interest in Africa, South America, and even in the Caribbean.
Militarily, they have built up a formidable force, made
possible by Soviet backing and by an economic development
program that has been pushed with a fervor and ruthlessness
not attempted by any other nation in modern history.
Communist China is standing increasingly on its own
feet. It has assumed a posture of near-equality in its business
relationships with the Soviet Union. Aside from military loans,
all that Peiping has received in long-term credit from Moscow
over the past ten years has been two economic loans totaling
$430 million. All of Red China's imports from the USSR have
been on a pay-as-you-go basis since 1956, and China at the
same time has been paying off the Soviet loans of previous
years.
Under forced draft methods, there have been
impressive increases in Communist China's industrial output.
In 1958, during the "Great Leap Forward," a new high in the
rate of overall economic growth was attained by pressing for
increases in physical output at almost any cost.
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The Chinese clearly are building up their heavy industry.
They are plowing back into investment a large and increasing
proportion of their total output. They intend to assure continued
and rapid economic growth -- and their chances, based on the
record, are good. But these advances cannot mask the needs
of a hungry people.
These people have been mercilessly exploited by their
Communist leaders -- witness the marshalling of labor resources
for the Great Leap Forward and the practices which accompanied
the introduction of the communes, which the peasants appear
to have bitterly resented. In establishing the communes,
Peiping followed an unchartered course. The experimentation
involved painful backing and filling. Agriculture on the Mainland
has not moved ahead as rapidly as industry ? and diets, rather
than improving, have decreased in quality, and living standards
remain low. However, recognition of the need for reducing
popular discontent and providing for worker incentives may
force the Red leaders to bring about some betterment.
Communist China, at great cost in human suffering,
is making substantial progress toward transforming an
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overcrowded and underdeveloped agricultural country into an
industrial nation. This example may attract rather than repel
those Free Asians who want to make the giant step forward into
the industrial age -- who, may look to industrialization by
Communist-type methods as the quickest and surest way.
All of you, I am sure, have read recent reports about
the gross overstatements in Chinese Communist economic
claims, and of dissension between the Soviets and the Chinese.
These reports may raise doubts in your minds regarding the
future of this threat I have been talking about.
Although Peiping recently admitted in dramatic fashion
that many of their statistics of output for 1958 were far too high,
the country nevertheless continues to move forward industrially.
The original excessive claims for grain production in 1958 were
also reduce& However, there appears to have been a substantial
increase even so, largely because of good weather in that year.
Unquestioning acceptance of Peiping's claims would, of course, be
foolhardy, but gross underestimation of China's developing strength
would be equally dangerous for our national security.
Now, on the question of Sino-Soviet dissension ? Mr.
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Khrushchev's visit to Peiping last month resulted in reports that
have been variously interpreted to indicate strain in the alliance.
There are many compelling reasons for these nations to continue
an association of mutual accommodation, even though they may
not see eye to eye in approaching certain questions of mutual
interest. Certainly the USSR and Communist China appear united
in wanting Western influence and Free World institutions eliminated
from Asia.
B. Penetration into Free Lands
While the Chinese Communists are hard at work internally,
striving to meet the highly ambitious goals set by their leaders,
they are also busily engaged in penetration of other parts of the
world.
There is a growing body of evidence that the Chinese
Communist Party, enjoying a new feeling of strength and having
consolidated its gains, is taking a greater role in the guidance
and direction of other Communist parties, particularly in the
underdeveloped areas of the world.
Soviet defector Alexander Kaznacheev recently told a
press conference in Rangoon that, while the Soviet Union and
Communist China were working together in Asia, the principal
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responsibility for Burma has been assigned to the Chinese
Communists. It is suggested that this may also be true to
some extent in the remainder of Southeast Asia. The growing
importance of Peiping as a center of Communist authority in
this area is also attested by the increasing number of Com-
munist leaders who travel frequently to Peiping, occasionally
staying months at a time with little public report of their
activities. Moreover, it is generally accepted as a fact in
some Asian countries that the local Communist party is
financed through the Chinese Communist Embassies.
While this Chinese Communist influence, both in
party affairs and in economic matters, has manifested itself
first and most intensely in South and Southeast Asia, it is not
confined to those areas. In the Near East, in Africa, and
in Latin America, Communist China is making a real effort
to establish trade missions and technical aid projects. Com-
munist leaders from these areas also are paying frequent and
extended visits to Peiping as well as to Moscow. The Chinese
Communists apparently now share with the Soviets some of the
responsibility for Communist penetration and subversion in
these areas more remote a from their Mainland stronghold.
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In Asia, some overseas branches of the Communist-
controlled Bank of China -- not to be confused with the Bank con-
trolled by Nationalist China -- have been used as instruments for
financial support of Peiping's causes among the Overseas Chinese.
For instance, there were numerous reports that the gains made in
Burma by the Communist-led National United Front in the April
1956 elections were due, in large part, to the generous financial
aid supplied by the Chinese Communists through the Bank. Direct
assistance has been given by the Bank to Communist-dominated
communities of Overseas Chinese in the form of low interest,
easy term loans. Pro-Communist newspapers in Asia have
readily obtained Bank loans, as have other businessmen who favor
Communism.
The Bank of China, however, is by no means the only
instrument employed to win over and exploit the Overseas Chinese
communities, particularly those in Southeast Asia_ Chinese
Chambers of Commerce have, in some cases, been infiltrated by
pro-Communists, and their economic influence has been employed
for the subversion of the allegiance of these people. As another
tactic, the bait of profits from trade with the Mainland is dangled
before Overseas Chinese merchants to win their adherence, Also,
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young students have been encouraged to go to the Mainland for
their higher education, in the expectation that many will return
as indoctrinated Communists to work within their communities.
There is resistance in these communities to such subversion,
but the degree of Communist success is worthy of close attention.
Another approach is through labor union penetration.
The All-China Federation of Trade Unions, for example, seeks
to dominate the labor movements in the less developed Asian
countries. Here, the local groups are weak financially and
possess little knowledge of the true function of unions.
In Indonesia ? an outstanding target for this type of
Communist subversive activity ? labor unions are affiliated
with and controlled by political parties. The dominant union is
the Communist-controlled SOBSI federation which claims a
membership of over 2-1/2 million and at the minimum controls
at least a million workers in key sectors of the economy.
SOBSI, in exploiting "nationalist" and "anti colonial's
feelings of the Indonesians, is slowly corrupting the chances
for the non-Communist labor federations to gain strength in
that country.
Of great potential danger to Free World security is the
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attempt to create a Communist-controlled Pacific and Asian
Regional Dockworkers organization. The first step in this was
the Conference held in Japan in May 1959. A second Conference
is planned for May 1960. The power that such an organization
could have over shipping in the Pacific is obvious.
Now, what about competitive co-existence? This term
to the Soviets implies essentially a transitional phenomenon. They
believe that only the Communist system will survive the competi-
tion. In Peiping on September 30th, Khrushchev re-emphasized
?this confidence in recounting passages of his speech in Pittsburgh.
"I said we challenged the capitalist countries to peaceful competition
... I told my American audience, We warn you -- look out, we
are sure to wine! " He went on to say, "... socialism and com-
munism ... will leave capitalism far behind and inevitably will
supplant it on the arena of history."
In "competing" with the free World, the Bloc countries
have used many means to attain political ends, including economic
penetration. You all know of innumerable instances of this
penetration. Let me only say that the avenues of approach in
this activity are as varied as the nations to which these efforts are
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directed. This variation is a reflection of opportunity, planning,
and flexibility -- not of uncertainty and caprice. Regarding the
nature of the Bloc economic offensive in this wide area, it does
appear clear that the Bloc often tailors its effort to exploit either
an existing domestic tendency, a nationalistic ambition, or a
potential source of dissension and conflict with the major Western
powers. It believes that the gambit selected will reduce Western
influence and, sooner or later, attract ? or force -- the nation
in question closer to the Sino-Soviet Bloc. The weapons available
to the Bloc countries for their economic offensive are principally
trade, financial aid in the form of credits and grants, and
technical and scientific aid.
The countries of South and Southeast Asia are prime
targets. They have received roughly 50 percent of the more than
$3 billion of credits and grants extended since 1954 by the
Bloc to some countries of the Free World. Of this total aid,
nearly all of the grants -- about $170 million -- have been
provided to these countries. Nine-tenths of the Bloc's aid to
South and Southeast Asia has been economic. In this
area were almost one half of the 4, 700 non-military
Bloc technicians active in less developed countries
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during the first half of this year.
? Up to the presents Communist China has played a minor
role in providing credits and technical aid. It has offered only
6 percent of the total Bloc aid extended to the Free World in the
past five years. For some time to come, China may have to rely
on the European Soviet Bloc to carry a major part of the offensive
in this field of economic aid.
However on the commercial side, Communist China
accounts for more than one half of the Bloc's trade with South and
Southeast Asia. But this trade is subject to frequent and su_Aen
fluctuations. In 1958, increased exports to Southeast Asia of certain
Communist Chinese goods, such as textiles, caused considerable
concern especially to Japan. This offensive evaporated as suddenly
as it appeared. The intensive pressures of the Leap Forward
Program had resulted in industrial and supply dislocations and
transportation bottlenecks and caused the Chinese Communists to
default on export contracts. Even so, since the Chinese will
continue to need foreign exchange, we can expect them to undertake
other drives similar to that of 1958.
The manner in which the Soviet Bloc, and to a lesser extent
Communist China, conduct this economic penetration tends to
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weaken Western influence but also supports the Bloc iinace _ of
progress and power.
Will these activities of Communist China and the other
countries of the Sino-Soviet Bloc continue to create situations and
trends inimicable to Free World interests? Will the "demonstration"
provided by the Communist Chinese rise in power and productive
capacity delude the uncommitted nations of Asia into following a
similar path? The answers to these questions lie in the future.
Now, the very dimensions of the emergent Communist power loom
threateningly over Southeast Asia. It is alienating and frightening
China's neighbors, particularly now in the light of Tibet and the
Indian boundary situation.
Up to this point, I have identified the threat of Communist
China as the challenge we face in Asia. The uncommitted countries
of Asia are themselves presenting the Western nations with a
distinctly different and extremely important element of the
challenge -- a test of our ability to assist these countries toward
a constructive life of well being and freedom.
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There is much still for us to learn on how to help and work
with our Free Asian friends, and how better to understand their
problems -- problems which to them are overwhelming and for
which there are, more often than not, no easy or ready solutions.
If we exercise much wisdom and have an objective but
sympathetic appreciation of what the people of these countries are
up against, our help will be constructive. The psychiatrist, Dr.
Mottram Torre, made a useful point in this regard when he quoted
Asian officials as saying, "Send us men who can understand our
pace and adapt themselves to it." These are demanding qualities.
Our national security in Asia hinges, in large measure,
on the effectiveness with which the Western nations are meeting
this challenge, as reflected in the responses of these Free Asian
people. Here lives a large part of what has come to be known as
the Middle Billion -- the "billion human beings who," to quote
Secretary Herter, "are balanced so precariously between the free
world and the Communist empire. The decision of these people
as they compare Sino-Soviet promises and performances against
our own is a decision we must respect and try to influence for
the very simple reason that our future hangs on it.
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III. Contributions of Asian Studies
Your programs for Asian studies will have their effect in
influencing the direction of the responses of the peoples of Asia.
Although in CIA, as elsewhere in Government, we have our own
training programs and incentives for language study, we still need
additional young men and women proficient in one or more of the
many languages of Asia. We would hope that they would also be
armed with a basic understanding of the cultures, motivations, and
environments of the people of the area with which they are con-
cerned. The dearth of Americans who can handle some of the more
"exotic" languages has been brought forcibly to our attention more
than once. The National Defense Foreign Language Fellowships
and NDEA assistance to centers should in time expand this group
very substantially.
Encouraging to us in Washington is the vitality of the Associa-
tion of Asian Studies and the trend in organizing regional Asian
studies conferences and special committees -- for example, the
creation last week of the Joint Committee on the Contemporary
China by the Social Science Research Council and the American
Council of Learned Societies.
Of very great importance to our nation is the current trend,
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exemplified by this Conference and supported by the foundations,
toward strengthening Asian studies at the undergraduate level. It
is here that interest in Asia, its societies, and its problems is
instilled in an ever expanding student body. These young
Americans fan out in all directions to influence the public mind
toward a better appreciation of our national security interests in
that part of the world.
A start has been made toward the development of language and
area programs specifically designed to help American management
and financial experts, engineers, and others destined to assist the
people of the less developed areas. They can make impressive
contributions merely by using their specialized knowledge, but
would perform even more effectively for the local governments if
they could be assured of some training of this type. Furthermore,
in grooming young Americans for assignments abroad, let us be
sure that they attain some of the highly desirable aspects of what
is now known as overseasmanship.
An impressive number of students from Asia are in the United
States -- well over 16, 000 from South, Southeast, and East Asia;
6, 000 from the Near East. Of inestimable value is the practice of
having Asian students and scholars attend our universities as well
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as having Americans study, conduct research, and teach at insti-
tutions abroad. While the great majority have found their stay in
America rewarding, some have returned to their homes with
experiences which, to some extent, have alienated them from
America. Those now here should return with a better appreciation
of our values and our way of life.
The Communists also recognize the benefits of such programs,
As far as we can determine, from mid-1956 to mid4959 at least
600 students from the Near East and 160 students from South and
Southeast Asia, excluding Overseas Chinese returning to the Main-
land, studied in countries of the Sino-Soviet Bloc. Probably more
than 750 technicians among the nationals of these less developed
countries have received training in the Bloc during the same
period. Three-quarters of them came from South and Southeast
Asia.
We are very conscious of the favorable position of the
academic community for undertaking research abroad in coopera-
tion with the indigenous governmental and private institutions and
with knowledgeable individuals of the areas under study. Scholars
from your institutions are being called upon with increasing
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frequency to advise and consult with those in Government who are
directly concerned with these parts of the world. You are all
acquainted with the listing of research studies in progress, pre-
pared by the External R,esearch Division of the Department of State.
Nearly 1, 000 entries in the most recent issuances pertained to South,
Southeast, and East Asia, but you may not know that this Division last
year received requests from within the Government for more than
100 unpublished studies on these areas, apart from the many that
had been published. Your research is in demand. Of particular
interest are the foundation sponsored group research projects,
many of which bear very directly on difficult questions of the
moment.
There is an increasing awareness in the United States of the
complexity and subtleties of the situations encountered in Asia,
and your studies help to provide the necessary background and
perspective.
There are, of course, almost unlimited opportunities for
additional research oriented toward problems we face in Asia.
Here are a few suggestions put down at random.
Quite obviously Communist China stands as a major target
for searching study.
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With respect to the Free Asian countries, more attention could
well be given to the study of the true nature of "nationalism" as a
force motivating the leaders and as a symbol for the people.
What about the traits that are essential for leadership in rapidly
developing societies? How can effective local leadership and local
managerial skills be obtained at various levels within these countries?
How can an enlightened leader assure integrity at various levels
of government to offset the danger of an undermining corruption that
might arise from ignorance or ineptness in the use of sound concepts
of basic administration?
Useful beginnings have been made in studying the changing basic
values, attitudes, and institutions of the societies found in the
countries of Asia.
More attention could be devoted to an analysis of the practical
problems confronting the transitional societies of this area in their
quest for modernization and economic stability.
The variety of possibilities for research stems from the
breadth of our security interests and from the diversity of cultures
and stages of development found within these lands of Asia.
This and similar conferences augur well for the expansion in
public cognizance of issues arising from the involvement of the
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United States in Asia. The academic community, the foundations
-- and now the Government -- must work perseveringly to increase
materially our Asian language resources.
And our Government agencies, looking increasingly to the
scholars for greater insight on questions of national policy and
security, need the counsel of men deeply involved in the study of
current changes in Asia. For it is only by an understanding and a
sensitive appreciation of the nature of these people, of the problems
they are encountering, and of the pressures they experience that
we can expect full success in meeting the challenge now present
in Asia.
END ?
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