LETTER TO THE HONORABLE U. ALEXIS JOHNSON FROM RICHARD HELMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R001600130009-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 19, 2016
• Document Release Date: December 3, 2003
• Sequence Number: 9
• Publication Date: August 18, 1966
• Content Type: LETTER

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cgist;y
The Honorable U. Alexis Johnseon /l''
18 RUG 1966
Deputy Under Secretary for Political Affairs
Department of State
Washington, D.C.
Dear Alex:
I fully agree with the importance of the a co-
1c intelligence topics mentioned in your letter
of 12 August. We have been ending our research
on the economy of Communist China and the construe-
tit of national accounts is an integral part of this
effort. We find, however, that there are serious
data problems connected with this research. At pres-
ent the limited data published by the Chinese Communists
permit the calculation only of a few general indexes,
such as industry, agriculture and GNP. Until the
Chinese decide to Publish a such greater volume of
reliable statistics, we will not be able to construct
a more detailed set of national accounts of accept-
able reliability.
We have done some preliminary work on scientific
and technical manpower requirements. Data presently
available do not, we believe, permit the construction
of useful estimates of manpower requirements in the
detail suggested by the directors of the State-Defense
study; it is unlikely, moreover, that the statistics
required for such detail will be available in the
foreseeable future. Meanwhile,, we are compiling all
available information on this subject in an effort to
develop some meaningful conclusions. Our findings
will continue to be included in research reports and
national estimates covering the Chinese economy.
State Department, JCS review
completed
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an awry to give you such a negative reply
togas. I will be glad to discuss these
ems with you in more detail at any time.
8ia+srely,
7s7 Richard Helms
Richard Helms
Director
R. J. SMIN
Deputy Director for Intelligence
ORR:Morell
Rewritten:IiDI:RJSmith:yd (18 Aug 66)
Distribution:
Orig & 1 - Addressee
1 - DCI
1 - ER
1 - DDI
2 - 0/D/ORR
1 - ORR/Ch/E
1 - ORR/D/A
1 - ORR/A/F
1 - OCI/C/China
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~ ~tm - %5'G 5 I
DEPARTMENT OF STATE
WASHINGTON
August 12, 1966
Dear Dick:
The Senior Policy Group, which has over-all
responsibility for the State-Defense China study,
has approved the enclosed recommendations from the
study directors for further action on the study. I
have written Bill Bundy concerning the first of
these recommendations. This letter constitutes formal
action on the second recommendation. You will under-
stand, I am sure, that neither the Senior Policy Group
nor the study directors intend to dictate the pri-
orities which you must set for work on China. The
intention is merely to focus attention on one possible
approach. to the important area of work on the Chinese
economy.
U. Al
Deputz Ui dr- Secretary for
Pol ti Affailrs
Enclosure:
Proposed Action on
Long Range China Study
The Honorable
Richard Helms,
Director of Central Intelligence,
Washington, D. C. 20505
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NOW
THE JOINT CHIEFS OF STAFF
MEMORANDUM FOR THE DEPUTY SECRETARY OF DEFENSE
THE CHAIRMAN, JOINT CHIEFS OF STAFF
THE DEPUTY UNDER SECRETARY OF STATE
,,r..
FOR POLITICAL AFFAIRS
26 July 1966
SPECIAL STATE-DEFENSE STUDY GROUP
Subject: Proposed Actions on Long Range China Study
The final version of the Long Range Study of Communist
China was distributed to interested government offices at
the end of June. We believe that the following actions by
the Senior Policy Group with reference to this study would
now be desirable.
1. Refer the Long Range Communist China Study to the
Chairman of the Interdepartmental. Group/Far East with the
suggestion that the IRG/FE establish an interagency China
Country Committee under the chairmanship of the State
Department's Director of the Office of Asian Communist
Affairs. This Country Committee could, among other functions:
a. Coordinate the review of the study by the agencies
represented on the IRG/FETfor policy suggestions, action
possibilities, intelligence targets, and contingericy planning '~t'3'
guides. It is suggested that the results of this review be
reported to the IRG/FE by 1 October 1966. A further report
on actions taken pursuant to the review might be requested
of the Country Committee by 1 March 1.967.
b. Prepare a brief situation report on the con-
siderable number of classified government and government- i)r
sponsored re .rch and planning papers relating to China
which are presently underway or have recently been com-
plated. (A partial list is attached.) After reviewing this
situation report, the IFG/FE may wish to recommend any
steps which might be needed to improve interagency co-
ordination.
SDG-66-,1087
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c. Recommend to the Chairman of the IRG/FE by
March 1, 1.967 what, if any, additional study on China
might be undertaken by an interagency group as a sequel
to the present long-range China study.
d. Prepare an adapted version of Chapter 11 of
the present study (Possible Developments in Communist China) G p
which might usefully be made available to selected allied
governments.
2. Propose to the Director of Central Intelligence that
CIA, in cooperation with other intelligence agencies, commit
the resources necessary to prepare a thorough construction
of Chinese national accounts and manpower requirements models-
in extension of Section D, Annex I, of the long-range China
study. As such models are refined and corrected in the light
of accumulating data, they should be of steadily increasing
value both in their own right and as checks on conclusions
reached by other means of economic analysis.
JOSEPH A. YAGER #EPHEN W. ZEIO
Department of State Brigadier Ge ral, USAF
Attachment:
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PARTIAL LIST OF CURRENT (OR RECENT) STUDIES
RELATING TO CHINA
1. Air Force Study (Selective Response to Chinese Communist
Intervention)
Stuudy _-_ l97?)
3. Army DCS/O' s Study (Pacif.ication and Lone; Term Development
of Viei_nam)
4. Report by the seventh. Psychological Operations Group,
Department of Army (Psychological Operations Estimate.,
Communist China)
5. Institute for Defense Analyses series (Project Mandarin)
6. A series of Stanford Research Institute studies (at least
ten classified and unclassified studies, plus several
published books by staff members)
7. Several studies by the Special Operations Research
Organization.
8. A study under the Center for Naval Analyses (U.S. Naval
Options in Asia)
9. A study by the Chairman of the Joint Chiefs of Staff's
Special Study Group (Alternative U.S. Strategies for
Communist China)
10. Joint Analysis Group (CIA/DIA) study (Alternative Projections
-
of Chinese Communist Military Forces TFirau ig(5)
11. A series of research analyses by members oi',the DDI/RS group
of CIA (the POLO papers)
12. A J-5 paper (Recommendations for a U.S. Policy on Military
Containment of-an c 1?ena1. -Chinese Communist Aggi?essi_on_T
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2. Army study (Army General Purpose Force_Rtiequirements
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Nmoe 'VW
18 August 1966
SUBJECT: Background FYI
1. The recommendation by the Study Group is one
the Staff had already made to ORR's economic special-
ists on China. We made it clear to the Staff some
time ago that the data do not now justify so elaborate
an approach as is attempted in the State-Defense China
study.
2. ORR pioneered in the construction of national
accounts for Communist China. A detailed set of GNP
estimates for 1952-1957 was constructed using the
relatively voluminous data published by the Chinese
for that period. We continued these estimates for
1958-1960, but by 1960 the published data had dwindled
nearly to zero. In addition, we have learned to be a
little more skeptical of data published by the Chinese.
Since 1960 we have not attempted to construct elaborate
national accounts for China not because of lack of re-
sources, disinterest, or ignorance of methodology,
but simply because of the lack of detailed facts about
China. Both GNP projections and manpower requirements
are simple to calculate given a"factual base to depart
from. We are continuing to work in these areas as
best we can, but nothing so ambitious as the State-
Defense study approach will be justified until a great
deal more data becomes available. The recommendation
by the Study Group looks like an attempt to override
our judgment, already expressed to the Study Group
Staff, that the State-Defense approach is largely
spurious.
T 1TF
R. J. SMITH
Deputy Director for Intelligence
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