NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A031400070001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 15, 2016
• Document Release Date: April 30, 2004
• Sequence Number: 1
• Publication Date: May 8, 1979
• Content Type: REPORT

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Intelligence
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National Intelligence Daily
Tuesday
8 May 1979
State Dept. review completed
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Special Analyses
China-USSR: Call for Talks. . . . . . . . . . 5
Overnight Reports . . . . . . . . . . . . . . . . . 13
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The Overnight Reports, printed on yellow paper as the
final section of the Daily, will often contain materials
that update the Situation Reports and Briefs and Comments.
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SPECIAL ANALYSES
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CHINA-USSR: Call for Talks
fundamental principles and foreign policy issues.
is no sign that the Chinese are prepared to address these
basic differences or to change the thrust of their devel-
oyin_a relationship with the US.
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China may be making a tactical adjustment in its
policy toward the USSR aimed at reducing tensions with
Moscow. Chinese Leaders might reason that such a move
would diminish the possibility of armed conflict with
the USSR while China is focusing on economic moderniza-
tion and, at the same time, alter slightly China's posi-
tion in the Beijing-Moscow-Washington triangle. Nonethe-
less, China and the USSR remain sharply divided over 25X1
There
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The Chinese interest in talks probably stems from
a desire to soften the impact of their announced deci-
sion to terminate the Sino-Soviet treaty next April--yet
another hostile act, in Soviet eyes. China also may
have been concerned about Soviet military exercises in
the Far East and the Soviets' abrupt suspension of Sino- 25X1
Soviet trade talks following China's invasion of Vietnam.
The Chinese probably discussed these concerns at high-
level meetings in Beijing in March when they w e decid-
ing how they would deal with the treaty issue.
At the same time, frictions with the US over the
Taiwan omnibus legislation could be generating pressures
within the Chinese leadership against any tendency to
rely too heavily on the US as a counterweight to the
USSR. Beijing might now wish to adjust--slightly--its
position in the China-USSR-US triangle. In explaining
China's attitude toward US arms limitation talks with
the USSR, Vice Premier Li Ziannian recently told visit-
ing US Congressmen that "we can conduct negotiations
with the USSR to see if we can have normal relations."
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An article in the Chinese press last month may shed
some additional light on China's intentions. The article
eulogized a Chinese official who had proposed in 1962
that China simultaneously improve relations with the
West and the USSR in order to devote its resources to
domestic modernization. Other evidence indicates that
the official's proposal was intended as a tactical ad-
justment in policy and explicitly did not envisage reso-
lution of the fundamental problems dividing the USSR and
China. F77 I
Prospects
The USSR has thus far reacted warily to the Chinese
offer of new talks that accompanied China's public denun-
ciation of the Sino-Soviet friendship treaty on 3 April.
The Soviets, however, have long felt that their bargain-
ing position with the US would be greatly enhanced by an
improvement in relations with China. Such a development
would appear especially attractive while the US and USSR
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are holding final SALT negotiations and preparing for a
summit. If the Soviets now conclude that the Chinese
genuinely desire to reduce tension and even restore an
appearance of stability to the relationship, they will
quickly start unconditional talks. A Soviet decision to
push forward with Sino-Soviet trade talks, now suspended,
could be one signal of Moscow's willingness to preserve
a working link with China. At the same time, the Soviets
are ikel to seek comparable evidence of Chinese sincer-
ity.
There are sharp limits, however, to how far China
can go in attempting to satisfy Soviet expectations. Any
appearance of a significant warming in Sino-Soviet rela-
tions would undercut the basic thrust of China's anti-
Soviet policy, to which the Chinese apparently remain
committed. In short, the Chinese still face the same
constraints that were operating after Mao Zedong's death
and the purge of the radical Gang of Four in 1976 when
they attempted to reduce tensions between the two sides.
In 1977, the Chinese lowered somewhat the level of their
anti-Soviet rhetoric and reached agreement with the USSR
on technical border river navigation matters. These ten-
tative steps did not go further, however, and the Chinese
reiterated a firm anti-Soviet stance at the Fifth National
People's Congress in early 1978. Another session of the
People's Congress is likely soon, and it probably will
provide an opportun' better to assess China's strategic
and tactical moves. t 25X1
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(The items in the Overnight Reports section have not
been coordinated within the intelligence community.
They are prepared overnight by the Office of Current
Operations with analyst comment where possible from the
production offices of NFAC.)
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USSR-China
The US Embassy in Moscow reported yesterday that the
first secretary of China's Embassy had confided that So-
viet officials are prepared to start negotiation of a
Sino-Soviet trade accord for 1979 this coming Friday.
The Soviets had postponed such talks in late March to ex-
press their displeasure regarding the Chinese attack on
Vietnam. The Chinese diplomat also asserted that Beijing
will give a "positive" response to the Soviets'.note of
17 April on prospects for talks on bilateral political
relations he suggested 25X1
that such a s should tirst ocus on ac ievement of an
agreed "political document" to provide a new "juridical
basis" for Sino-Soviet relations in the wake of China's
abrogation of the friendship treaty of 1950. A Soviet
expert on China told the US Embassy last Friday that he
saw little likelihood of genuine progress in improving
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The "Voice of the Islamic Republic" has announced
the execution today by firing squad of 21 officials who
had served the Shah. Among those said to have been
killed were two former ministers in the government and
an ex-head of the Ma'lis the lower house of Iran's
parliament.
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Panama-US
The US Embassy in Panama learned yesterday afternoon
that Romulo Escobar Bethancourt, the political adviser
to General Torrijos, is scheduled to appear on television
tonight to explain to the Panamanian people the govern-
ment's position on the Canal treaty implementation bills
now pending in the US Congress. The Embassy has doubts
about the accuracy of what its source has said on the
issues Escobar Bethancourt allegedly will address but
does conclude that the speech will be "an important
event in Panama." Panama's President Royo comes to
Washington tomorrow for talks with President Carter.
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Poland-USSR
The US Embassy in Warsaw yesterday reported that a
long article in a Polish economic weekly provides "one
of the most informative discussions on Polish-Soviet eco-
nomic relations we have seen in several years." The
author, who heads the department in the Ministry of For-
eign Trade responsible for trade with fellow CEMA members,
contended that Poland intends to replace East Germany as
the USSR's leading trade partner and noted that the turn-
over with the Soviets will soon account for one-third of
Polish foreign trade. The official expressed the belief
that bilateral trade will increase at an average annual
rate of 10 percent during the next five-year plan (1981-
85) and that Poland will be moving into a new, "integra-
tion" stage in its economic relations with the USSR.
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Ecuador
According to the US Embassy, 38-year-old President-
elect Jaime Roldos, in a long conversation with the Em-
bassy's political counselor, said the wide margin of his
victory would give him more leverage in pushing socio-
economic measures and in going ahead with a moderately
reformist government that will seek to strengthen democ-
racy in Ecuador. He also frankly acknowledged his cur-
rent problems with his political mentor Assad Bucaram,
who had been disqualified as a presidential candidate by
the military government. The Embassy commented that
Roldos appears to be effectively working on his problems;
a new local word, Roldoseando, connotes that he has not
only the ability, but the luck, to surmount his obstacles
and to continue in power for the full five-year term in
the new constitution.
Cuba - West Germany
The West German Foreign office has confirmed its
agreement in principle to a visit by Cuban Foreign Min-
ister Malmierca on 1 June, according to the US Embassy.
Final scheduling details are being worked out. The Em-
bassy notes that Foreign Minister Genscher has been neg-
ative toward the proposed visit but apparently is willing
to meet with Malmierca.
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Mauritania
Assessing the country's "new" regime a month after
Lieutenant Colonel Bouceif became Prime Minister, the
US Embassy in Nouakchott yesterday reported that there
is as yet no concrete evidence Mauritania's Sahara di-
lemma has eased and that the Polisario's potential to
influence events continues to grow. The country's fi-
nancial posture was described as "more catastrophic than
usual," and recent clashes between black and Moorish
students have shown that racial animosities remain high.
The Embassy nonetheless noted that Bouceif has scored
some points on the domestic front through his concilia-
tory remarks regarding former President Ould Daddah--
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in a coup last July--and the flurry of Sahara-
related diplomatic activit . There have been few reports
of opposition to Bouceif.
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