CHINESE AFFAIRS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002400070001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 27
• Document Creation Date: December 20, 2016
• Document Release Date: February 8, 2006
• Sequence Number: 1
• Publication Date: December 22, 1975
• Content Type: NOTES

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ecret
Chinese Affairs
Top Secret
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December 22, 1975
State Department review completed
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CONTENTS
December 22, 1975
The Ford Trip. 1
Another Death in the Party's Family. 4
Expanding Civil Aviation . 10
China and India: Dialo ue of
25X1 the Deaf
I12
Recent PRC Claims for
China's Foreign Trade. . 15
Grain Output 18
Economic Notes:
Shanghai Transport Booms . 20
CHRONOLOGY . . 21
.ANNEX: Education: Back on the Front Burner 23
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The Ford Trio
Chinese diplomats abroad and other officials
with access to thinking in Peking have depicted
President Ford's trip to China in positive, almost
glowing terms.
Clearly under instructions from Peking, these
well-informed officials have told US di lomats
--Peking is satisfied with Sino-US
relations and that the Shanghai com-
munique remains the framework for
more substantial improvement in
relations in the future;
--Peking and Washington hold common
views regarding many international
issues, particularly with respect to
"hegemony," and this could result
in a common approach to other
problems;
--the visit strengthened Washington's
hand in future dealings with Moscow.
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Peking seems anxious to dispel speculation that
the absence of a communique meant the trip produced
no important results or that the two sides failed to
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agree on any significant matters.
Peking has taken the line that the talks on
international issues
constituted the
mos uagor an par o e or visit. "Hegemony"
to the Chinese obviously means opposition to an ex-
pansion of Soviet influence, and Mice Premier Teng
H-ciao-ping indicated at a farewell lunch for Ambassador
Bush in Peking on December 6 that the visit produced
results "greater than we expected..
President Ford's speech in Honolulu following
his Ch`na visit has also been well received in Pe-
kin .
December 22, 1975
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Lengthy excerpts from the
speec were carr~,e ~.n t e PRC-press in Hong Kong,
and_one of the newspapers commented that whereas the
Nixon Doctrine meant a limited US withdrawal from
-Asia, the Ford Doctrine means holding the line. This,
the paper claimed, is a spearhead directed against
Moscow.
Peking's apparent view that the visit produced
a clearer definition of mutual Sino-US interests
whose object is the containment of Soviet influence
is reflected in Chinese treatment of the detente
issue. Whereas major Chinese public statements dur-
ing the visit by Secretary Kissinger in November con-
tained pointedly anti-detente formulations, similar
statements during President Ford's visit were more
specifically anti-Soviet, virtually brushing aside
the detente question.
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Another Death in the Part ?s Famil
The death of party vice-chairman Kang Sheng on
December 16 should have little effect on Chinese
policy-making. Kang had been inactive for several
years, although he appeared at the party congress
in 1973, at National Day ceremonies in 1974, and at
the National People's Congress this year. Rang was
rumored to be ill at least since 1971, and he was
in a wheelchair for the National Day celebrations
in 1974. He was aligned with the party's left wing
and reputedly recruited Chiang Ching into the party
in the 1934s. Although his supposed illness may not
have prevented him entirely from advocating leftist
causes in higher party councils, the actual extent
of his influence in recent years is impossible to
determine.
The memorial service held for Kang on December
21 brought out all active Peking-based Politburo
members. The namelist, given in order of party
rank, revealed no changes. Chiang Ching, far
example, desgite the many setbacks she has suffered
this year, remains the highest ranking member of
the Politburo, following the elite Standing Committee.
Another highlight of the service was the reagpearance
of young party vice-chairman Wang Hung-wen, who pre-
sided over the ceremony. Wang's appearance was his
first in Peking since last May and was virtually
mandatory under the circumstances. He reputedly had
returned to Shanghai earlier this year for further
"seasoning" as a result of his less than glowing
performance as a member of the hierarchy in Peking.
Party vice-chairman Yeh Chien-ying, who himself
has been ailing, delivered a rather warm eulogy,
claiming that Kang was "beloved by the people of the
whole country." Kang, whose career was spent mainly
in security and internal intelligence work, was in
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fact probably more feared than loved, and his
role in support of party leftists during the Cultural
Revolution undoubtedly did not endear him to the
moderates.
Mao, the ailing Chou En-lai, and 90-year-old
Chu Te, who has made several public appearances
despite his age, did not attend the ceremony but
did send wreaths. The same was true of aging
Politburo member Liu Po-cheng.
There are signs that the party's most prominent
intellectual, the octogenarian Kuo Mo-jo, is ill.
Kuo has not appeared publicly since October. He
sent a wreath to the Kang Sheng ceremony and has
missed several events hosted by the Chinese Academy
of Sciences, of which he is president. On some
occasions, these events have been held in Kuo's
name, a formulation used for Premier Chou En-lai.
Whether or not Kong's death means that the
left has lost yet another voice, it does point up'
the age of the current leadership. At 77, Kang
was the same age as Chou En-lai and Yeh Chien-ying,
both of whom are ailing to some degree, and was
younger than Mao, Chu Te, and Liu Po-cheng. Earlier
this year, Politburo member and co-founder of the
party Tung Pi-wu died at the age of 90. Despite
remarkable longevity, the old ward is slowly
passing from the scene.
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Ex andin Civil Aviation
Peking has added 21 new routes and 58 new flights
per week to domestic air operations since April, bring-
ing total routes to 115 and total flights to 344. Air-
ports and aircraft inventories are also being expanded.
International air operations are plagued by law
traffic demand and continuing losses on existing routes,
although China continues to seek new international air
agreements. China now offers flights to only 10 for-
eign countries and is served by 10 foreign airlines.
Peking has reciprocal air agreements with more than 30
countries, however. The most recent agreements were
signed this fall with Finland and West Germany. The
surge of new foreign flights to China that occurred in
the last few years has stopped, probably reflecting
high fuel prices, Peking's stringent visa policy, and
the general economic slump.
Chinese aircraft inventories continue to grow
despite serious under-utilization of the recently
added 10 Boeing 707s and 8 British Tridents. Origi-
nally bought to augment the 5 Soviet ZL-62s on inter-
national routes, several of these medium and long
range aircraft are being flown on domestic fli hts
alon with 31 Soviet AN-24s and 45 IL-14s.
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China and India: Dialogue of the Deaf
In the last few months, India has taken the in-
itiative in the long inconclusive dialogue with Pe-
king designed to lead to the normalization of rela-
tions. This is a turnabout from the exchanges of
last year and early this year, when the Chinese took
the lead. The results, however, have been no dif-
ferent--there has been no real progress. Indeed,
Peking appears distinctly uninterested in resuming
discussions for the time being, although the Chinese
have been careful not to close the door on negotia-
tions at same future time.
According to the Indian Foreign Secretary, the
Indian feelers were initiated in August. The foreign
secretary said that he called in the Chinese charge
in New Delhi and favorably reviewed past Chinese
statements relating to normalization. The Indian
observed that the two countries should try and build
on this and asked the charge how this might be ac-
complished. The foreign secretary said that he got
no substantive reply.
Although this is our first knowledge of the al-
leged Indian demarche, it is consistent with a pattern
of Indian. intentions toward China since September,
when a movement to prepare Indian public opinion fog
some type of movement in Sino-Indian relations may
have begun.
December 22, 1975
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an i went p is in October in an inter-
view wi he central news service, saying India's
policy toward China was to improve relations even
though there were differences between the two coun-
tries, but the Chinese had not responded to Indian
efforts. Gandhi made those remarks shortly after a
border clash in which four Indian soldiers were
killed. Both sides played down the incident, and it
does not seem to have altered the state of relations.
The Indian position has not been as unambiguous
as their diplomats would make it seem. Gandhi, for
example, coupled her overtures to Peking with some
stiff language. In an interview with the London Sun-
da~ Telegraph that was broadcast by New Delhi domes-
tic radio on October 12, she accused Peking of in-
stigating Indians along the border to make trouble,
supplying them with arms and books, and trainin
guerrillas.
Individually, New Delhi's feelers may have seemed
lukewarm to Peking. But taken in toto, the signals
were clear enough, and it was Peking that was uninter-
ested in picking up the thread. The Chinese may have
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calculated that Gandhi is not serious, given Delhi's
continued ties with Moscow and what the Chinese saw
as deliberate stalling in the face of unmistakable
Chinese overtures in early 1975. Peking might also
believe that a Chinese-Indian dialogue would have a
negative impact on the hard pressed regime in Bangla-
desh. If this is Peking's concern, it presumably
will defer a response to New Delhi until Dacca in-
creases its internal control and the danger of In-
dian intervention further recedes.
There is another possible factor in China's cur-
rent disinterest--the contempt that China's current
de facto premier holds for India. In an early Decem-
ber conversation with the departing USLO chief, rank-
ing vice-premier Teng Hsiao-ping dismissed India as
a country where "cows are more important than state
sovereignty." while it is in Peking's long term in-
terest to normalize relations with New Delhi, Teng
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Recent PRC Claims for Cha.na's
Foreian Trade
Estimates of the value of Chinese trade based
on recently available official statistics compare
favorably with CIA estimates based on trading part-
ner data.
Although Peking has not published data on the
value of China's foreign trade since 1959, for the
past three years it has released fragmentarg sta=
tistics on the percentage increases in China's for-
eign trade.
Dollar values estimated from the sporadic Chi-
nese statements and from trading partner statistics
are as follows;
Chinese Fr
Statements* Partn
om
er
Trade
Data*
1952
1, 890 ~ 1
,~8~3
0
1965
4,130 3,
88
0
1972
6,130 5,
92
0
1973
10,700 10,
09
0
1974
14,175 14,
00
5
~'Mi Z Zion US Do Z Zars
The CIA estimates based on trading partner statistics
are lower than those derived from official Chinese
statements, but differ at most by 6 percent.
The differences may be due to dissimilarities
in the CIA and Chinese accounting procedures as well
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as to difficulties in making estimates from trading
partner data. Actual Chinese procedures for record-
ing trade may differ from ours, for example, with
respect to the accounting currency and the treatment
of aid goods and freight and insurance charges,
Some of the discrepancies in the valuation of
trade undoubtedly stem from differing exchange rates
used to convert trade into a common currency. In
1959 China reported total trade in 1952 as 6,460 mil-
lion yuan, of which trade with Communist countries
accounted for 5,252 million yuan,. If the Chinese
indexes are based on yuan values, the Chinese must
have since scaled down the yuan value assigned to
trade with the Communist countries for 1952. Other-
wise the recent Chinese statement in Chung Kuo Tui
Wa% Mao I, that trade in 1974 was 7.5 times the level
of trade in 19.52, would mean 1974 trade amounted to
48,450 million yuan (apgroximately US $24 billion
at current exchange rates}, a total. which is patently
absurd. On the other hand, if China computes the in-
dex in US dollars, small differences in the exchange
rates used to convert Chinese trade to US dollars
could account for a large gart of the differences
between the dollar estimates. For example, if the
actual dollar value of trade in 1952 were $1,857 mil-
lion, the estimate derived from the official state-
ment for 1974 would be $14,005 million, the same as
the estimate based on trading partner statistics.
Floating exchange rates have complicated the making
of US dollar estimates from trade partner statistics
since 1971.
Some of the discrepancies result from errors in
estimating Chinese trade with trade partners that do
not publish complete statistics. The CIA estimates
of China's trade with Albania, the Asian Communist
countries, and many developing countries are based
on fragmentary information from trade agreements and
other indicators. Pitfalls abound in placing dollar
values on these items.
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Several other factors may also help explain
the differences between the CIA estimates and the
figures derived from the Chinese claims.
--Adjusting trade partner data to a Chinese
exports f.o.b. and imports c.i.f. basis
involves the use of flat percentage rates
based on distance, which may not reflect
actual shipping and insurance costs.
--Shipping leads and lags are ignored in the
use of trading partner data.
--Goods re-exported into China and to third
countries through Hong Kong may not be
fully reported in the statistics of the
supplier and recipient countries
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Grain Output
The Chinese have released a new figure for grain
output in 1974 that is far larger than output claimed
for any previous year--because soybean production
has been included.
For each year from 1970 through 1973, the Chi-
nese announced an absolute figure for the output of
grain, which included rice, wheat, coarse grains,
and potatoes. In 1974 the Chinese reported only that
output for that. year was 2.4 times that of 1949..
Tha derived output figure based on this increase would
be 250 million tons. CIA, however, believes that
this total is a bit high. Weather in 1974 was generally
unfavorable, and output was probably closer to 255
million tons.
The new total for 1974 (announced at a UN FAO
conference in Rome in mid-November by the vice-minister
of agriculture and forestry, Yang Li-kung} is 274.9
million tons. Minister Yang also repeated the claim
that 1974 output was 2.4 times that of 1949, and the
coupling of this increase with an absolute figure
makes it clear that the 1974 official output figure
(2.428 times the 1949 grain and soybean output} in-
cludes soybeans--and is consistent with our esti-
mates.
Official Chinese Grain Claims
tMiZZi-ort Metric Tona)
CIA
Estimates
YEAR 1949 1957
1973
1974
1974
TOTAL 113.2 195.0
--
274.9
275.0
GRAIN 108.1 185,0
250.0
-- 255-250
SOYBEANS 5.1 10.0
--
--
15-20
December 22,
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Peking announced recently that the 1975 harvest was
"even higher than 1974, itself a high production year." 25X1
This statement downgrades previous claims that the
1974 harvest was a record one and suggests that an
increase in this year will be small.
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ECONOMIC NOTES
Shanghai Trans ort Booms
A major bridge across the Huang-pu River
connecting Shanghai with a major petrochemical com-
bine is nearly completed. The rail section of the
double-deck structure was completed in late August;
the road will be done soon.
This bridge and other transport developments
continue to spur industrial growth in Shanghai,
China's largest city. Public transport has been one
of the vital ingredients in Shanghai's industrial
growth rate, which has averaged over 9 percent between
1966 and 1974. Nearly 6 million people--half the
city's o ulation--use Shan hai's ublic transport
daily.
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December 3-10 Chinese People's Association for
Friendship with foreign countries
delegation visits Afghanistan.
December 4 People's Daily replays Red FZa article
attacking education policy. 25X1
December 5 Chinese trade and economic exhibit opens
signed in Peking.
Trade agreement with Finland for 1976
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December 8 Visiting Minister of Information from
Benin (formerly Dahomey) meets with
party central committee member Yao
Wen- uan; departs for home December
9.
December 8,9, Various Romanian Delegations visiting
& 13 China meet with Chen Hsi-lien,
Kuo-feng, and Chiao Kuan-hua.
December 8-17 Chinese trade delegation led by Wang
Yao-ting, Chief of the China Council
for the Promotion of International
Trade, visits Thailand; meets Frime
Minister Khukrit on December 9.
December 9 1976 Sino-Czech trade agreement signed
in Peking by Foreign Trade Minister_
Li Chiang and Czech Vice minister.
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December 11 Peking's first ambassador to the
Phillipines, Ka Hua arrives in
Manila.
Chinese industry and trade delegation
concludes two-week visit to Singapore.
December I1- Former Italian prime minister and
21 Christian Democrat. party leader
commander Tung Kuo-kuei identified as
commander of the Hunan Military
Fanfani visits China; meets with
Teng Hsiao-ping and Chino Kuan-hua.
Farmer Shantung Military District
Party vice-chairman Kang Sheng dies.
December 18 Delayed announcement of visit to Peking
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by delegation from the Marxist-Lenini t
Revolutionary Party of Salvador.
December 19 Chao Tzu-yang identified as first
secretary of Szechwan Province.
December 21 Memorial ceremony for Kang Sheng,
presided over by Wang Hung-wen,
his first a earance in Pekin
since May.
President Manuel Pinto Da Costa of the
Democratic Republic of Sao Tome and
Principe begins official state visit.
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The radical changes in education introduced five
years ago as a result of the Cultural Revolution are
again being defended, but chances are still good that
they will undergo some, if not considerable, modifica-
tion over the next year or so. Since the first of the
month, Red Flag, People's Da~Zy and the provincial
media have all carried adamant defenses of the Cul-
tural Revolution reforms while attacking advocates of
the more traditional approach to education. Red Flag's
verbal assault on "bad elements in education circles"
is almost certainly aimed at Minister of Education
Chou Jung-hsin, a leading advocate of a return to the
more conventional, pre-Cultural Revolution practices
in the schools.
The current 'debate, which seems to have been
going on below the surface for several months, may
have been forced into the open by several speeches
Chou made in September and October. In his October
speech, Chou criticized the reforms of the Cultural
Revolution and claimed that there had been an over-
emphasis on practical application at the expense of
theoretical training. He also deprecated a model cur-
riculum that the radical faction was then promoting.
Chows speech was circulated as a centrally-originated
document, indicating that his views commanded consid-
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Mao's position in the current infighting is crit-
ical and, on most major points, his sympathies appear
to be with the moderates.
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On the question
i lions, a airman a so appears to have sided
with Chou Sung-hsin. Last year Mao recommended that
high school graduates should go directly to the uni-
versities without first doing a stint on a farm or
in a factory.
It is probable that Mao has not given wholesale
endorsement to the moderate position however. Having
fathered many of the radical educational reforms him-
self, he may well have a problem in backing away too
fast and too unequivocally. The leftists seem to be
aware of the Chairmants vulnerahility and have made
liberal use of his quotations from an earlier period
when he was more radical on this issue.
In any case, Moots tilt toward the moderates has
undoubtedly left the radical faction, led by Chiang
Ch'ing, further isolated. This latest blow comes on
the heels of leftist setbacks in the cultural realm--
also at the hand of Mao--and a steady decline in re-
cent months of Chiang Ching's political stature. In
all probability, it was this erosion of radical clout
that emboldened moderate elements to step up their
criticism of the educational system, the last remain-
ing edifice to the Cultural Revolution. Likewise, the
leftists probably realized that if their educational
reforms were overturned, they would be left with little
defense for the high cost of the Cultural Revolution.
It may have been this sense of the high stakes that
led the radicals to seek support in the public do-
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Even before the initial salvo was fired on De-
cember 4 with the broadcast of the lead article in
Red Flag, the leftists had apparently appealed to
students at Tsinghua and Peking universities. These
two institutions have traditionally been centers of
palitical_activism as well as models that other
schools in the country watch closely for signs of
new educational trends. Peking University, moreover,
was specifically criticized in the speeches of Chou
Jung-hsin. There are signs that since September
there has been considerable activity--all of it
peaceful--at these campuses an behalf of the Cultural
Revolution reforms. It is not surprising that the
students, most of whom are from working class back-
grounds and are the direct beneficiaries of the re-
forms, would be quite sympathetic to the leftists,
who undoubtedly were well aware of this reservoir
of support. It is no accident that the December 4
Red Flag article was written by persons from Peking
and Tsinghua universities.
There are a number of other hints that the left-
ists feel themselves on the defensive in this politi-
cal contest. The detailed, point-by-point refutation
of the moderate position, characteristic of the De-
cember 4 Red Flag article and much of the subsequent
media play, reflects this defensiveness. In particu-
lar, the articles go to unusual lengths to refute the
notion that the current educational system is turning
out graduates who lack professionalism. They cite
numerous examples of student contributions to eco-
nomic progress, emphasizing scientific achievements.
A few articles plainly admit that there are "defects,"
but hasten to add that any new system requires time
to prove itself and that the educational reforms
brought about by the Cultural Revolution are no
exception.
Finally, the leftists have displayed a certain
amount of caution in trying to pin labels on their
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opposition. Unlike numerous political battles in
the past, the mudslinging seems muted. The opposi-
tion is portrayed as misguided, but the insinuation
that it is in some way anti-socialist is for the
most Bart avoided,
At the same time, in an attempt to sustain their
reforms] the leftists have not hesitated to play on
the insecurities of the large number of cadres in the
universities who were purged during the Cultural Rev-
olution and later returned to positions of influence.
An important Red FZag article broadcast on December
11 singles out these cadres and admonishes them to
pay attention to seeing things from a proletarian
outlook.
The parameters of this educational debate are
familiar, and the issues have been bandied about from
time to time within the leadership during the past
few years. The last major outbreak of polemics on
the education issue occurred in the spring of 1973,
when university entrance examinations were briefly
made a primary criterion for admission. A counter-
attack that summer forced the moderates to retreat
on this issue.
The outcome of the current round is likely to
be quite different. Unlike 1973, the moderates today
are far stronger, while the political stack of the
left has precipitously declined during the past year
and a half, There can be little doubt, judging from
the ambitious economic goals set by the coalition of
moderates around Vice-Premier Teng Eisiao-ping, that
economic growth is their chief and overriding concern.
An educational system that places a priority on
quality and relies more heavily on graven methods
probably has a great deal of appeal to these men--
and provides the additional political dividend of
further circumscribing the left. Finally, and per-
haps of decisive importance, unlike 1973 Chairman l~iao
has added his own political weight to the moderate
side. All. of these factors suggest that the left is
at best fighting a rear-guard action.
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Top Secret
Top Secret
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