CHINESE AFFAIRS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R000700020005-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: May 11, 2007
• Sequence Number: 5
• Publication Date: April 30, 1973
• Content Type: REPORT

 Approved For Release 2007/05/11 JCIA-RDP85T00875R000700020005-4
Chinese Affairs
State Department review
Top Secret
Top Secret
S 25X1
30 April 1973
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Chinese Affairs
This publication fiat boon prepared by the China branches of the Fair East
Division of the Office cf Current Intelligence, with occasional contributions
from other offices within the Directorate of Intelligence. Comments and
queries are weisome. They should be directed to the authors of the
individual articles.
CON FI NTS
30 April 1973
Back to the Farm . . . . . . .
.
. .
Broadening Contacts with US Oil Firms . . . .
. . . . . . .
.
. . 3
More Transfers in the Provinces . . . . . . . . . . . . . . .
.
. . 4
From Peking with Moderation . . . . . . . . . . . . . . .
.
. . S
A Temperate Stance at ICAFL' Too
. . . . . . . . . .
.
. . 6
. . . . . . . . . .
.
. . 7
Echeverria in Peking . . . . . . . . . . . . . . . . . . .
.
. . 8
China's Researchers Reorganized . . . . . . . . . . . . . .
.
. . 9
Leadership Notes . . . . . . . . . . . . . . . . . . . . .
.
. I I
ANNEX
--Economic Dimensions of Chinese Diplomacy . . . . .
.
. 12
CHRON
OLOGY . . . . . . . . . . . . . . . . . . . . .
.
. 14
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The campaign to send etlucateo youths to lie rural areas has been intensified
this year after a sharp cutback in 1972, A provincial official announced In March
that "one or two nfillion" yours ; rrti plc will be rusticated, compared with four
hundred thousand last year. 25X1
a central directive issued last December, which
reportedly suspended the recruitment of new factory workers. If this is correct,
young people already in the countryside who had hoped for reassignment to urban
factories and middle school graduates who now have no other employment pros-
pects would swell the number of young people assigned to rural areas.
Some letters claim that the freeze on factory hiring is for three years, i.e., the
remainder of the current five-year plan (1971.75). The current plan may have been
revised to put even greater emphasis on agriculture inn the wake of lust year's
disappointing harvest. In any case, the increased down-to-the-countryside program
probably stems in part from economic considerations and may be an attempt to
boost agricultural output by providing extra manpower for projects such as water
conservancy.
Rustication of educated youth has had deep political as well as economic roots.
It Is consistent with Mao's long-standing belief that life ,nd work among the peasants
creates a healthy political attitude. Since the Cultural Revolution, rustication has
been used as much to indoctrinate and disciplh' a youth as to provide assistance for
rural areas.
The controversy among the top leadership stirred up by the renewed program
seems to be linked to the still unresolved Lin Piao affair. In December, Lin was
attacked for the first time as an "ultra-rightist," on grounds that he allegedly
opposed ntsttration and other policies in vogue during and immediately after the
Cultural Revolution. Also in Decenmber, the media began to tout "new things"-
rustication and other Cultural Revolution programs-in a leftist-ins ired campaign to
preserve at least some aspects of the Cultural Revolution. 25X1
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30 April 1973
Clrirrese Affairs
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 ilroadenhi Contacts with US Oil 1 irms
Peking is developing a broad range of contacts Willi US oil firths and compatlicx
supplying services and equipment to the oil industry. The following received invita-
tions to the Canton trade fair that opened on I5 April:
.-at least four oil companies- ('ontincntal Oil,1:sso, Mobil, and Caltex,
-US Stcr,l, reportedly beca'-sc of Chinese interest in its oil-well supply
division, which markets complete oil rigs for on-shore -al off-shore use;
-Baker Oil Tools, t- firm that specialize% in tubular steel for drilling
equipment.
In addition:
-a delegation from a Canadian subsidiary of Ures-:?r Industries. a US firm
that produces petroleum exploration equipment, k now in China;
a major US firm en,,aged in engineering and design of refining processes
will send a delegation to China in May,
-representatives of Standard oil of Ohio (SO11lO) reportedly have al-
ready visited China in connection with the approved sale by a Japanese
company of a petrochemical plant using SOHIO processes;
--China reportedly has requested several US oil equipment firms to quote
prices on marine systems, drilling equipment, and a floating drilling
platform.
All of the known contacts appear directed toward ;.cquiring US equipment and
technology, with emphasis on off-shore exploration anal petrochemical refining
processes. The inclusion of four oil-producing companies also vi des an oppor-
tunity for the development of trade in oil or chemicals. 5X1
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30 April 1973
Chinese Affairs
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1 1
More l r:ii sfcrs In the Provinces
Since the Lin 1'iau.) affair in September 1971, a number of tnp?r:utking military
officials in the provinces have beets purged or have simply dropped from public view.
Now, steps are being taken to fill the void, 1'ckir,g apparently feels that in the
interest of over-all stability each province should have a clearly designated head,
even If that person Is only the "principal responsible person," The s-tuation in the
provinces contrasts with that in Peking, where the important party and army posts
held by Lin and several other central military leaders purged along with him remain
vacant.
The new lincitp in the fractious province of Kwcichow was revealed on 16
April. The "principal responsible person" there is U Jui?lin, an army veteran from
neighboring Yunnan. Lu is the third military chief' to be transferred to Kwcichow
since the start of the Cultural Revolution .,
In Ituna n the new man?on-the scene is party veteran Chang PIng?hua. ('11,111
Chang's dilemma and of similar problems in other seems unwilling or 25X1
unable to help out.
30 April 1973 Chinese Affairs Page 4
rcplaccn a military officer who tiro) >ed frost i)ublit: view last fall
Chang Ping-hua's career has come full
circle, a was first l.arty secretary o unau, when he was publicly humiliated In
1966 by militant Red Guards. lie returned ,o public life in 1971 in another
province. Since his reappearance in Ilunan in mid-April. Chang has been relatively
active, gtreeting foreign visitors and organising efforts to increase cotton production.
These latest lateral transfers follow a pattern that has been in evidence since the
start of the Cultural Revolution. After Icade,'s have been purged in one province.
Peking has usually moved in new leaders from outside (oo;asionally they were
brought up from within the local hierarchy). Before Lin's demise in 1971, these
lateral moves almost invariably involved military professionals. Of late, however,
some vctctan civilian officials, like Chan' Ping-hua, are being used as trouble
shooters, presumably assigned the ntissi, if restoring order and harmony and
ensuring compliance with orders from Jie center. Tit: use of these civilian officials is
in keeping with Peking's avowed intention of gradually restoring the balance
between civilian and military authority in China.
Many of China's provincial elite. whether military or civilian, are still being
asked to implement what often appear to be conflicting directives from Peking.
Moreover, they are sometimes pl. ced in tight spots. For example, Chang Ping?hua
will not only have to mend fences with local military leaders, who will regard his
appointment as an effort to dilute their authority, but also with leftist forces in the
province who were instrumental in ousting him and his supporters in the first place,
Chang's authority is circumscribed by the fact that Hunan's nominal first secretary.
Ilua Kuo-fcng, retains his Ilunan party and government titles even though lie ),Is
taken up new duties in Pching. The central leadership is undoubtedly aware of
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From Pekin whil n
Moderate reactions to ctmteniious Issues cmpiiayize Peking's strong interest in
normalizing relations with former adversaries and In tlel'using Indochina as a con trot-
ling Issue In Asian affairs,
China's interest in maintaining movement toward Sino?Indian rapprochement
was clearly deni-tinstratetl by Its mild reaction to India's intervention In Sikkim.
Chinese press reports have been sparse and without an authoritative stamp. The press
has criticized India's Intervention and New Delhi's "unequal" treaty with Sikkim;
there has been no reference to Chinese interests. despite Peking's sensitivity to
developments on its Illmalayan frontier.
In Soutbeast Asia, China has Ignored Thailand's involvement in Laos :is the
pace of Sino-Thai normalization has quickened. An authoritative commentary in
People's Daily said nothing of Thai involvement, leaving it to a China-based Thai
insurgent radio to support an earlier Lao Communist complaint about Bangkok's
role. Peking has been influenced by knoarfcdge that the Thai fbrcign office is
considering trade ties with China and adjustments in Bangkok's relations with
Taipei.
Nowhere has Peking's turn toward in dcration been more evident that in its
treatment of Indochina. Since President Nixon's China trip, Peking's statements have
been less biting in tone and more sparing of US actions and motives in Indochina
than commentary from the Indochinese Communists. Peking's latest statements
appear even more shaded on the side of moderation and flexibility than high-level
Chinese commentary a few weeks ago. APeople's Daily- editorial on 25 April used a
softer formulation than in the past in expressing Peking's terms for a Cambodian
settienient, Several times recently authoritative Chinese commentaries have
addressed the question of "foreign" involvement in Laos and Cambodia in a way
ii;s: lca?.?ts the 111 11) 'ter that Peking may have not only the US in mind but also
Ilanoi.
30 April 1971, Chinese Affairs
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 250
A Temperate Stance tit ECAFE Ton
a
China's appearance at the I.'CAI-'li meeting In Tokyo gave Peking an oppor-
tunity to advance the interests of the smaller Asian Communist regimes and to
expound on population policy, economic self-reliance, cooperatlon, and aid, The
Chinese generally stayed in the background, keeping an eye on their own policy
needs as well as on issues appealing to the Third World,
In his opening statement, China's chief delegate An Chili-yuan claimed that
Prince Sihanouk's exile regime, the Provisional Revolutionary Government of South
Vietnam, and North Korea ought to be in ECAFE. In the early days of the session,
the Chinese delegate emphasized the point by walking out during speeches by
Cambodian, South Korean, and South Vietnamese representatives, but later the
Chinese dropped the dramatics and remained at the meetings.
The Chinese statement on birth control, it sensitive subject in Peking, i'lustrated
the difficulty of reconciling the hard realities of population pressure with Marxist
theory that the masses are the motive force of history and economic development,
The Chinese, conceding that some problems may arise as the population increases,
described China's policy as "population increase in a planned way." They also
indicated that they were willing to learn from the experiences of other nations. (For
An's remarks on self-reliance and trade, sce the Annex, "Economic Dimensions of
Chinese Diplomacy."
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25 1
Gclcevernca In Pekin
Mexican PresiO:nt i?cheverria's five-day visit to China ended 24 April on a high
note. '1'hc Mexican leader received a promise that Peking would sign Protocol II of
the Treaty of" I'Iatelolco banning nuclear weapons from Latin America.'rhe Chinese
used the visit to polish their image as a champion of third World Interests.
'I'lic decision to sign the protocol was in line with Chinese assurances to Mexico
last Pali that Peking would not introduce nuclear weapons into Latin America, The
Chinese made it clear, however, that they were still opposed to passages in the
protocol that endorse the nwiear non-proliferation and partial test-ban treaties, By
agreeing to sign, the Chinese not only pleased Echeverria, but stole a propaganda
march on the USSR, now the only nuclear power that has not subscribed or
promised to subscribe to the agreement.
The two sides signed a $40 million trade agreement that will run for a year. The
Chinese endorsed President 13cheverria's concept or a charter of economic rights and
duties of' states and reiterated their support for a 200-mile limit for maritime
^:onomic rights. As dressing on the cake, the two countries agreed to undertake
cultural, scientific, and technical exchanges during 1973-74.
The Chinese followed their standard routine for high level guests in entertaining
Echeverria-a gala welcome, a meeting with Mao and talks with Chou, and a short
tour of other parts of the country. Public comments imply that both sides attach
considerable symbolic importance to this visit, the first to China by a Latin
American chief of state. The Chinese and their guest played heavily on Third World
themes--the encouragement of economic nationalism and opposition tosu,,erpower
hegemony and spheres of interest, but neither the US nor the USSR was specifically
attacked. The Chinese doubtless hope that Echeverria's visit will live new impetus to
their lagging campaign to expand relations with Latin America.
30 April 1973
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 4pprruPrl Frr RPIPacP 7nn7m.1:,I11 ? ('IA-RnPRr;TnnR7.c;Rnnn7nnn7nnn.~;-A
C'hina's Researchers Reorganized
('Itina's science and technology organizations underwent a major shakeup
during the Cultural Revolution at all levels and in bode the civil and military science
structure. Scientific organizations were reduced in size, merged, or abolished. The
objective, if there was one, was to put national research under provincial and
municipal administration so that the needs of local industry could be served more
effectively. The changes emphasized the importance of applied research and the
integration of resc.arclt with industrial production. The result was excessive decen-
tralization, dc-emphasis of basic research, and an erosion of professionalism in the
administration of scientific activity.
To correct these imbalances, readjustments are slowly being made, The State
Scientific and Technological Committee of the State Council was abolished and
replaced in part by the Science and Education Group, which was first noted its May
1971. The committee's functions were distributed among this new "group," the
Chinese Academy of Sciences, and the National Defense Science and Technology
C'ommitte,e. The "group" may be an interim organization, but it is now responsible
for civilian research and development planning, relations with foreign scientific
communities, and sctentilie and technical education.
A related development was the reappearance, after a long eclipse, of the State
Science and Technology Association. Before the Cultural Revolution, the association
was an influential advisory organization concerned with coordinating scientific and
technological activities and promulgating scientific knowledge, but it is now mainly
a front organization for foreign scientific contacts. The Chinese have equated the
association with the US Committee on Scholarly Communication with the Peoples
Republic of'China--a non-government body active in promoting better relations with
China. The association's sponsorship of conferences and journals has not resumed,
but technical societies and scientific publications are slowly reappearing.
The Chinese Academy of Sciences has undergone major changes. Only a dozen
of the mo,'e basic institutes, such as the Institutes of Physics and Mathematics, are
administered by the academy from the center. Many applied research institutes have
been placed under the direct control of provincial or municipal science and tech-
nology bureaus. The academy still has some control over the plans and resources of
these institutes, even though some of them have been placed entirely under the
Ministry of National Defense and other ministries. The Academy of Medic . Sci-
ences, the Academy of Agricultural Sciences, and numerous other industrial research
academics have been similarly reorganized.
Major organizational changes affecting science have apparently taken place
within the Ministry of National Defens too, but the nature of these changes is not
clear. The National Defense Science and Technology Committee appears to be intact
30 April 1973
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and has absorbed a number of research units from the Academy of Science and
other organizations, including the Institute of Almospheric Research, Certain units
suppoeting the military that were under the Central Meteorological Ilurcma, (Jccamll-
ogy ilurean, and Survey mind Cartography liurcaui reportedly have been placed under
more direct military control.
The problems involved In finding it p-oper balance between basic and applied
research have not been folly resolved, While there has been it reallocation of
resources between military and civilian research, the extent is not known, In some
respects, the mechanisms for exchanging scientific and technical information have
been nffcctcd adversely, but in general the redirection of the efforts of many
scientists and technicians toward amilied ?s? led to technical advances in
Chinn's industries.
30 April 1973 Chinese Affairs
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 I.radershlp Notes
Since his tehabiliNI tfoil on 12 April, former party secretary-general 'l cnr!
Ilsfao-ping has been fairly active not as active as China's busiest vice-premier, Li
Iisie--?nic.n, but certainly inure `o than the three other telunbilitated vice-premiers.
Ile was on his own on 20 April when lie escorted Mexican President FF,ehcvcrria to a
commune outside l'eking, but his other appearances have been at the side of LI
Ilsicn-111e11. 'feng's rehabilitation is reported to be the subject or study sessions
suggesting that the '.ip is trying to explain its Implications, Some Chinese
officials in Hong Kong .aid to view the rehabilitation as encouragement to other
disgraced cadres, but an article In Red Flag was less reassuring, It offered veteran
cadre-: official forgiveness, but made no reference to their returning to active duty.
This may Indicate that sonic leaden oppose 't'ang's new role,
Also in the limelight of late has been Clnon Fn-tai's wife, Teng Ying-chiao. She
has been elevated in official 1`stings to a group of leaders just below Politburo level,
and has made several public appearances. Her recent visibility may be the result of
her prominent rule in the Women's Frrlcration. a mass organization being rebuilt at
the lower levels. The organization has yet to be officially rc-established at the
national level, but Teng, one of its vice-chairmmen, was Identified in this post a year
ago. She and Mao's wife. Chiang Ching, arc China's most prominent women, but the
two rarely appear together. Mme. Mao has not been seen since 12 March.
On 21 April, Shanghai's thl:d-ranking party leader, Wang Hung-wen, was named
head of the Shanghai branch of the All-China Federation of Trade Unions, another
mass organization in the process of being rebuilt. Weng is sometimes in Shanghai and
sometimes i,, Peking, where he heads the list of central leaders just below the
Politburo, his new Shanghai post may be a clue to his role at the center; it is
possible that Wang is a leader of the national trade union organixasion.
Wang Hai-jung, who is alleged to be Mao's niece, may have missed out on a
promotion. As a deputy director of the Foreign Ministry's Protocol Department, she
could move into the directorship now that the former director has been reassigned
to the Liaison Office in Washington. The new US team in Peking has rioted.
however, that another deputy director is the "acting" protocol chief. Because of her
rumored tics to Mao, many have interpreted Wang's role in the leadership as stand-in
for the chairman. In fact, it was Wang who escorted Teng Hsiao-ping at his coming
out on the 12th, a move interpreted by some as a sin that ? o Personally
Teng's rehabilitation.
30 April 1973 Chinese Affairs
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Evnnomlc Iflmensions of (?hinew Diplomacy 25X1
I I
i he Itanslritntalion of ('Itinesc foreign trade policy now in pr,iecss has both
shall-eci and hem shai ed by the global diplomatic stratrg ' Peking has been pn;cuing
over the pass three year: halving iwercotnc the cclf?imp ccd diplomatic Isolation of
the ('ultural Rc%olution by nortmrli,ing relations with the major Western powers.
('bins, is now laying the groundwork for a substantial expansion in economic
relations witlt the advanced industrial nations of she non-Cotttrttuniat wo-Id. One
goad of this expansion is a more rapid rnoderniialin i and industriali>ation of the
('hincse cconnttty than could he rraliteil by adhering strictly to the conurvalive
tittancial and trade policies that have charaelcriled Chilli's economic behavior over
the paid decaulr,
Ill late 1972 and early 1973, the ('hinese launched a drive of unprrcedenicd
scope to import scientific knowledge and advanced industrial technology from Japan
and the West. In the first four mont!is of 1973, the Chinless purchased almost S3()0
million in whole pctrtic'hcntical plants front Japan. West t'.uruhc, and the United
States. Chinese purchases of plants and technology will total over S i billion if all
deals currently tinder discussion are completed,
The largest sum put into whole-plant purchases from Japan at'd the Wcst In any
previous year was S9S million In I90. China first bought entire plants from the
non-('ontnttrnist worid in 11963. and it increased such purchases yearly until 1965.
The importation of Western technology came under strong attack during the
Cultural Revo otion. however, and purchases fell to S3 million In 196(,. Very few
plants were purchased between 1967 and January 1973,
This year's large increase in plant purchases has been facilitated by China's
willingness to finance many of them through five-year credits, A further increase in
plant purchases in future years might require the use of longer term financing, and
European businessmen in Peking have said the Chincsc have expressed a willingness
to accept ten-year terms. While it has accepted five-year credits both before and
since the Cultural Revolution, China has. never accepted a ten-year loan from a
non4"onununist country.
30 April 1973
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In an apparent effort to lay the theoretical groundwork for trade expansion, a
Chinese spo,kcsntan in mid-April offered what amounted to a trdefinition of the 25X1
Maoist erottotttir doctrine of "srlf?trliancr." Speaking at IC'Ahi. Chincsc represent.
ative An Chih?yuan caicl that "sr!f?rehancc means for a country in rely mainly
on...if% people, exploit natural resources, or use foreign tescturc.?cs..accotding to its
own needs and pocsibilitics."'To make his point tnorr explicit. An said, "ccIf?trliancr
does not preclude international economic and trade relations." lie added that the
Chinese are "ready to learn from the advanced experience of other peoples to make
up for our own inadequacy,"
An was speaking of self-reliance as an operative principle for developing
nations, but lie made clear that he included China in this category. Ile was careful to
%ay that (nrriv_n rrsnt,rces must be obtained on the principle of equality and mutual
benefit, The normalization of diplomatic relations with the free worlc!'s major
industrial countries In No places Peking in the position of bring ahlc at ti,ttcc to
play thcsc countries off against one another as they compete to sell China the
advanced technology it needls and wants to strengthen itself economically and
militarily. fly carefully planning its purchases. Peking will try to avoid becoming so
closely tied to an sin ,wcr that its independence or freedom of action will he
im aired
30 April 1973 CWhicir Affairs
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('11RONOUK,V
1.15 April Pith t"hina Victnani hm-tder railway c -tifctcnc:c licid ill Iianoi;
( tiinc6c delegation trccivcd by l'rrtnict l'han' Van Polio.II 25X1
12 April ('hutcee delegation atrivcs iii Moscow for tc-w-lcvcl trade falks.I 25X1
1-3 April Somali nil iislct of foreign Italic and a (*hanainn trade drlrp.'l ~-n
arrive iii I'ckitig.II
IS April the anm-:d spring export coninntdities. fait opens in Canton;
officials Itc)m tlic IJS Consulate ill ilong Kung attend tot the liter
titiic,
ir- April 1>clcgation of (`hina?lapan l?'ricndchip Association, icci by LW)
c`hrnl?:hitt,:+rtivcv in Tokyo for montli-Imig visit 0
16?'1 April Iligh?ranking l'citlici l.aodclcprtinnhcadcct byNonhak Pltc-umovan
in Peking; tinlds talks with Li Ilsictt?nicn, Madame Hirsh. and
Siltanonk.1
18 April Advance party of 1'RC Liaison Office. herded by Deputy (`hicf
V) April
~~`cst (ictTri:iny's first ambassador to the 1'1((' presents his :mdcn-
tials to l long 1'1?w lo:
19-24 April Mcxican President I citcvetria visits Peking: (`tibia agrccs to si :tt
l'r~tocul it of the `I'Maly of T'.latclul,cti. to a S40,million INA
agtecnicn^t. and to cultural, scientific, and technical exchanges for
I9i 3?14i I
20 April Prl'plr't flatly "(?omnicnlator" publishc% on situation In Laos and
in Canibodla.I
Cambodian pilot who tmnibcd presidential palace in i'tinotn Pcnti
on 17 March arrivc% 'cking; holds press conkcrrnce and talks
with Ych Chicn?ying,14
A p..;t L1ad11arnic With in Peking cn route to Vietnam from North Korea.
r 1-rJ h-?
April
matters. =
First Australian ambassador arrivcs in Peking= 25X1
Canadian minister of energy arrives for discussion of petroleum
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Ihit.t I'IZC_' agricultural IV,0110ctauts arrive to Togo,
0
?,1 AI-ril Pcking broadcasts a l'ri+ple'.4 1)01& editorial noting the an-ulta,
11ee111? cornering of mUnictl-a) ftade union congrcascs in !'eking
and Shanghai between Ir- and 21 April; the editorial is the first
.III thotihalive ndomelnent of the line that Lin I'iao wa. "uitta?
25X1 riyh t,sL' [
2-1?215 Al-til On occasion of third cuutivcr ary of Indochina sin)-t11if confcrrncc,
Peking sends congratulatory message signed by ('110n I:n?lai attd
"frog Pi?wu to Viciname.e, Lao, :n1d ('anlhodian conferees;
l'ruplr') 1Ja11,-, 1111bli lle% edit+lti.tl. and 1'ch ('hietl- ~inI aci~ire..cs
reception in Peking hosted by Canlhodfan exiles, II
Xuan T buy in Peking en tonic hi Ilanot from Paris., holds talky
Willi Chou 1`11-131, elc-ng with Iiuang ('hen, tlcsignatcd head of LIS
Liai.ot- office, and Sillanouk.1 I
25 April Nigerian Corttrnissionct for I"oreigr- Affairs arrives in Pcking.I ~ 25X1
30 April 1973
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