Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 1

INR-NIE files

No. 404
National Intelligence Estimate¹

secret
NIE–10–7–54

Washington, 23 November 1954.

Communist Courses of Action in Asia^* Through 1957²

the problem

To estimate Communist, particularly Chinese Communist, courses of action in Asia through 1957.

conclusions

1. Although the USSR possesses preponderant influence in the Sino-Soviet partnership, the main outlines of Communist policy in Asia are almost certainly determined jointly by consultation between Moscow and Peiping, not by the dictation of Moscow. Chinese Communist influence in the Sino-Soviet alliance will probably continue to grow. We believe that such frictions as may exist between Communist China and the USSR will not impair the effectiveness of their alliance during the period of this estimate.

2. The current tactic of the Communists in Asia appears to be a variant of their familiar policy of combining professions of peaceful intent with continued efforts at subversion and continued expansion of the Communist capability for war. The chief new element in this policy, evident since the death of Stalin and particularly since the calling of the Geneva Conference in early 1954, is a heightened effort to convince non-Communist countries that Moscow and Peiping desire “peaceful coexistence,” that reasonable and profitable arrangements with the Communist Bloc are possible, and that US policy is the only obstacle to a new era of peace in Asia. This new element conforms with present world-wide Communist tactics of minimizing tensions and of exploiting methods to divide the free world, and particularly to detach the US from its allies, during a period in which the significance of US nuclear superiority is being reduced. The professed Communist desire for “lessened tensions” in Asia appears in fact, however, to be marked by a desire to lessen the dangers of full-scale US military action against mainland China and to dull the vigilance of non-Communist Asia, while at the same time continuing Communist expansion by means short of open war. Within this framework, the Communists are prepared to maintain a state of extreme tension with the US and Nationalist China, accepting the attendant risks. In brief, Communist China and the USSR will continue their present policy of wooing Asia with protestations of peace, while at the same time continuing to subvert Asia, in the expectation that this long-range “peaceful coexistence” policy will with minimum risk result in both the realization of their present military and economic objectives and the eventual elimination of US influence from Asia.

3. The Chinese Communists will continue committed to the “liberation” of Taiwan and the offshore islands, defining this issue as an internal affair in which foreign interference will not be tolerated. Hence this issue will continue to present the greatest danger of largescale warfare in Asia.

4. We believe that as long as the US continues its firm support of the Chinese National Government, remains committed to the defense of Taiwan, and continues to keep major air and naval units available in the general area, the Chinese Communists will not attempt a fullscale invasion of Taiwan or the Pescadores. Short of invading Taiwan, the Communists will almost certainly concentrate on an interim policy of subversion and other means of softening up Taiwan for ultimate takeover.

5. We believe that the Chinese Communists will almost certainly increase the scale of their present probing actions against the Nationalist-held offshore islands, and will probably attempt to seize some of the major offshore islands. They would almost certainly attempt to seize some of the major offshore islands if their probing actions were to provoke no appreciable US counteraction.^†

6. We believe that the Viet Minh now feels that it can achieve control over all Vietnam without initiating large-scale warfare. Ac cordingly, we believe that the Communists will exert every effort to attain power in South Vietnam through means short of war. Should South Vietnam appear to be gaining in strength or should elections be postponed over Communist objections, the Communists probably would step up their subversive and guerrilla activities in the South and if necessary would infiltrate additional armed forces in an effort to gain control over the area. However, we believe that they would be unlikely openly to invade South Vietnam, at least prior to July 1956, the date set for national elections.

7. Elsewhere in Asia (the Nationalist-held offshore islands and South Vietnam excepted as per paragraphs 5 and 6 above), the Communists will probably not, during the period of this estimate, initiate new local military actions with identifiable Soviet, Chinese Communist, North Korean, or Viet Minh forces.

8. The Asian non-Communist countries are dangerously vulnerable to the expansion of Communist power and influence because of their military weaknesses and consequent fear of antagonizing Communist China, their political immaturity and instability, the social and economic problems they face, and the prevalence of anti-Western nationalism. The effect of the Geneva Conference and subsequent events has been to increase this vulnerability. Accordingly, the Communist leaders almost certainly estimate that they have a wide area of maneuver open to them in Asia in which they can safely continue efforts at subversion and support of armed insurrection without incurring unacceptable US counteraction.

9. The Communists will probably continue to exercise considerable control in the northern provinces of Laos and will retain a capability for subversive activity against the Lao Government. However, we believe that the Laotians can limit Communist political advances and that an anti-Communist government will remain in power providing it continues to receive outside assistance and the Viet Minh do not invade or instigate widespread guerrilla warfare. We believe that the nature of Communist aggressive action against Laos will be moderated by the Communist desire to continue their “peaceful coexistence” line in Asia, particularly directed toward Indian reactions, and to a lesser degree by the possibility of US counteraction.

10. In the absence of a unilateral attack by ROK forces, resumption of hostilities by the Communists in Korea is unlikely.

11. Japan and India will become increasingly important targets for Communist “coexistence” policies and propaganda. We believe that the Communists will continue their efforts to undermine Japan’s stability and present orientation and will seek an expansion of economic and cultural relations. They will make greater effort to create the impression that their terms for a resumption of diplomatic relations with Japan are flexible, and may offer to conclude a formal peace settlement during the period of this estimate. We also believe that the Communists will focus increasing attention on India in an effort to insure at least its continued neutralism, and if possible to bring it closer to the Communist Bloc. However, even at the expense of friction with India, Communist China will seek to increase its influence in the Indo-Tibetan border area.

12. Communist influence in Indonesia has grown considerably since the present government took office in July 1953, and as a result of recent political developments the government is increasingly dependent upon Communist parliamentary support for its continued existence. We believe the Indonesian Communists will probably continue to support the present government or, if it falls, to work for the establishment of another government in which they would participate or in which their influence would be strong. They will try, through both constitutional and illegal means, to expand their influence in the bureaucracy and the armed forces, and to prevent the formation of a unified and effective opposition. They will probably also attempt to strengthen their capabilities by the organization of a Party-controlled armed force. In general, however, they will probably avoid highly aggressive tactics in the near future, lest these provoke counteraction by the military or by domestic opposition groups before their own strength has become great enough to deal with it. However, present strengths and trends are such that a Communist takeover in Indonesia by subversion or force is possible during the period of this estimate.

I. Introduction

13. The net effect to date of the Geneva Conference and of subsequent developments has been to advance the Communist position in Asia. Western prestige, in particular that of France and the US, has suffered greatly. Absorption of North Vietnam has strengthened the Communist strategic position in Southeast Asia, and has greatly increased Communist capabilities to subvert the remainder of Indochina, and Southeast Asia as well. Communist China’s claims to great power status have been enhanced. Lastly, the Communists’ “peace offensive” has had some successes in further deceiving many non-Communist elements as to ultimate Communist aims. The conclusion of the eight-power Manila Pact and the establishment of closer ties between Pakistan and the US have some potential for countering future Communist pressure, but their effect to date has not offset the gains of the Communists.

II. General Considerations

Communist Objectives in Asia

14. The USSR and Communist China share the following long-range objectives in Asia: (a) augmentation of the military and economic strength of Communist Asia; (b) elimination of US influence in Asia, and extension of the area of Communist political influence; and (c) neutralization and eventual domination of non-Communist Asia.

15. We believe that Communist China seeks: primarily, to carry out rapid industrialization of its economy and modernization of its military establishment and, for this purpose, to obtain greater Soviet assistance; to increase Chinese Communist influence over Communist movements in Asia; to gain an acknowledged position as a world power and as the leader of Asia; to gain control of Taiwan; and to eliminate the Chinese National Government. Communist China considers Taiwan to be part of China, and looks upon its acquisition as unfinished business of the Civil War. Apart from this, however, we believe that the Chinese Communists feel under no immediate compulsion to expand China’s present borders, but will continue to keep alive certain border demarcation disputes.

16. We believe that the USSR seeks: to make Communist China a strong and reliable ally; to this end, to increase Communist China’s military and economic strength, but to keep China dependent upon the USSR; and to increase Soviet influence over Communist movements elsewhere in Asia.

17. Certain Communist leaders elsewhere in Asia probably entertain objectives for their countries which do not coincide with the short-term aims of Moscow and/or Peiping. The objectives of the local parties may be considered in the formulation of Communist tactics, but over-all Bloc strategy will probably be formulated primarily on the basis of Sino-Soviet objectives, sacrificing if necessary the ambitions of local Communist parties.

Communist Relationships

18. The USSR has never controlled Communist China as it has its European Satellites, but seems rather to have dealt with China as an ally. In this partnership Moscow possesses preponderant influence because of the superior power of the USSR and because of Communist China’s military and economic dependence on the USSR. The USSR is acknowledged by Communist China as leader of the Bloc. Nevertheless, the main outlines of Communist policy in Asia are almost certainly determined jointly by consultation between Moscow and Peiping, not by the dictation of Moscow. Communist China possesses capability for some independent action, even for action which the USSR might disapprove but which it would find difficult to repudiate. We believe, however, that the two countries are disposed to act in concert.

19. The influence of Communist China in the Sino-Soviet alliance has been growing since 1949. This growth has been accelerated since the death of Stalin, and has recently been made evident in the Sino-Soviet accords of 12 October 1954. This process is likely to continue during the period of this estimate. On a number of questions frictions may exist between Moscow and Peiping: over the control of Asian Communist parties, the nature and timing of action against Chinese Nationalist territories, the amount and character of Soviet aid to China, and perhaps other issues. We believe, however, that such frictions will not impair the effectiveness of the alliance during the period of this estimate.

Communist Strengths, Weaknesses, and Capabilities^‡

20. The Chinese Communist regime has effected a virtually complete consolidation of control in continental China. There is considerable popular resentment of the central authority, but there is no indication of serious organized resistance.

21. On the basis of present evidence, we believe that Chinese industrial expansion under Peiping’s five-year plan will result in nearly doubling by 1957 the 1952 output of the modern industrial sector. However, farm output has lagged during the last two years, and during the past year the regime has moved to impose more rigorous controls over the economy in an attempt to maintain its industrial progress. To counteract increasing consumption pressures, Peiping has monopolized the distribution of important consumer goods and has instituted a rationing system for large segments of the population. To increase its controls over production, the Communist regime is establishing a program providing for compulsory sales of specified amounts of farm products to the state, and has speeded up socialization measures which by 1957 aim to organize over half the nation’s farmers and handicraft workers into production cooperatives and to place virtually all industry and trade under state enterprises.

22. The Chinese Communists have certain capabilities for, and have demonstrated considerable skill in, employing trade or trade overtures for political warfare purposes, even with the limited means at their disposal. Moreover, the regime has with some success sought to convey the impression that relaxation of trade controls would open large markets for industrial products in Communist China and would develop sources of raw materials, a development which would ease some of the problems now facing industrial countries such as Japan and certain Western European nations. In addition, the regime has impressed many non-Communist countries with its statements that trade controls are a major hindrance to a general reduction of political tensions in Asia. Actually, these claims of the possibility of greatly expanded trade appear to be largely propaganda. In time, with the development of its industrial base, Communist China’s capability for political warfare by economic means will be enhanced. The USSR’s capability in this regard in Asia is far greater than that of China, but is still substantially limited by internal Soviet demands and other pressing needs within the Bloc.^§

23. The Chinese Communist Army of over two million has been gradually improving in combat and organizational effectiveness. The role of the Navy will be primarily limited to operations in coastal waters. Its capabilities may be increased by the addition of at least 6 submarines and 50 motor torpedo boats. The Air Force, which has some 2,200 aircraft, of which more than half are jet-propelled, is gradually improving in numbers of aircraft, quality of aircraft and equipment, and in combat effectiveness. It is limited primarily to operations under conditions of good visibility, and is unlikely to develop a substantial all-weather capability during the period of this estimate. During the period of this estimate, the Chinese armed forces will remain critically dependent on the USSR for resupply of heavy equipment, spare parts, aircraft, and POL. However, the strategic position of China will be improved by the expected completion in 1955 of a new Sino-Soviet rail link through Mongolia.

24. Chinese Communist forces are capable of overrunning Thailand, Burma, and the free states of Indochina against the non-Communist forces currently present in those areas, or against any indigenous forces likely to be developed in the area during the period of this estimate. The Chinese Communists will have the capability throughout the period of this estimate to seize Taiwan, the Pescadores, and the offshore islands if opposed by Chinese Nationalist forces alone. Communist China is capable of successfully defending itself against any invasion effort by any non-Communist Asian power, despite China’s logistical problems and vulnerabilities to attack.

25. The demands of Communist China’s domestic programs, together with China’s vulnerability to air attack, will probably tend to inhibit Chinese acceptance of major risks in the field of foreign affairs. If, as we believe probable, these domestic programs go forward without major setbacks, this progress will augment China’s capabilities for extending Communist influence in Asia. There might be some danger of foreign policy adventurism in the event of major setbacks in China’s domestic programs. We believe, however, that on balance such setbacks would have the opposite effect—that of dictating abstention from military aggression.

26. The Communist regimes in North Korea and particularly in North Vietnam augment Chinese Communist and Soviet military and political strengths in Asia. These two areas will serve both as buffers protecting China and the USSR, and as bases for further Communist political or military expansion in Asia. The economies of both North Korea and North Vietnam will be closely coordinated with those of the Communist Bloc during the period of this estimate. Primarily because of Bloc aid, North Korea will probably effect substantial economic recovery by 1957. However, pre–1950 levels of production in North Korea will probably not have been attained, and heavy demands on the populace will almost certainly detract from willing support of the regime’s programs.

27. The Viet Minh is consolidating and reorganizing its armed forces by grouping previously independent regular and regional units to form new divisions with augmented firepower. This augmented firepower will result principally from a high level of Chinese aid in 1954, including illegal aid since the cease-fire. By the end of 1955, the Viet Minh will probably have at least 11 or 12 infantry divisions, two artillery divisions, and one anti-aircraft division. These developments would more than double the pre-Geneva combat effectiveness and capabilities of the Viet Minh regular army. It will exert an even greater intimidating effect upon the Vietnamese than it has to date. A Viet Minh Air Force will probably be developed, covertly or otherwise, during the period of this estimate. The Viet Minh regime will continue to require Bloc military, technical, and possibly economic assistance, and its policies will probably reflect a consensus of Sino-Soviet views. The Viet Minh is expanding and improving its transportation and communication facilities, including rail and highway links with South China.

28. The large overseas Chinese communities in many Southeast Asian countries provide the Chinese Communists with a significant potential channel of subversion. Such support as was given by these overseas Chinese to the Communist regime has diminished substantially since 1950 under the impact of Communist domestic policies affecting the families and property of overseas Chinese, as well as a consequence of Communist efforts to extort remittances from overseas Chinese. At present the great bulk of the 10 million overseas Chinese tend to be politically inactive and neutral, with the politically-minded minority split between allegiance to the Communists and the Chinese National Government. However, Communist influence among overseas Chinese youth has been increasing, especially since the Geneva Conference. In sum, the subversive role of the overseas Chinese in Southeast Asia generally is limited by the apolitical nature of most overseas Chinese, by their isolation in the Southeast Asian communities, and by the popular onus they tend to bring to any cause with which they are too closely associated. However, these overseas Chinese communities maintaining numerous ties with the Chinese mainland will provide a useful channel for Communist infiltration, espionage, and propaganda activity, and would, in the event of war or insurrection, constitute a grave threat.

Non-Communist Vulnerabilities

29. Within most of the countries of non-Communist Asia, a state of uneasy equilibrium exists. No Communist party outside of Vietnam and possibly Laos at present possesses a military strength sufficient by itself to threaten seriously the existence of the national government. Furthermore, no Communist party in the area, with the exception of that in Indonesia, has the capability of significantly influencing the national government’s alignment. Despite these facts, the Asian non-Communist countries are dangerously vulnerable to the expansion of Communist power and influence because of their military weaknesses and consequent fear of antagonizing Communist China, their political immaturity and instability, the social and economic problems they face, and the prevalence of anti-Western nationalism. The effect of the Geneva Conference and subsequent events has been to increase this vulnerability.

30. South Vietnam remains the most vulnerable to Communist subversion and expansion. Developments in Vietnam will have a direct bearing on non-Communist prospects in Laos and in Cambodia, and in turn Communist successes in South Vietnam, Laos, or Cambodia would markedly increase the vulnerability of other Southeast Asian states to Communist tactics.

Communist Estimate of the Situation

31. There has been no evidence of change in the basic Communist view that the US represents the center of opposition to the maintenance and extension of Communist power in Asia. While the Communists almost certainly believe that the ultimate US objective in Asia is the overthrow of the Chinese Communist regime, they interpret present US domestic and foreign policies as indicating that the US in the foreseeable future does not intend, unless provoked by Communist action, to wage large-scale war or to run great risks thereof in Asia. Furthermore, they probably also interpret these policies, especially US restraint in Korea and Indochina, as indicating that immediate US policies in Asia go no further than opposing the further expansion of Communist power and influence, building up the strength of non-Communist Asia, and hindering achievement of Chinese Communist domestic objectives.

32. The Communists probably also believe that their capabilities for a long, primarily political struggle are greater than those of the US. The Communist leaders almost certainly estimate that they have a wide area of maneuver open to them in Asia in which they can safely continue efforts at subversion and support of armed insurrection without incurring unacceptable US counteraction. The Communists probably recognize that differences among the non-Communist powers on many aspects of Asian policy make it difficult for the US to bring effective force to bear against Communist expansion through measures short of overt aggression.

33. The Communists almost certainly believe that recent events, while demonstrating a US reluctance to become involved in major war in Asia, have delimited more clearly the area in which the US would take military counteraction to prevent Communist military conquest. In particular, the Communists probably believe that open military aggression against Japan, Taiwan, the ROK, Thailand, the Philippines, or Malaya would lead to strong US counteraction, probably including action against mainland China and possibly including the use of nuclear weapons. They probably further estimate that an overt military attack against Laos, Cambodia, or South Vietnam might result in at least local US military action, and that an overt attack on any other non-Communist Asian state would entail serious risk of US military counteraction. Moreover, there is almost certainly also a large twilight area of possible courses in which the Communists are uncertain of US reactions. Such courses probably include: attacks on the Nationalist offshore islands, greatly intensified paramilitary subversion in Indochina, or infiltration of armed groups in Thailand.

34. The Communists, particularly the Chinese Communists, almost certainly regard the orientation of Japan and India as the key to the future balance of power in Asia. The Communists probably believe that Japan’s ties to the West can be weakened by a policy involving economic and political inducements. They probably consider that in the near future a policy toward India which shows at least a superficial respect for India’s position in South and Southeast Asia will best maintain India’s neutral position.

35. The Communist estimate of US actions and reactions in Asia will be the factor of paramount importance in their determination of courses of action in Asia throughout the period of this estimate.

III. Main Lines of Communist Policy in Asia

36. The current tactic of the Communists in Asia appears to be a variant of their familiar policy of combining professions of peaceful intent with continued efforts at subversion and continued expansion of the Communist capability for war. The chief new element in this policy, evident since the death of Stalin and particularly since the calling of the Geneva Conference in early 1954, is a heightened effort to convince non-Communist countries that Moscow and Peiping desire “peaceful coexistence” that reasonable and profitable arrangements with the Communist Bloc are possible, and that US policy is the only obstacle to a new era of peace in Asia. This new element conforms with present worldwide Communist tactics of minimizing tensions and of exploiting methods to divide the free world, and particularly to detach the US from its allies, during a period in which the significance of US nuclear superiority is being reduced. The professed Communist desire for “lessened tensions” in Asia appears in fact, however, to be marked by a desire to lessen the dangers of full scale US military action against mainland China and to dull the vigilance of non-Communist Asia, while at the same time continuing Communist expansion by means short of open war. Within this framework, the Communists are prepared to maintain a state of extreme tension with the US and Nationalist China, accepting the attendant risks. In brief, Communist China and the USSR will continue their present policy of wooing Asia with protestations of peace, while at the same time continuing to subvert Asia, in the expectation that this long-range “peaceful coexistence” policy will with minimum risk result in both the realization of their present military and economic objectives and the eventual elimination of US influence from Asia.

37. The Communists will attempt to impress free-world countries, particularly Japan and the Asian neutrals, with their willingness to negotiate outstanding issues. In so doing, they will probably make proposals for settlements which may be attractive to some non-Communist nations but contrary to US interests, and, as at Geneva, may on occasion make significant procedural and tactical concessions. Communist China may attempt to negotiate, on the basis of the Chou–Nehru five points,³ a series of mutual nonaggression, coexistence understandings with most of its Asian neighbors. In these efforts, the Communists will continue to seek greater recognition and acceptance of the Peiping regime, and to hold out the promise that Asian and world problems can be solved by Great Power deliberation if Peiping is permitted to participate therein. In addition, the wisdom of closer diplomatic ties with Peiping will be impressed upon non-Communist Asia by constant exaggeration of Communist China’s strength, progress, and peaceful intent.

38. The Communists will almost certainly make every effort to publicize the attractive possibility for non-Communist nations of increased trade with the Bloc, and to blame the trade control program, and the US as the chief supporter of that program, for the failure of international trade to reach higher levels. Communist China will also seek such trade to supplement Bloc assistance to China’s industrialization program, to reduce such demands on Bloc over-all economy as this program may now entail, to carry out politico-economic courses of action elsewhere in Asia, and to reduce the level of domestic political pressures required to support economic programs. It is probable that Communist China will continue to exchange trade missions with many non-Communist countries and to negotiate trade agreements, both formal and informal, which express hopes of a high level of trade and disapproval of trade restrictions.^||

39. Except as noted below with respect to the Chinese Nationalist-held offshore islands and South Vietnam, the Communists will probably not, during the period of this estimate, initiate new local military actions in Asia with identifiable Soviet, Chinese Communist, North Korean, or Viet Minh forces. Communist courses of action will probably be designed to expand the area of political struggle while maintaining and increasing capabilities for future military action. The Communists will almost certainly attempt increasingly to utilize Communist China’s power and prestige in Asia as a spearhead for Bloc policy there.

40. Despite our estimate that new Communist military aggression in South and Southeast Asia is unlikely, the Communists might undertake new aggression in reaction to US policies, or a result of miscalculation on their part of probable US reactions, or because of prospects of easy success in some area, especially if the strength and determination of the US and states cooperating with it seemed to be weakened. In particular, acute crises may arise out of the Geneva settlement or out of the Chinese Communist determination to gain possession of the Nationalist-held off-shore islands and Taiwan. Thus, throughout the period of this estimate, the possibility of war remains.

41. The Chinese Communists will continue their efforts to subvert and exploit the overseas Chinese in Southeast Asia. They will attempt to gain control over schools and youth, commercial and other groups, and will exploit continuing ties between these communities and mainland China for financial purposes, and as a channel for infiltration, espionage, and propaganda. The degree of Communist success in exploiting the overseas Chinese will be strongly influenced by the overall fortunes of Communist China. However, because the usefulness of most of these Chinese is limited (their members are apolitical, culturally isolated, and disliked by the indigenous populations), the Communists will probably concentrate their activities primarily on the governments and indigenous populations of Southeast Asian countries. The Chinese Communists may even make compromises on the nationality status of overseas Chinese, believing that such compromises would not greatly diminish the subversive potential of the overseas Chinese communities.

IV. Specific Courses of Action

Nationalist China

42. The issues between Nationalist and Communist China will continue to present the greatest danger of large-scale warfare in Asia. The Peiping regime will continue committed to the “liberation” of all Chinese Nationalist-held territory, defining this issue as an internal affair in which foreign interference will not be tolerated. The future course of Communist action toward the offshore islands and Taiwan will be determined largely on the basis of the Communist estimate of US reactions.^¶

43. We believe that the Chinese Communists will continue to bomb and conduct raids against the Nationalist-held offshore islands, to occupy undefended adjacent islands, and to increase air, naval and artillery activities. They will almost certainly increase the scale of such probing attacks on the offshore islands, and will probably attempt to seize some of the major offshore islands during the period of this estimate. They would almost certainly attempt to seize some of the major offshore islands if their probing actions were to provoke no appreciable US counteraction. On the other hand, as long as the US responds to these probing attacks with shows of force, the Communists may not attempt all-out assaults against the major offshore islands. In any event, the Chinese Communists may attempt to provoke local incidents involving US forces which could then be put formally before the UN as a case of US aggression and of US interference in the internal affairs of China.^**

44. We believe that as long as the US continues its firm support of the National Government, remains committed to the defense of Taiwan, and continues to keep major air and naval units available in the general area, the Chinese Communists will not attempt a full-scale invasion of Taiwan or the Pescadores. They probably believe that such actions would lead to war with the US, possibly including nuclear weapon attacks on mainland China. If the Chinese Communists should come to believe that US determination to defend Taiwan had markedly decreased, the liklihood of a Communist assault on Taiwan would be greatly increased. Finally, if the Chinese Communists should come to believe in the course of their tests of US intentions or otherwise that the US would not in fact defend Taiwan and the Pescadores, they would probably attempt to take over Taiwan by force.

45. Short of invading Taiwan, the Communists will almost certainly concentrate on an interim policy of subversion and other means of softening up Taiwan for ultimate takeover. To this end, they will probably attempt to undermine the international and domestic position of the Chinese National Government and to weaken its ties with the US. Through propaganda and diplomacy, they will attempt to embarrass and discredit the US and the National Government, to exacerbate existing differences between the US and its allies and other non-Communist powers on the Taiwan issue, to promote international favor for an ultimate disposition of Taiwan acceptable to themselves, and to put pressure on the US to withdraw its military protection and support. Meanwhile, through continuing operations against the offshore islands, psychological warfare, subversion, and perhaps nuisance air raids against Taiwan, they will try to undermine Nationalist morale, increase their espionage and sabotage potential on Taiwan, encourage defections, and promote political unrest on the island.

[Here follows discussion relating to other countries in Asia.]

1. A note on the source text states that this estimate superseded NIE–10–2–54, Document 179.
2. Asia, as here used, includes Japan, Taiwan, the Philippines, Indonesia, Ceylon, and all of mainland Asia east of (but not including) Iran and Afghanistan. [Footnote in the source text.]
2. A note on the source text reads as follows: “Submitted by the Director of Central Intelligence. The following intelligence organizations participated in the preparation of this estimate: The Central Intelligence Agency and the intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, anthe Joint Staff. Concurred in by the Intelligence Advisory Committee on 23 November 1954. Concurring were the Special Assistant, Intelligence, Department of State; the Assistant Chief of Staff, G–2, Department of the Army; the Director of Naval Intelligence; the Director of Intelligence, USAF; the Deputy Director for Intelligence, The Joint Staff. The Atomic Energy Commission Representative to the IAC, and the Assistant to the Director, Federal Bureau of Investigation, abstained, the subject being outside of their jurisdiction.”

3. The Assistant Chief of Staff, G–2, believes that this paragraph should read:

   “We believe that the Chinese Communists will probably increase the scale of their present probing actions against the Nationalist-held offshore islands and are likely to seize some of these islands if such action appears desirable as part of their overall political-military-psychological program.” [Footnote in the source text.]

4. Certain of these questions are discussed in detail in NIE 11–4–54, “Soviet Capabilities and Probable Courses of Action through Mid–1959,” dated 14 September 1954. [Footnote in the source text.]
5. The problem of trade controls is being examined in detail in NIE 100–5–54, “Consequences of Various Possible Courses of Action with Respect to non-Communist Controls over Trade with Communist China,” currently in preparation. [Footnote in the source text.]
3. Reference is to the five principles set forth in the communiqué issued on June 28, at the conclusion of Chou’s visit to India, as those which should guide relations between the two countries: mutual respect for each other’s territorial integrity and sovereignty, nonaggression, noninterference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence. See footnote 3, Document 233.
4. The problem of trade controls is being examined in detail in NIE 100–5–54, “Consequences of Various Possible Courses of Action with Respect to non-Communist Controls over Trade with Communist China,” currently in preparation. [Footnote in the source text. The estimate under reference is apparently NIE–100–55, Jan. 11, 1955.]

5. The Assistant Chief of Staff, G–2, believes that this paragraph should read as follows:

   “Chinese Communist activity against Taiwan and the offshore islands has fluctuated during the last four years from almost complete indifference to recent heavy pressure against the Chinmens and the Tach’ens. Current pressure appears to be part of an over-all pattern of Communist politico-military action. The Peiping regime is committed to the “liberation” of all Chinese Nationalist-held territory and has defined this issue as an “internal affair” in which foreign interference will not be tolerated. A successful assault against the offshore islands is well within Communist capabilities, and it would be unreasonable to assume that they think otherwise. These islands pose no particular military threat to the Chinese Communists and are of only limited military, political, and psychological value to the Chinese Nationalists. However, the Chinese Communists, by continuing military pressure against the offshore islands without direct assault, are able to keep the Chinese Nationalists and the US on the defensive wondering where the Communists will strike next. In addition, Communist propaganda concerning Taiwan tends to accentuate the divergence of views between the US and her allies on the China question.” [Footnote in the source text.]

6. The Assistant Chief of Staff, G–2, believes that this paragraph should read as follows:

   “We believe the Chinese Communists will continue to bomb and conduct raids against the Nationalist-held offshore islands, to occupy undefended adjacent islands, and to increase air, naval, and artillery activities. Peiping probably estimates that efforts to take the Nationalist-held offshore islands may involve a risk of war with the US. However, in spite of their estimate that risk of war may be involved, the Chinese Communists are likely to attempt to seize some of the Nationalist-held islands if such action appears desirable as part of their over-all political-military-psychological program.” [Footnote in the source text.]