Foreign Relations of the United States, 1955–1957, China, Volume III

244. National Intelligence Estimate¹

NIE 13–57

Washington, March 19, 1957.

COMMUNIST CHINA THROUGH 1961²

The Problem

To examine the present situation in Communist China and its international relations, and to estimate probable developments during the next five years.

Conclusions

1. The Chinese Communist Party will almost certainly continue to exercise effective control over mainland China during the period of this estimate and will press forward with its program of creating a powerful industrialized Communist state. Through a combination of incentives and repression the regime will probably be able to prevent popular discontent from becoming a significant factor in retarding the momentum of its program. (Para. 19)

2. The Chinese Communists will probably continue to make substantial progress in industrial development but agricultural production will probably increase at only 50 percent of the planned rate of increase and thus will tend to restrict the rate of overall economic growth. (Para. 37)

3. Communist China has placed great emphasis upon maintaining and developing its armed forces as a basic aspect of national power. With Soviet assistance, its military capabilities have become far greater than those of any other Asian power and will probably continue to increase during the next five years. (Paras. 38–39)

4. The position of the Chinese Communists in the Communist world has been greatly enhanced as a result of developments since the death of Stalin and particularly because of the prominent role they have played in Bloc affairs in the past year. Peiping will probably further increase its influence within the Communist Bloc and will have an important voice in matters affecting the Bloc as a whole. Communist China will continue to rely on the Bloc for the bulk of its military and economic imports. Although it is probable that some conflicts of interest and disagreements will develop between Moscow and Peiping, it is highly unlikely that either will permit such conflicts to impair Sino-Soviet solidarity. (Paras. 40, 43)

5. Communist China’s influence has increased markedly in the non-Communist world, and its presence is especially felt in Asia. The Chinese Communists have been able to create the impression in much of non-Communist Asia that Communist China is a dynamic, permanent, and perhaps not unfriendly world power, which it is unwise to offend by too close alignment with the West. At the same time, however, there is apprehension concerning Communist China’s real intentions and a recognition, though seldom voiced publicly, of the importance of the US in restraining Communist China from overt aggression. (Paras. 44, 54, 57–58)

6. The replacement of Western influence by Communist influence in Asia will continue to be a major Chinese Communist objective. In its approach to this objective and other international problems, Peiping will probably try to avoid courses of action which it believes would provoke US military intervention. It will remain hostile to the US, and will not offer major concessions on basic issues. Nevertheless, it will probably endeavor to appear conciliatory and flexible on international issues. At the same time, it will continue its subversive efforts, and will take advantage of opportunities for Communist expansion, possibly including the extension of support to armed revolts against non-Communist governments. Peiping will remain determined to obtain control of Taiwan, but will almost certainly not attempt to seize Taiwan by force so long as the US is committed to its defense. (Paras. 59–60, 62, 64)

[Here follow five pages of the text of NIE 13–57, which begins with a discussion of political and economic developments in the People’s Republic of China.]

30. Major Economic Problems. In view of the difficulties of increasing the amount of land under cultivation, the regime’s success in increasing agricultural production will depend largely on its ability to raise yields. The quality of the soil and the supply of water are adequate to support a substantial increase in output per acre, provided a heavy investment is made in fertilizers and irrigation. However, we believe the total investment in agriculture included in the Second Five Year Plan (1958–1962) is inadequate for achieving the agricultural goals. State investment is largely limited to some large scale flood control and irrigation projects. The bulk of the investment, which will be for local projects, is to be provided by the collectives from their own production, over and above their contribution to the national budget.

31. Whether the collectives will fulfill their goals will depend in part on the peasants’ reaction to collectivization. During the first year of full scale collectivization (1956), peasant reaction was not unduly adverse, probably because of the prospects for a good crop year. We believe a continuation of this attitude will depend largely on whether the regime is able and willing to permit some increase in the real earnings of the peasants. The prospect for a rising peasant income will rest on the regime’s decisions regarding total national expenditure and investments, and on the weather. We believe that the regime, recognizing this problem of peasant incentive/will probably make some concessions to the peasants, and cadres have already been instructed to limit the investment, welfare, and reserve fund allocations from the income of the collectives in order to maximize direct payments to the peasants. This situation will tend to limit the additional resources for investment which the regime can hope to mobilize through its collectivization program, and in addition will render the program vulnerable in the event farm output fails to increase.

32. Even with adequate progress in capital formation, the regime will still have the continuing problems of planning and of proper allocation of investment. As the industrial sector becomes integrated, orderly progress will depend on timely, realistic, and accurate planning which avoids mistakes such as those which in 1956 resulted in shortages of cement and steel, shortfalls in petroleum production, low quality of output in many industries, and shortages of commodities for export. The planners must also act to end the serious congestions and delays which have occurred on various sections of the railroads.³

33. The shortage of trained personnel will continue to be another problem of major proportions. The increase in investment, the projected completion of new plants, and the progressive integration of industry, are certain to accelerate the requirements for trained personnel in industry. In particular, the Communists admit that the development of necessary skills is the critical factor in the establishment and expansion of such industries as chemical, telecommunications equipment, and precision machinery. During the Second Five Year Plan period the educational system will find it difficult to provide both for its own expansion and for the needs for trained personnel in industry and agriculture. Moreover, the shortage of scientific manpower will continue and scientific research and development will remain limited.

34. There will also be the problem of satisfying the increasing requirements for essential imports of machinery and other commodities. Further increases in production in almost all industries will depend upon installations of new productive capacity, much of which is to be furnished by the Soviet Bloc, but some of which will come from the West. During the period of this estimate, the Chinese Communist ability to import will be adversely affected if, as it now appears, the Soviet Union extends no further credits. It will also be adversely affected by the need to repay outstanding Soviet credits and by the extension of grants and credits to Asian Communist and non-Communist countries. Exports will therefore have to be increased even more than imports, which will be difficult in view of present problems in squeezing out agricultural goods for export. Moreover, developments within the Soviet Union and the European Satellites may have an important adverse impact on the volume of imports from the Bloc and the timing of their arrival. Delay or curtailment of scheduled installations as a result of stresses within the Bloc could have a seriously depressing effect upon the Chinese Communist rate of industrial growth. However, if Western trade controls were relaxed the regime’s dependence on the Bloc would be reduced and its import problems eased.⁴

35. There will also be the continuing drain on resources to maintain the large military establishment, which is scheduled to account for 13 percent of the budget during the Second Five Year Plan, as against 18 percent in the First Five Year Plan. In absolute terms, the plan provides that military expenditures will remain approximately at 1956 levels. Not only does military spending reduce the funds available for other purposes, but it also competes for commodities in short supply such as steel and trucks, and takes a large share of the earnings from exports to finance military imports.

36. Prospects. We believe that many of the targets of the Second Five Year Plan, as it now stands, are unrealistic and cannot be achieved. It is likely that the regime, which appears to recognize this situation, will reduce some of the goals. However, despite the existence of the difficult problems discussed above, the Chinese Communists have demonstrated an ability to cope with similar problems in the past, have achieved considerable momentum, have further strengthened their control mechanism, and will probably continue to make progress.

37. Barring a series of natural disasters or the outbreak of war in the Far East, we believe that the gross national product will increase at an annual rate of six to seven percent during the period 1956–1962, as compared with an annual rate of increase of approximately seven to eight percent during the period 1952–1957. This increase will result in a total increase in GNP of 35–40 percent during the period 1958–1962 as compared with the 45 percent envisaged in the proposal for the Second Five Year Plan announced in September 1956. Agricultural output will probably increase at an average annual rate of about three percent rather than the planned rate of six percent. Since the regime will have to compensate for the shortfall in agriculture, the Chinese people, especially the peasants, will be placed under heavy strain. However, it is not likely that the regime during the five year period will push the investment program to the extent that no increase in per capita consumption is possible, although they may do so for short periods to make up for temporary setbacks.

The Military Establishment⁵

38. The Chinese Communist regime has placed great emphasis upon maintaining and developing its armed forces as a basic aspect of national power. With Soviet assistance, it has become by far the strongest Asian military power. The ground forces of the People’s Liberation Army total 2,500,000, many of whom are battle tested and most of whom are fairly well trained. The air arm, including naval aviation, is estimated to have 395 jet light bombers and 1,475 jet fighters. The naval forces include four destroyers and 13 submarines, with additional units under construction, and an estimated 315 aircraft. Of the latter, 160 are jet light bombers and 30 are jet fighters.

39. The armed forces probably will not increase their personnel strength in the next few years, but the power of these forces will grow as the ground force and the air arm are more completely equipped with improved weapons, and as the navy completes or acquires additional submarines and large patrol vessels. Communist China will remain dependent on the USSR for most major items of military equipment and a large part of its POL supplies during the period of this estimate.

II. Communist China Within the Communist World

40. The position of the Chinese Communists in the Communist world has been greatly enhanced as a result of developments since the death of Stalin and particularly because of the prominent role they have played in Bloc affairs in the past year. Communist China’s initial reaction to Soviet criticism of Stalin was one of aloofness and noninvolvement, with Peiping taking care to point out Stalin’s “strong points” as well as his “weaknesses.” However, as a result of the Polish and Hungarian crises, Peiping has become increasingly involved in Eastern European affairs. It has asserted the necessity for each Communist country to develop with due regard to its own political and social backgrounds, has pointed out that no one Communist country is entitled to adopt an attitude of superiority over other Communist countries, and probably has favored a more flexible approach in Soviet relations with the Satellites. Communist China has so far not joined in Soviet criticism of the Polish press and there is some evidence of Sino-Soviet differences on Poland. On the other hand, it supported the Soviet use of force in Hungary and has insisted that the first duty of all Communist countries is loyalty to international proletarian solidarity under the leadership of the Soviet Union.

41. The tone of authority in the Chinese Communist statements and the need apparently felt by the Kremlin for Chinese support on Eastern European issues have made a deep impression on the Communist world, and have further weakened the concept that Moscow is the only authoritative interpreter of Communist ideological guidance. The actions of the Chinese Communists would appear to suggest an awareness of the need for some concessions to nationalism in the interests of Bloc solidarity.

42. The Chinese Communists, in many cases, are the channel through which Asian Communist parties receive guidance, although most of these parties probably look to the Soviet Union for leadership. The Chinese Communists exercise substantial influence in North Vietnan and North Korea. Communist China has extended a credit of $320 million to each of these countries, continues to maintain large forces in North Korea, and is the principal supplier of military assistance for North Vietnam. Communist China is developing influence in Outer Mongolia, which until recently was an exclusive preserve of the USSR. In 1956, the Chinese Communists extended a $40 million credit over a four year period to assist the Mongolians in the construction of light industrial facilities, and supplied a large number of technicians.

43. During the period of this estimate, Peiping will probably further increase its influence within the Communist Bloc and have an important voice in matters affecting the Bloc as a whole. However, Communist China will continue to rely on the USSR and the Communist Bloc as the chief source of the imports, aid, and technical assistance essential to its military and economic programs. In addition, Peiping will almost certainly continue to rely on Soviet military guarantees as its chief insurance against what it regards as the danger of US attack. Although it is probable that some conflicts of interest and disagreements will develop between Moscow and Peiping, it is highly unlikely that either will permit such conflicts to impair Sino-Soviet solidarity.

III. Communist China’s Relations With The Non-Communist World

44. Communist China’s influence has increased markedly in the non-Communist world, and its presence is especially felt in Asia. It has formal diplomatic ties with less than one-third of the countries of the world, but these include India, Burma, Indonesia, Ceylon, and Pakistan. There is a growing pressure for normalization of relations with Communist China, especially in Japan, in Western Europe, and in the British Commonwealth. US influence has been the major factor in preventing a much greater number from recognizing Communist China and agreeing to its admission to the UN.⁶

45. Communist China has broadened its contacts, even with those countries with which it does not have diplomatic relations. It has expanded trade with many countries in the non-Communist world and has regularly participated in trade fairs. There has been a steady increase in the exchange of official and unofficial delegations and Chinese Communists have frequently cultivated specific targets such as professional, intellectual, and religious groups and offered them free tours to mainland China.

46. In order to promote trade ties with underdeveloped countries, Communist China has in several cases selected items for trade because of their political impact. For example, despite a shortage of steel in Communist China, 37,000 tons were exported to Egypt in the first half of 1956. Other examples have been the rice-for-rubber deal with Ceylon, the Sino-Burma trade agreement, and the suggestions to Japan that large amounts of coal and iron ore would be available in exchange for machinery and steel.

47. The Chinese Communists have also used economic assistance to gain influence. The Sino-Cambodia aid agreement, which was signed in June 1956, provides for a grant-in-aid of about $22.4 million during 1956 and 1957 in the form of technical assistance, construction materials, and merchandise. Both countries have stressed the “unconditional nature” of this aid. Under an agreement signed in October 1956, Nepal is to receive grants totaling approximately $12.6 million over a three year period. The Lao government has not yet acted on Chinese Communist offers of assistance.

48. The Chinese Communists have demonstrated interest in developing the Asian-African Bloc as an instrument to weaken Western economic and political influence in underdeveloped areas. At the 1955 Bandung Conference Chou En-lai took a leading part and actively supported the “Bandung spirit of peaceful coexistence.” This has since become one of the main slogans of Chinese Communist foreign policy, designed to convince non-Communist Asian nations of the peaceful intentions of Communist China and to facilitate an increase in Communist influence in these areas.

49. Emphasis on the “Bandung spirit of peaceful coexistence”, however, has not caused the Chinese Communists to cease their efforts to gain the allegiance of Overseas Chinese communities, or to abandon subversive activities in Southeast Asia. Moreover, the buildup of Chinese Communist military capabilities and occasional border incursions constitute a continuing pressure on neighboring countries.

50. Peiping is attempting to increase its influence, and eliminate that of Nationalist China, in the Overseas Chinese communities, especially those of Southeast Asia. It is attempting to obtain control of local Chinese schools, newspapers, organizations, and leaders, and is conducting a large scale propaganda campaign to revive interest in Chinese culture. In mainland China, preferential treatment has been promised to Overseas Chinese students and to relatives of Overseas Chinese. Although these efforts have resulted in some increase in Communist China’s influence among Overseas Chinese, the bulk of the latter still appear to be intent on improving their positions in their resident countries, and seek to avoid involvement in the struggle for their allegiance.

51. The Chinese Communists are giving covert support to indigenous Communist groups in Asia. This policy has been followed even in the neutralist countries despite its adverse effects on Chinese Communist relations with the governments concerned. In Burma, the government is concerned over the assistance given by the Chinese Communist Embassy to the local Communists. Many Indonesians, particularly in the army and the Moslem parties, are disturbed by the ties between the Indonesian Communist Party and Peiping. The Indian government is concerned by the probability that the Chinese Communists are giving assistance to the Communists in Nepal and the possibility that the Naga tribes have received arms from Communist China.

52. The Chinese Communists have continued to increase their military capabilities in the Taiwan Strait area, although Chinese Communist propaganda speaks almost exclusively of the intention to “liberate” Taiwan by “peaceful” means. Peiping has adopted a “moderate” attitude toward the Nationalists, offering potential defectors positions in the Peiping regime corresponding to those of ex-Nationalist collaborators in Communist China. Peiping propaganda directed toward Taiwan attempts to create the impression that the US is an unreliable ally for the National government and that the latter will inevitably collapse. Despite Peiping’s seemingly conciliatory attitude toward Taiwan, the Chinese Communists continue to reject categorically any suggestions for a compromise solution to the Taiwan problem involving “two Chinas”; they equally reject suggestions for a meaningful renunciation of force in the Taiwan area.

53. The attitude of Communist China toward the US continues to be one of hostility and mistrust and its policy is directed toward destroying the US position in the Far East. Peiping portrays the US as the chief threat to peace in Asia and the world and the source of most of the problems facing the countries of Asia. Nevertheless, the Chinese Communists have made some gestures to create the impression that current Communist “peace” tactics apply also to relations with the US. These gestures, however, appear to de directed not at improving relations with the US, but at undermining US policies and creating a belief, particularly in Asia, that a shift in the US attitude toward the Chinese Communists is imminent.

The Asian Impression of Communist China

54. The Chinese Communists have been able to create the impression in much of non-Communist Asia that Communist China is a dynamic, permanent, and perhaps not unfriendly world power, which will exert a major influence on the course of events in Asia. Many Asians are impressed by the effective control which the Chinese Communists exercise over the tremendous area and population of mainland China, by the sweeping socialization of the country, by the steady and substantial increases in military capability and industrial capacity, and by the growing ability of Communist China to trade with and to extend economic assistance to other countries.

55. These achievements are of particular significance to the people and leaders in many countries of non-Communist Asia because they too are seeking to make profound social and economic as well as political changes, and the Chinese Communist pattern appears in certain respects to offer a solution to many of their problems, which they are tempted to adopt. Many of the people and leaders in these countries are inclined to pay more attention to the apparent material progress in Communist China than to the methods by which it was attained.

56. Many Asians, in part because of their continuing distrust of Western intentions, have been impressed by Communist China’s anticolonialist propaganda and do not believe that the Chinese Communists intend to extend their control throughout Asia. Their receptivity to this propaganda is encouraged by the tendency in Asia to equate capitalism and private enterprise with colonialism. There is also a tendency among many Asians to accept the Communist charges that the US program of developing military pacts and bases is a colonialist policy which threatens the independence of Asian countries and increases the danger of war.

57. Although Communist China has been able to exploit Asian distrust of Western intentions, there is also an undercurrent of apprehension regarding Communist China’s real intentions. This apprehension has been caused by Communist China’s role in international Communism, particularly its connections with the support of indigenous Communist movements in individual Asian countries, and by mistrust in many Asian countries of historical Chinese expansionism. Peiping’s efforts to exploit the Overseas Chinese communities in most Southeast Asian countries have also created fears of its intentions, as have Communist China’s activities in border areas, and its support of recent Soviet repression in Hungary.

58. Asians realize that Communist China is now the strongest Asian military power, and that they are dependent upon the US for defense against a possible Communist attack. Because of their dislike of such dependence and their concern as to the effectiveness of US action in their defense, many prominent Asians, especially in South and Southeast countries, have come to believe that they should show discretion in some form of neutralism or at least a willingness to be friendly and to reciprocate Chinese Communist overtures, and finally, that if a trend toward Communist success should develop, they should not be the last to attempt some form of political accommodation. Many Asian leaders seem to have confidence that, even though they increase their political and economic contacts with Communist China, they will be able to resist attempts to encroach upon their political independence. These factors exist to some extent even in many of the countries aligned with the US. At the same time, even in non-aligned neutralist countries there is a widespread, though seldom publicly voiced, recognition of the importance of the US in restraining Communist China from overt aggression.

IV. Probable Chinese Communist External Courses of Action

59. The Chinese Communists, in their approach to international problems, will probably endeavor to appear conciliatory and flexible, but joint Sino-Soviet policy will in fact permit no major concessions to the West on basic issues such as Taiwan or the status of North Korea and North Vietnam. Communist China will continue to encourage the neutralist, anticolonialist, and nationalist sentiments in Asia and will continue its efforts to discredit US actions and motives and to seek a reduction in Western influence and military power in Asia. It will encourage wherever possible the formation of governments in which the Communist influence could be expanded. Communist China will almost certainly increase its official and unofficial contacts with the governments and people in non-Communist Asia, and will probably continue to increase trade with non-Communist countries, especially with Japan and other Asian countries. Peiping will also probably offer economic assistance to selected non-Communist countries and will propagandize the “nonpolitical” nature of such assistance. Peiping will continue its attempts to acquire influence over, and the support and allegiance of, the Chinese residing in non-Communist Asia. Peiping will continue to seek admission to the UN.

60. Despite a “soft” policy toward its Asian neighbors, Communist China will continue its subversive efforts, will probably apply pressure on a selective basis to remind the Asians of its power, and will take advantage of opportunities for Communist expansion, possibly including the extension of support to armed revolts against non-Communist governments. During the period of this estimate, Peiping will probably try to avoid courses of action which it believes would provoke US military intervention. However, the possibility cannot be excluded that the Chinese Communists will step up military action against the offshore islands, or will attempt to seize one of the smaller islands, to test US intentions and to increase external pressure on the US to bring about a Nationalist evacuation of these islands. If the Chinese Communists became convinced that the US would not assist in the defense of these islands with its own forces, they probably would attempt to seize them. Should the Communist regimes in North Vietnam or North Korea be subject to external attack the Chinese Communists would almost certainly give material support to the Communist regimes in these countries and would if necessary commit “volunteer” units to avoid a defeat. However, the Chinese Communists would probably seek to limit the area of conflict and to obtain a cease fire.

61. The US. Communist China recognizes that the US is the chief obstacle to its ambitions in Asia. Its efforts will almost certainly continue to be centered on neutralizing sources of US support, isolating the US from its allies, and, ultimately, destroying the US position in Asia. However, in its “peace” strategy, Peiping may make conciliatory gestures relating to peripheral questions in an effort to create the impression of reasonableness. Peiping will almost certainly continue to press for a meeting with the US at the foreign ministers’ level, and will exploit opportunities for other contacts that may present themselves.

62. Taiwan. Peiping remains determined to obtain control of Taiwan. However, the Peiping regime apparently recognizes that its military forces will not be able to seize Taiwan against US military opposition. In consequence, Peiping is attempting to reduce morale on Taiwan, in the hope that Nationalist leaders may ultimately be induced to negotiate with Peiping over Taiwan’s assimilation into Communist China. A major objective in any conference with the US would be to induce the removal of US military protection from Taiwan. The Chinese Communists will continue to improve their military capabilities in the area opposite Taiwan and the offshore islands, but they will almost certainly not attempt to seize Taiwan by force so long as the US is committed to its defense. (See paragraph 60.)

63. Korea. The Chinese Communists, in common with the USSR, hope to secure a withdrawal of UN forces from Korea and eventually to eliminate the ROK. As a means of putting pressure on the US to withdraw its troops, there may be additional withdrawals of Chinese Communist forces, but they will almost certainly maintain adequate forces in Manchuria to permit immediate reintervention. The Communists will almost certainly refuse any settlement in Korea which endangers Communist control of North Korea.

64. Japan. Communist China in conjunction with the Soviet Union will continue to seek to neutralize Japan and prevent its re-emergence as a major military and political power in Asia. It will attempt to weaken Japan’s links with the US by exploiting US-Japanese policy differences. The Chinese Communists will seek to increase the tolerance for Communism among the Socialists and other groups. They will probably also offer trade inducements, seeking both to increase Sino-Japanese trade and to induce Japan to break the CHINCOM embargoes. Communist China will also seek to increase significantly cultural and other semiofficial contacts with Japan, anticipating the establishment of formal diplomatic relations. These policies will contribute to the weakening of Japan’s willingness to support US policy toward Communist China.

65. Vietnam, Laos, and Cambodia. Peiping will continue to support the Vietnamese Communists in their efforts to extend Communist control to South Vietnam and will probably act in concert with Hanoi to expand Communist influence in Cambodia and Laos. Through pressure, subversion, and overt propaganda the two Communist regimes will attempt to discredit and undermine the authority of the Diem government. The Chinese Communists probably will not encourage North Vietnam to initiate open hostilities against Diem, but might encourage Hanoi to initiate guerrilla activities. In the event a weak government came to power in South Vietnam, Peiping might adopt a conciliatory approach in order to encourage a neutralist development. Toward Cambodia and Laos, the Chinese Communists will continue their gestures of friendship and goodwill and will probably not engage in overt hostile propaganda, at least so long as the authorities in these two governments reciprocate. Communist China will probably expand its relations with both countries and formal diplomatic relations are likely to be established.

66. Pakistan, Thailand, and the Philippines. Although Chinese Communist efforts have thus far concentrated on the uncommitted nations, the coming years are likely to see greater emphasis on the states allied with the West, including Pakistan, Thailand, and the Philippines as the Asian members of SEATO. Peiping will seek to exploit growing sentiment for trade with the mainland, will encourage “informal” contacts as an entering wedge, and will attempt to exacerbate political disputes within these countries over national policies concerning relations with the West.

67. Indonesia. The Chinese Communists probably estimate that the capabilities of the Indonesian Communist Party, the strongest indigenous Communist Party in non-Communist Asia, will continue to be maximized if they themselves maintain a friendly attitude toward the Indonesian government. The Chinese Communists will continue to give covert support to the Indonesian Communists.

68. Malaya and Singapore. Peiping will probably continue to encourage Malayan Communists to work for popular front governments, to extend control over Chinese youth and the labor movement, and, at the same time to maintain in being their guerrilla organization. Following the achievement of independence in Malaya (expected in August 1957) and self-government in Singapore, Peiping will seek to obtain recognition by these governments and will try to promote greater Chinese political influence in relation to the Malay population.

69. India. Although Communist China will seek eventually to supplant Indian influence in Asia, it will probably continue, at least for the next few years, to strengthen friendly relations with India and to encourage India’s efforts to bolster a neutralist sentiment throughout Asia and the Middle East. But this general approach will probably not cause the Chinese Communists to cease their efforts to increase their influence in the Indo-Tibetan border area.

70. Burma. Peiping will continue its efforts to woo the Burmese government while at the same time encouraging the Communist elements in the country. Communist China will probably be willing to agree to a settlement of the boundary dispute on terms that appear conciliatory but is unlikely to cease its subversive activities among the ethnic minorities in the border region.

71. Hong Kong and Macao. Communist China is committed to the ultimate incorporation of Hong Kong and Macao in its territory although this has not been stated as explicitly as in the case of Taiwan. However, for the period of this estimate the Chinese Communists will probably not attempt to seize these colonies by force. Non-Communist Hong Kong and Macao have a certain utility to Peiping as points of contact with the West; furthermore, Peiping probably believes that an attack on Hong Kong at least would involve hostilities with the UK and possibly with the US as well. Nevertheless, during the period of this estimate, Communist China will attempt to exploit frictions which arise over Hong Kong and Macao. Peiping will almost certainly continue unabated its campaign through outright subversion and “peaceful penetration” to increase its political and economic influence in Hong Kong and Macao, to reduce the effectiveness of these areas as Western listening posts, and to undermine the resolve of the UK and Portugal to maintain their positions.

1. Source: Department of State, INR–NIE Files. Secret. NIE 13–57 superseded NIE 13–56, “Chinese Communist Capabilities and Probable Courses of Action Through I960”, January 5, 1956. See Document 126. Two maps showing the distribution of railroads and military airbases on mainland China are not reproduced.
2. According to a note on the cover sheet, “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, and The Joint Staff”. All members of the Intelligence Advisory Committee concurred in this estimate on March 19, 1957, except for the Atomic Energy Commission representative and the Assistant Director, Federal Bureau of Investigation, who abstained because the subject was outside of their jurisdiction.
3. See paragraphs 16–25, Appendix A, for a discussion of transportation. [Footnote in the source text. All the appendixes and tables cited in the document are attached but not printed. Appendix A is entitled “The Economy of Communist China.”]
4. Trade controls are discussed in paragraphs 23 and 24 of Appendix A. [Footnote in the source text.]
5. See Appendix B for a more complete discussion of the Chinese Communist military establishment. [Footnote in the source text.]
6. See Appendix C: Countries recognizing Communist China. [Footnote in the source text.]