Foreign Relations of the United States, 1958–1960, China, Volume XIX

13. National Intelligence Estimate⁰

NIE 13–58

Washington, May 13, 1958.

COMMUNIST CHINA

[Here follows a table of contents.]

The Problem

To analyze Chinese Communist domestic developments and external relations during the period of the First Five Year Plan (1953–1957), and to estimate probable trends during the next five years.

Conclusions

1. We believe that the Chinese Communist ability to exercise firm and effective control of mainland China will continue. The leadership of the party continues to demonstrate cohesion and determination and, at the same time, a considerable degree of flexibility. It is supported by a party membership of about 13 million and controls a large and efficient military and public security apparatus. We believe that the death or incapacitation of Mao Tse-tung would not endanger the regime’s control of the country, although it might complicate the achieving of some objectives and reduce the party’s policy flexibility, [less than 1 line of 2-column source text not declassified]

2. The regime apparently has made considerable progress in its efforts to recast the traditional structure of Chinese society in the Communist mold. It has collectivized almost all the peasants and has virtually eliminated private ownership in industry and commerce. Although the Chinese people have viewed with favor some of the regime’s achievements, the regime’s stringent curtailment of consumption and the constant pressures to conform and to work harder have provoked much dissatisfaction and disillusionment, especially among the peasants. The party’s experiments during the past two years to gain wider popular support by admitting problems and encouraging their discussion—the “letting 100 flowers bloom and diverse thoughts contend” program—has been sharply cut back, [less than 1 line of 2-column source text not declassified]

3. In its efforts to elicit a more positive popular response, the regime, because of its determination to achieve rapid industrialization, will have little to offer in the way of material inducements. Dissatisfactions and occasional popular outbursts will continue, especially among the peasantry and certain minority groups, but we believe the net effect on the regime’s programs will be no more than a complicating or retarding one. Most Chinese, conscious of the regime’s power and seeing no alternative, will probably continue to acquiesce in Communist rule, [less than 1 line of 2-column source text not declassified]

4. The Chinese Communists achieved a high rate of economic growth during their First Five Year Plan (1953–57), demonstrating their capability to marshal resources for investment despite the backward nature of the economy. A vital factor in their economic program was the assistance rendered by the USSR in expanded trade, credits, and technical aid. Starting from a very small base, the average annual rate of growth of industrial output was about 16 percent, but industrial output at the end of 1957 was still small compared to the industrial output of Japan or the UK. Agricultural output was adequate to meet basic needs, but its expansion fell far short of that in other sectors of the economy, [less than 1 line of 2-column source text not declassified]

5. During the next five years, the regime will have to cope with difficult economic problems stemming from the forced pace of industrial development. However, the basic problem will continue to be the race between population growth and food production. The Chinese population is now probably about 640 million and increasing at about 2.0–2.5 percent per year; agricultural output during the next five years will, at best, probably not exceed the 3 percent per annum increase achieved during the First Five Year Plan. In the event of a series of bad crop years and of widespread lack of cooperation among the peasants, the regime would face grave difficulties. However, even in these circumstances, the regime, because of its control apparatus, probably could maintain itself in power and, at the same time, maintain industrial growth, although at a reduced rate, [less than 1 line of 2-column source text not declassified]

6. We believe that Communist China during the next five years will probably be able to maintain a rate of economic growth roughly comparable to that of the past five years. By 1962 its Gross National Product will probably be on the order of US $65–67 billion, as compared with US $46 billion in 1957. The contribution of the industrial sector will probably have increased to about 26 percent, as compared to about 19 percent in 1957. [less than 1 line of 2-column source text not declassified]

7. Communist China’s military power in the Far East will bulk even larger by 1962 than it does at present. The army will probably be somewhat smaller, but it will be better equipped and more mobile. The air force and navy will have increased in size and effectiveness. The Chinese Communist armament industry, with Soviet technological assistance, will probably be able to meet most, if not all, army requirements for small arms, artillery, transport, and ammunition. Shipbuilding and aircraft production will probably have increased considerably. Nevertheless, Communist China will still be dependent on the USSR for heavy and complex military equipment and for many components, [less than 1 line of 2-column source text not declassified]

8. Although Communist China will almost certainly not have developed a missile or nuclear weapons production capability of its own by 1962, we believe that the Chinese Communists will press the USSR for such advanced weapons. [13-1/2 lines of 2-column source text not declassified]

9. Communist China will almost certainly remain firmly aligned with the USSR. Peiping will continue to acknowledge Moscow as the leader of world Communism, but as Communist China grows in strength and stature, it will probably play an increasingly important role in the formulation of general Bloc policy. Although there will almost certainly be some frictions, these are unlikely to impair Sino-Soviet cooperation during the period of this estimate, [less than 1 line of 2-column source text not declassified]

10. In its efforts to reduce and eliminate Western influence in Asia, Communist China will probably proceed primarily by non-military means. Its foreign policy will probably display more initiative and assertiveness, while continuing to emphasize coexistence and a readiness to increase economic and political relations with other states. Without compromising its stand on basic issues, Communist China will continue to portray itself as willing to reach a rapprochement with the US. At the same time, the Chinese Communists will almost certainly continue their subversive efforts throughout the Far East. They will almost certainly continue their efforts to undermine the will of the Nationalists on Taiwan, and to discredit them internationally. They will probably not resort to overt military aggression as long as they believe it would involve them in military action with the US. Although their attitude towards the Offshore Islands may become more aggressive, a decision to initiate military action to seize these Islands would probably be contingent on an estimate that the US would not intervene militarily, [less than 1 line of 2-column source text not declassified]

11. Japan will continue to be one of Peiping’s most important targets, especially because there is a growing area of competition between Communist China and Japan. Peiping will continue to seek to reduce conservative strength and US influence in Japan by exploiting Japanese fears of becoming involved in a nuclear war, any areas of friction with the US, and Japan’s eagerness to expand trade with mainland China. In pursuit of these objectives, Communist China will continue to employ both conciliatory and tough tactics. Trade between Communist China and Japan will probably increase, and Peiping will probably be able to gain at least quasi-diplomatic status for a trade mission in Japan, [less than 1 line of 2-column source text not declassified]

12. Assuming a general continuance of present Bloc and Western policies, we believe that intercourse between Communist China and the Free World will increase considerably during the next five years. This trend will probably involve added diplomatic recognition of Peiping by a number of states, but will occur whether or not formal diplomatic ties are established. It will also involve greater difficulty in excluding Communist China from the UN. [less than 1 line of 2-column source text not declassified]

13. If Communist China continues its present international policy, we believe that its prestige in Asia will continue to grow during the next five years. This will occur whether or not additional countries recognize Communist China, or it is admitted to the UN. But it does not necessarily follow that as a result of increased prestige the Chinese Communists will be able to induce non-Communist Asian countries to adopt internal or external policies desired by Communist China. Communist China’s future role in Asia will be determined to an important extent by developments in five fields, in varying degrees beyond the control of the Chinese Communists:

a. The course of events in the US-USSR relationship and in the broad aspects of the cold war.

b. Developments within the Bloc such as spectacular scientific achievements or major political upheavals.

c. The extent to which local Communist parties, e.g., those in Indonesia, Laos, and India, gain or lose political strength.

d. The extent to which the growth of Communist China’s power gives rise to increased apprehensions among Asian governments as to Communist China’s future intentions and thus causes them to take increasingly effective measures at least to counter their own internal Communists.

e. The extent to which the US has the confidence and trust of non-Communist Asian governments, and in turn helps these governments not only to resist the Communists, but also to meet their national aspirations, [less than 1 line of 2-column source text not declassified]

[Here follow 36-1/2 pages of source text originally scheduled for inclusion in the Supplement but not declassified, comprising the “Discussion” portion of the estimate, with an introduction and sections on economic and political developments during the period of the first 5-year plan, probable trends during the next 5 years, and Communist China’s external relations, [text not declassified].]

0. Source: Department of State, INR–NIE Files. Secret. A note on the cover sheet 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, and The Joint Staff.

   “Concurred in by the Intelligence Advisory Committee on 13 May 1958. Concurring were The Director of Intelligence and Research, Department of State; the Assistant Chief of Staff, Intelligence, Department of the Army; the Director of Naval Intelligence; the Assistant Chief of Staff, Intelligence, USAF; and the Deputy Director for Intelligence, The Joint Staff. The Atomic Energy Commission Representative to the IAC and the Assistant Director, Federal Bureau of Investigation, abstained, the subject being outside of their jurisdiction.”