292. National Intelligence Estimate0

NIE 13–59

COMMUNIST CHINA

[Here follows a table of contents.]

The Problem

To analyze Chinese Communist domestic developments and external relations, and to estimate probable trends during the next five years.

Conclusions

1.
In this, its tenth year of power, the Chinese Communist regime exercises firm control over mainland China, the country’s economy is rapidly expanding, and Communist China’s weight in world affairs is on the increase. At the same time, its greatly accelerated domestic programs of the past year have brought it some of the greatest economic and social difficulties it has yet encountered. There is also growing awareness in Asia of the ruthless character of the Chinese Communist regime and the aggressive designs of its foreign policy. Such problems will make the [Page 578] next five years rough ones indeed for Communist China. However, we believe that the regime will be able to cope with its domestic problems and that the power of Communist China will increase considerably in the next five years. In spite of Communist China’s achievements, however, its national power will remain far less than that of the US or the USSR.
2.
Although production increases in 1958 were far less than Peiping’s extravagant claims, impressive gains in economic output were achieved. We believe that a record increase of about 20 percent was achieved in Gross National Product (GNP) in 1958, with industrial output rising about 40 percent, and agricultural output about 15 percent (due in part to unusually favorable weather). However, these production records were achieved at considerable economic and human cost, [less than 1 line of 2-column source text not declassified]
3.
In attempting to achieve continued sizable production increases over the next five years, the regime will encounter serious problems with respect to incentives, dislocations in production and transportation, faulty statistical data, and ideological pressures. Nevertheless, we believe that Communist China will be able to increase its GNP by about 12 to 15 percent in 1959, and about 7 to 10 percent in each of the three succeeding years, 1960–1962. These increases will probably result in a total increase in GNP of between 65 and 85 percent for the Second Five-Year Plan period (1958–1962). The annual growth rate for industry will probably average about 50 percent higher than the remarkable 16 percent rate achieved in 1953–1957. The most dramatic increases in output over the next five years will probably be in basic industrial commodities; for example, Communist China may be able to raise production of crude steel, commercially usable though not fully up to Western standards, to about 20–25 million tons in 1962. [less than 1 line of 2-column source text not declassified]
4.
Agricultural production, on the other hand, will probably not increase dramatically during the period of the estimate. The 15 percent increase achieved in 1958 is unlikely to be repeated. Total increase over the full Five-Year Plan period (1958–1962) will probably be between 20 and 30 percent. Such an increase will probably be adequate to sustain economic expansion, but will not permit significant increases in consumption, [less than 1 line of 2-column source text not declassified]
5.
The commune system has provided the regime with a more effective means of mobilizing and directing Communist China’s vast labor potential. However, the regime will face serious difficulties over the next five years in attempting to establish the commune as the basic unit of Chinese Communist society. It is inescapable that the commune program has generated extensive bitterness toward the regime. This bitterness, together with economic dislocations, has already led the regime to modify [Page 579] certain of the more extreme features of the communes. We believe that Peiping will continue the communal program, introducing modifications as they become economically or politically necessary. The ceaseless pressures on the people will probably result in a populace that for the most part is no better than grudgingly acquiescent. However, given the regime’s flexibility and controls, it is unlikely that popular resistance will reach the point where the regime will have to choose between a blood bath or an abandonment of the communal experiment, [less than 1 line of 2-column source text not declassified]
6.
We believe that Mao Tse-tung will continue to be the dominant figure in Communist China, even though there are indications that the party’s unique cohesion of the past quarter of a century has begun to feel the erosion of time. The selection of Liu Shao-ch’i as Mao’s successor as government Chairman is probably designed to confirm him as Mao’s heir to party leadership as well. In the event of Mao’s death or incapacitation, an initial transfer of power to Liu would probably occur without challenge, but the party’s effectiveness, vigor, and its prestige within the Communist world might decline, [less than 1 line of 2-column source text not declassified]
7.
There will be a substantial growth in Communist China’s capability to assemble or produce complex military equipment over the next five years. However, Communist China probably will not have developed a significant native guided missile program during the period of this estimate. The USSR will probably provide, or help the Chinese Communists to produce, relatively unsophisticated missiles. Within the period of this estimate, Chinese Communist forces will probably have one or more of the following types of missiles of Soviet design: surface-to-air, air-to-air, air-to-surface, short-range surface-to-surface. Communist China has probably initiated a nuclear weapons development program, but will almost certainly not have developed a nuclear weapons production capability of its own by 1963.1 [less than 1 line of 2-column source text not declassified]
8.
We believe that Soviet and Chinese Communist interests with respect to nuclear weapons are in some degree incompatible. The USSR is almost certainly reluctant to see the Chinese Communists acquire nuclear weapons under their own control. For its part, Communist China almost certainly wants nuclear weapons and recognizes that its chances of developing a production capability would be seriously impaired if a test ban agreement should be reached. There is no reliable evidence regarding the presence of nuclear weapons in Communist China. We believe it highly unlikely that the Soviets have transferred nuclear weapons to Chinese Communist control. It is possible, however, that they have [Page 580] provided the Chinese Communists with some surface-to-surface missiles—adaptable to nuclear use and of sufficient range to reach Taiwan. [10-½ lines of 2-column source text not declassified]
9.
The Sino-Soviet alliance will almost certainly remain firmly united against the West during the period of this estimate, with the USSR retaining its senior position in that alliance. As Communist China grows in strength and stature, however, it will probably exert an increasing influence on general Bloc policy and Communist ideology, and the reconciliation of Sino-Soviet interests will probably become increasingly difficult. In particular, differences of view will probably arise with respect to nuclear weapons, attitudes and tactics toward the West, and patterns of economic and social development. We also believe that, while Moscow welcomes Communist China’s increasing contribution to Bloc strength, it will become increasingly concerned over the long-range implications of Communist China’s growing power. Nevertheless, both partners will undoubtedly recognize that their problems are the inevitable consequence of the alliance itself, and that there is no feasible alternative to maintaining it in essentially its present form. Over the next five years, therefore, the main effect of these differences will be an increasing need for the two countries to make accommodations to each other in policy matters, not a weakening of the alliance itself, [less than 1 line of 2-column source text not declassified]
10.
The aggressiveness which the Chinese Communist regime has displayed in domestic programs, in the Tibetan situation, and in foreign policy has caused increased apprehension throughout Asia of Communist China’s strength and intentions. Despite the foreign policy setbacks the Chinese Communists have suffered during the past year, they probably view the future with considerable confidence and optimism. We believe that there will continue to be frequent manifestations of Chinese Communist truculence and of an impatience to emerge as an acknowledged major power. World pressures will increase for Communist China’s admission into the UN and into other international organizations. The Chinese Communists will probably seek to gain their objectives principally by political and subversive means. They will also continue their trade and aid offensive, but this effort will probably remain restricted and selective because of economic limitations. However, the emphasis on nonmilitary means will not preclude the use of force to exploit some target of opportunity or to respond to some situation which they might interpret as a serious threat to their position in Asia, [less than 1 line of 2-column source text not declassified]
11.
The Chinese Communists will almost certainly not let the situation in the Taiwan Strait area remain quiescent indefinitely. An invasion of the major offshore islands is unlikely, at least during the next year or so, unless Peiping comes to believe that US determination to help the [Page 581] Government of the Republic of China (GRC) defend the islands has weakened. The Chinese Communists will probably continue sporadic military pressures in the area, such as shellings and occasional naval and air sorties. The chances of some kind of major military probings in the Taiwan Strait area to test US intentions will increase as time passes. An attack against one or more of the smaller Nationalist-held islands is possible at any time, [less than 1 line of 2-column source text not declassified]

[Here follow 47-1/2 pages of source text scheduled for inclusion in the Supplement but not declassified.]

  1. Source: Department of State, INRNIE Files. Secret. A note on the cover sheet reads in part 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 United States Intelligence Board on 28 July 1959.”

  2. [Footnote in the source text (6–1/2 lines of 2-column source text) not declassified.]