Foreign Relations of the United States, 1961–1963, Volume XXII, Northeast Asia

107. National Intelligence Estimate⁰

Washington, May 2, 1962.

NIE 13-4/1-62, June 29, not printed, supplemented NIE 13-4-62 with more extended discussion and supporting information concerning economic, military, and internal security matters. (Ibid.)

NIE 13-4-62

PROSPECTS FOR COMMUNIST CHINA

The Problem

To estimate the prospects for Communist China over the next several years with emphasis on the viability of the regime and trends in its foreign policy.

Conclusions

1. The future course of events in Communist China will be shaped largely by three highly unpredictable variables: the wisdom and realism of the leadership, the level of agricultural output, and the nature and extent of foreign economic relations. During the past few years all three variables have worked against China. In 1958 the leadership adopted a series of ill-conceived and extremist economic and social programs; in 1959 there occurred the first of three years of bad crop weather; and in 1960 Soviet economic and technical cooperation was largely suspended. The combination of these three factors has brought economic chaos to the country. Malnutrition is widespread, foreign trade is down, and industrial production and development have dropped sharply. No quick recovery from the regime’s economic troubles is in sight. (Paras. 5-14)

2. Economic disasters have brought widespread disillusionment and disaffection in their wake, but we believe that widespread organized resistance to the regime is unlikely to develop. In any case, the regime’s monopoly on arms, organization, and communications is probably sufficient to crush any incipient uprising. Communist China’s armed forces have experienced setbacks in their modernization program and logistical capabilities, but, although there has been some decline in morale, they will probably remain loyal to the regime. We believe that by the end of the decade the Chinese Communists will have a limited nuclear weapons and missile capability.¹ (Paras. 21-24)

3. We believe that over the next few years Communist China will follow relatively conservative and rational policies of the kind recently instituted, that the odds favor improved crop weather, and that increased trade with Western Europe and Japan will partially compensate for the severe reduction in Soviet economic and technical cooperation. We therefore believe that the most likely prospect is for slow recovery and a gradual resumption of economic growth. However, there is also a possibility that the economic depression will continue, bringing increasing problems for the regime, and there is a slimmer possibility of fairly rapid recovery and economic expansion. In any case, over the longer run, given communism’s demonstrated inefficiency in agriculture, it is possible that the regime will founder on a failure to solve China’s chronic food problem. (Paras. 15-20)

4. We believe that the US will continue to face a hostile Communist China which will be constantly probing for weaknesses, trying to push the US out of the Western Pacific, and causing trouble wherever else it can. Meanwhile China will probably continue to promote the image of being a strong but peaceful nation, while covertly providing tactical guidance and material aid, to the extent of its capabilities, to leftist revolutionary movements in Asia, Africa, and Latin America. Outside the Far East these capabilities are limited by China’s poverty, relative international isolation, and difficulties with the USSR. Communist China almost certainly does not intend to attempt the open military conquest of any Far Eastern country during the period of this estimate, although it would almost certainly be willing to take military action to defend Communist interests in North Vietnam and North Korea and, probably in Laos. (Paras. 26-35)

[Here follow paragraphs 5-35, comprising the Discussion portion of the estimate, in two sections, headed “Introduction” and “Prospects,” and a map entitled “Communist China.”]

0. Source: Department of State, INR/EAP Files: Lot 90 D 110, NIE 13-4-62. Secret. According to a note on the cover sheet, the Central Intelligence Agency and intelligence organizations of the Departments of State, Defense, the Army, the Navy, and the Air Force and the Joint Staff participated in the preparation of this estimate. All members of the USIB concurred with this estimate on May 2 except the representatives of the AEC and the FBI, who abstained on the grounds that the subject was outside their jurisdiction.
1. See NIE 13-2-62, “Chinese Communist Advanced Weapons Capabilities,” dated 25 April 1962. The Assistant Chief of Naval Operations (Intelligence), Department of the Navy, believes that a reliable estimate of the Chinese Communist program in the development of nuclear weapons cannot yet be made. His footnote to paragraph 38 of NIE 13-2-62 contains the rationale for his position. [Footnote in the source text. NIE 13-2-62 is ibid.,INR/EAP Files: Lot 90 D 99. See Foreign Relations, 1961–1963, volume VIII, p. 274, for a summary.]