Foreign Relations of the United States, 1964–1968, Volume XXX, China

161. Study Prepared by the Special State-Defense Study Group¹

Washington, June 1966.

COMMUNIST CHINA: LONG RANGE STUDY

[Here follow a foreword, table of contents, and introduction.]

Abstract

A. The Problem

The essence of the problem which Communist China poses for the United States may be stated very simply: The Chinese regime’s objectives of regional hegemony and world revolution clash with our own fundamental interests in preventing domination of Asia by any single power and in developing a peaceful and open world society of free nations.

The Chinese must overcome formidable external obstacles and serious domestic deficiencies if they are ever to reach their ambitious goals. Nevertheless, the weakness of most of the nations East and South of China, China’s own size and revolutionary dynamism, and her growing military power combine to make her a major source of difficulty for us in the present period.

B. Broad Strategic Choices for the U.S.

In seeking to cope with the problem which China poses for us, we must choose among three broad national strategies; disengagement, containment and showdown.

The first and last of these possible strategies possess disadvantages which clearly exceed their advantages:

• —In the absence of a stable, advantageous balance of power in Asia—or even the prospect of such a balance in the foreseeable future—disengagement would not only be a betrayal of those Asians who have relied upon our support and protection, but would in fairly short order ensure domination of much of Asia by a single hostile power.
• —Seeking an early showdown is not, given the pride and intransigence of the Chinese people and their leaders, a feasible means of bringing about a desired change in Chinese policy, but would lead to a war which would impose on us uncertain, but probably large, costs in blood, treasure and prestige for highly uncertain gains.

Having excluded both extremes, we are left with a national strategy of seeking concurrently to check the spread of Chinese Communist power and influence and to induce moderation of Peking’s current expansionist policies. As will be brought out later, this strategy of containment must be applied differently in the different sectors of China’s periphery. In all areas, however, containment is not a negative defensive strategy, but requires the dynamic and imaginative application of a wide variety of political, military, economic and psychological measures.

Before considering how a containment strategy should be applied, it is necessary to ask how possible developments in mainland China and surrounding areas may either facilitate or interfere with that strategy’s success. For purposes of this Abstract, we will concentrate on a mainstream projection of future possibilities and ignore the contingencies which are set forth in Chapters II and III.

C. Possible Developments Within Communist China

Peking is today in the twilight of the regime’s revolutionary age. How the new day which will dawn after Mao’s passing will differ from the one that is now fading, no one can now say, but sooner or later important changes will occur.

All of the apparent contenders to succeed to Mao’s power appear to belong to his school of hard-line, doctrinaire Communism. They were all steeled in the long struggle for power against overwhelming odds, followed by more years of stubborn effort to remake the most populous nation on earth. But even among this group of old revolutionaries, as current evidence suggests, recent failures at home and abroad may have caused differences on basic policy issues. Certainly the pressures for a policy reappraisal must already exist and may grow after Mao’s death.

Outstanding among the sources of such pressures is the continued indifferent performance of the economy and the prospect that its future performance will be little, if any, better. Chinese economic growth is weighed down by the failure of the regime thus far to solve the problem of expanding agricultural output faster than population. If, as appears to be the most likely of various possibilities, the agricultural sector and population both grow by about two percent annually over the coming decade, the economy as a whole will probably not be able to expand output by more than about 3–1/2 percent annually. More rapid growth would require greater support from agriculture in the form of industrial raw materials, food for urban workers and export earnings to pay for imports of machinery and technology.

Even the modest over-all rate of growth projected above will require the recapture and investment of a substantial fraction of increases in the national product. As a consequence, per capita consumption may rise very little, if at all, and consumption levels in the country-side may actually be forced down to permit the rise in urban consumption associated with continuing industrialization. The regime may therefore be caught in a vicious circle. Increased agricultural output requires greatly expanded supplies of chemical fertilizers and probably also added material incentives. Neither can be provided in sufficient measure at existing levels of production.

This circle might be broken if industry could perform substantially better despite the constraints imposed by the slow pace of agriculture. The main difficulty here is in the heavy commitment of scarce engineering and scientific manpower to military production programs, particularly the advanced weapons program. Because military programs have top priority, non-military industry suffers and the industrial sector is unable to produce (or to pay for the import of) incentive goods and chemical fertilizer in the quantities that would give agriculture the needed boost.

Prolonged semi-failure in the economic field cannot but have adverse effects on the morale of the cadres and on the people’s responsiveness to exhortations for continued effort. Nevertheless, there is no reason to expect a fatal weakening of the regime’s well-organized system of control, much less the appearance of effective organized dissidence. The new generation may, as Mao fears, be lacking in revolutionary zeal, but it will also probably accept conformity to political orthodoxy as the inevitable condition of survival in a totalitarian society.

Despite serious economic constraints and a probable decline of elan among cadres at all levels, the regime should be able to carry out a limited number of military programs over the next ten years. The ground forces will probably remain at about their present size, but will be given more modern equipment. The air force will be strengthened by domestic production of substantial numbers of jet fighters, a smaller number of jet medium bombers, and possibly some jet transports. The principal additions to the navy will be in the form of fast patrol craft and submarines, probably including several capable of firing ballistic missiles with a range of about 350 nautical miles.

The most significant advance over the next decade will be in the field of nuclear weaponry. By the mid-1970s, Communist China may have deployed as many as 60 MRBMs and a few ICBMs, possibly with thermonuclear warheads. The Chinese may thus possess a significant and growing regional strategic capability and the beginnings of a counter-deterrent force targeted against the continental United States.

In external relations, Peking will continue to avoid actions involving a high risk of a direct military clash with either the U.S. or the USSR, but will probably continue to pursue policies inimical to the interests of both great powers. Even after Mao, the Chinese leaders may be expected to continue trying to subvert the USSR’s leadership of the international Communist movement and to oppose “U.S. imperialism” on many fronts. Peking will also continue efforts to expand its influence beyond its borders by a combination of means emphasizing subversion, diplomatic maneuver and, when possible, support of “wars of national liberation.”

However the current struggle in Vietnam comes out, Southeast Asia will continue to be an attractive area for the application of Chinese tactics and an area of prime Chinese interest. Chinese hostility toward India will probably persist and China will attempt to divert Indian energies and undermine Indian self-confidence and prestige by a combination of subversion, military threats on the disputed Sino-Indian border, and intrigue with India’s enemy, Pakistan. Toward Japan, China will seek on the one hand to disrupt the U.S.-Japan alliance by arousing Japanese fears of becoming involved in a nuclear war and on the other hand to expand economic relations with Japan in the interests of her own development effort.

D. Possible Developments in China’s Periphery

1. Southeast Asia

The outcome in Vietnam is of critical importance for other parts of Southeast Asia and will also have important repercussions in more distant areas. For the purpose of this study, we assume that, well before 1976, large-scale military operations will have been terminated under conditions generally favorable to the U.S. but that some Communist-inspired guerrilla warfare will continue. To guard against a renewal of Communist military activity, a substantial U.S. combat force will probably have to remain in Vietnam for some time. The Government of Vietnam will have made some progress in rehabilitating the country, but will not yet have forged strong ties with the masses of the people and will continue to be afflicted by internal factionalism.

In North Vietnam, failure of the war effort would depress the cadres and undermine the regime’s credit with the people. Even with Soviet aid, the damage and disruptions of years of war could not be quickly overcome.

After failing to take over South Vietnam by force, Communist strategy in Laos might follow one of two courses. The Pathet Lao might re-enter the Vientiane government and, under cover of ostensible observance of the 1962 Geneva agreements, seek to take over the entire country by subversion. Or, with North Vietnamese support, the Pathet Lao might try to over-run non-Communist areas by military means. The former alternative appears more probable, especially if the Communists have good reason to fear a U.S.-supported Thai counteraction to any attempt they might make militarily to move up to the Mekong.

In Thailand, the problem of Communist insurgency will persist, but the projected events in Vietnam would have a tonic effect and confirm the Thais in the wisdom of their pro-U.S. alignment. The same events would probably induce Sihanouk to move Cambodia toward a more genuinely neutral position. Burma, in her self-imposed isolation, will be relatively little influenced by these or any other external events and will continue to be characterized by economic weakness and internal dissension.

2. Southwest Pacific

Indonesia will probably be ruled by a conservative government under strong military influence. Despite the persistence of highly difficult problems of economic development and political fragmentation, Indonesia’s prestige in the immediate area will increase, facilitating Djakarta’s efforts to take the lead in sub-regional cooperation.

Both Malaysia and Singapore will benefit from the end of Sukarno’s policy of confrontation, but these two former British colonial areas will face new problems of external defense as the U.K. reduces its military presence there. Also, both will experience some economic difficulties and both may become more subject to internal communal controversy as their present leaders are succeeded by less talented men.

The Philippines may experience increasing social unrest owing to the failure of an opportunistic and often corrupt leadership to solve the country’s economic problems and give its youth a sense of purpose. Leftist, pro-neutralist, nationalist, and anti-American sentiment will grow in student and intellectual circles, but the security ties with the U.S. will nevertheless be maintained.

Australia and New Zealand will continue to give us effective support and to pursue polices reflecting the broad coincidence of their national interests with our own.

3. South Asia

The chances are good that over the next ten years India will remain under reasonably effective nationalist, non-Communist and civilian leadership. Assuming that effective measures are taken to increase agricultural output and to reduce restrictions on private initiative—and that large quantities of foreign economic aid continue to be available—India should do a little better economically than Communist China. India will probably acquire a limited nuclear weapons capability within the next few years.

Pakistan should do even better economically, again assuming the continued availability of substantial foreign aid, but militarily Pakistan’s ability to compete with India will probably deteriorate. Frustration over the Kashmir issue and fear of India will encourage Pakistan to continue to look to China, and possibly also to the USSR, for support and protection. Pakistan is most unlikely, however, to move into the camp of either great Communist power, and it will preserve a significant if diminishing relationship with the U.S. The present Ayub government or a similar regime based on the Army and the bureaucracy should remain in office through most of the decade.

4. East Asia

Over the next ten years, we can expect to find ourselves dealing with an increasingly strong, prosperous, confident and nationalistic Japan ruled by a pro-Western conservative government.

Japan will play an increasingly important role in Asian political and economic developments. Japan will move more cautiously in the security field, but by the mid-1970s she may alter her defense posture, become an air and naval power of regional importance and possibly assume some responsibility for the defense of South Korea. An independent Japanese nuclear weapons program is a serious possibility during the decade.

Her security and economic relations with the U.S. will remain vitally important to Japan. Termination or even renegotiation of the Mutual Defense Treaty now seems unlikely. Within the next few years, however, the U.S. may be confronted by a serious Japanese effort to regain full administrative control over the Ryukyus.

Economic relations between Japan and mainland China will probably expand greatly and Japanese recognition of Peking is likely within the decade. Japanese-Soviet relations should improve markedly, especially in the economic sphere.

The Korean peninsula will probably remain divided at the truce line, but interest in reunification may increase in both North and South Korea along with a heightened sense of political and economic competition between the two regimes. Both North and South Korea should maintain respectable rates of economic growth, but both may experience domestic political instability. The influence of Japan will be felt increasingly in both North and South Korea.

On Taiwan, the death of Chiang Kai-shek may bring power rivalries among the GRC military to the fore. A more fundamental problem will be the continued Taiwanese resentment at being excluded from political leadership. In time, however, a new and more stable balance should be struck between Taiwanese and mainlander interests, based on Taiwan’s sound economy and on the fact that both groups share an interest in continued stability.

Even by 1976, the GRC will probably still proclaim recovery of the mainland as its primary objective, but will have tacitly acquiesced in a two-Chinas situation. Well before 1976, a majority of governments will have shifted recognition from Taipei to Peking and voted for Peking’s admission to the United Nations.

E. General Lines of U.S. Action

In light of the possible developments in Communist China and surrounding areas, how should the U.S. apply the strategy of containment over the next decade?

1. Alternative Containment Postures

a. In East and Southeast Asia, three general containment postures are at least theoretically available to us:

(1) Close-in containment and forward defense, including maintaining a significant military presence on the mainland of Asia;

(2) Containment and defense primarily from the offshore island chain; and

(3) Remote containment and mid-Pacific defense behind buffer zones.

The last of these possibilities must be set aside for present purposes, since it presupposes greater strength and stability in the non-Communist periphery of China than appears attainable within a ten-year period.

In evaluating the remaining two strategic choices, we must distinguish between what is desirable and what is practicable. Maintaining sizable U.S. armed forces on the mainland of Asia is costly, restricts our strategic mobility and can lead to friction with the host governments and peoples. At the same time, abandonment of close-in containment in Southeast Asia is out of the question while we are locked in a struggle to preserve the freedom of South Vietnam. Even after the military phase of this struggle has been successfully concluded, we will find it necessary for some time to maintain a meaningful military presence in mainland Southeast Asia, in order to bolster the internal stability of South Vietnam and the non-Communist portion of Laos and deter further Communist aggression against those two areas of Thailand. Substantial U.S. forces may also have to remain in South Korea for many years to deter renewed Communist aggression, maintain public confidence there and still Korean fears that we might leave them alone to deal with a resurgent Japan.

We shall be able to move back from close-in containment to containment primarily from the offshore island chain only if:

(1) The likelihood of overt Communist aggression should have diminished as a consequence of a clear down-grading of expansionist goals in Peking, Hanoi, and Pyongyang.

(2) The ability of threatened non-Communist areas to cope with Communist insurgency and to meet the first shock of overt aggression should have increased substantially relative to the threat.

(3) The demonstrated capability of U.S. forces to redeploy rapidly into the threatened areas should have greatly increased as a consequence of improved air and sea lift, standby arrangements for the use of bases and other facilities, forward pre-positioning of stocks and improved strategic warning. Conditions in all mainland areas concerned are not likely to satisfy the above requirements for many years, and possibly not within the decade under study.

b. In South Asia, the option of containment primarily from an offshore island chain is not available. Close-in containment by the U.S. is not required by the nature of the threat and is also ruled out on political grounds. We are, therefore, left in this area with no choice but remote containment behind the buffer consisting of the Indian subcontinent.

2. Major Aspects of a Containment Strategy

Successful containment, whether close-in, remote or from the offshore island chain, has three major aspects, each of which will be taken up briefly below.

a. Deterring or Defeating Communist Expansionist Efforts.

(1) Overt Aggression. Ever since the Korean War, the Chinese Communists seem to have been deterred from overt aggression in areas where there was substantial risk of a direct clash with the U.S. The continued effectiveness of this deterrent depends on our continued ability to apply appropriate defensive or retaliatory military power when and where needed and on the continued credibility of our resolve to do so.

Our base structure will probably continue to be adequate for these deterrent purposes over the coming decade. We may, however, need to negotiate new standby arrangements with Australia, the U.K. and India covering possible contingencies in South Asia.

Even today, it is unlikely that we could cope with a full-scale Communist attack on Southeast Asia without using nuclear weapons or resorting to large-scale mobilization. [1 line of source text not declassified] Preservation of a conventional option in these contingencies will require increases in our ability to bring conventional military power to bear in Asia, commensurate with the present threat and the anticipated improvement in the quality of Chinese Communist conventional forces.

Credibility of our nuclear deterrent might be improved by deploying to [less than 1 line of source text not declassified] Guam nuclear-capable forces which would be clearly and specifically designed to cover targets in China rather than in the Soviet Union and which could reach those targets without overflying Soviet territory.

(2) Indirect Aggression. The current hostilities in Vietnam began as a classic case of indirect aggression, but even a US/GVN success there will not constitute a permanent cure for Communist-directed and supported insurgency. Laos, and more recently Thailand, are already victims of indirect aggression. Possible future targets include Malaysia, the Philippines, Burma and Indonesia. We must therefore carefully study the lessons of our experience in Vietnam and make necessary adjustments in techniques of propaganda, civic action and economic assistance, as well as in military doctrine and weapons development.

(3) Subversion and Diplomatic Maneuver. The Chinese leaders consider the underdeveloped, formerly colonial areas of Asia, Africa and Latin America as the arena in which China can best contest for world power status and influence. Subversion and disruptive diplomacy are their principal chosen instruments in these areas.

Economic aid is perhaps our major tool in dealing with this form of the Communist threat. Military aid can also play a role in helping develop forces capable of contributing to internal security. Diplomatic and psychological efforts can emphasize the lack of relevance of Chinese experience to much of the underdeveloped world, the limited ability of the Chinese to provide useful assistance, and the threat to the integrity of new and weak nations posed by Chinese-supported subversion and insurgency.

b. Strengthening Areas Threatened by Asian Communism.

Strengthening the free nations around Communist China is essential to the success of remote containment in South Asia and to any hope of moving back from close-in containment in East or Southeast Asia. We need urgently to acquire a better understanding of how relatively backward nations develop politically and how we can influence that development in desired directions.

The principal means available to us for strengthening nations under the Asian Communist threat are again our programs of economic and military aid. In most of Asia, agricultural development and population control are keys to sustained economic growth. Both should receive a high priority in our aid programs.

The fragmentation of the area around China increases its vulnerability to Communist pressures. Through our aid programs and otherwise we should do what we can to promote regional and subregional political, military and economic cooperation.

c. Additional Measures to Influence Asian Communist Behavior.

In barring the way to expansion of Asian Communism and in strengthening the non-Communist areas around China we, of course, exert a powerful influence on the Communist leaders to moderate their policies. These generalized effects of our deterrent posture should be supplemented by timely application of a number of specific measures.

(1) We should obtain the advantages of differential treatment of Communist regimes in Asia as we have in Europe. Recognition of Outer Mongolia is probably the place to begin. The day when one of the lesser Asian Communist regimes might become an Asian Poland or Romania might be closer than is now apparent.

(2) We should try to induce present or future Communist leaders to reappraise U.S. intentions by avoiding actions which irritate the Chinese without compensating benefits, by reassuring Peking publicly, privately and by our actions that we do not intend to work for the overthrow of the regime, by showing continuing interest in discussing arms control proposals, and by modifying our export controls to permit humanitarian shipments to mainland China (i.e., food, drugs, and medical equipment).

(3) We should seek to increase Peking’s interest in developing a more constructive relationship by continuing efforts to develop unofficial contacts, proposing the exchange of cultural and educational materials and exhibitions and holding out the prospect of step-by-step general relaxation of our economic controls in the context of reciprocal Chinese moves toward improved relations. Gaining access to the U.S. market should be particularly attractive to the Chinese.

(4) We should expose Chinese elite groups to a wider range of information through an expanded Voice of America Chinese language service and through indirectly feeding into information channels leading into China (e.g., Japan and overseas Chinese communities) material which might add to intellectual ferment there.

F. Longer-term Perspectives.

A strategy of containment need not result in a frozen confrontation. Successful containment in fact both facilitates and takes advantage of favorable change.

At the present time, however, the national interests of the U.S. and China clash on two fundamental points:

1. The U.S. stands for orderly, peaceful evolution toward an international system based on law and respect for diversity among national societies. The Chinese Communists stand for revolutionary change leading ultimately to a Communist world.

2. The U.S. is prepared to accept China as one of many components in a peaceful Asian balance of power. The present leadership in Peking will not settle for anything less than regional hegemony and aspires, first, to acceptance as one of three global powers and, eventually to leadership of a Communist world.

Time and a more realistic assessment of the adversary’s intentions and capabilities may be expected to downgrade the practical importance of the first fundamental difference between U.S. and Chinese interests. The second difference, which concerns China’s proper place in the world, may prove less easy to resolve. The Chinese desire to be recognized as the equal of the U.S. and the USSR has its psychological roots in China’s long history during most of which China was the center and guiding light of its own world.

The threat which China poses for us, however, is not that she may actually achieve super-power status. Realistically appraised, China’s present strength and future potentialities for many decades to come are simply inadequate for the international role to which her present leaders aspire. The danger is that merely by striving to achieve the unattainable China may seriously damage our interests in Asia or draw us into a large-scale war to protect them.

China’s chances of overtaking the U.S., the USSR or Western Europe in wealth and power during the present century are negligible. Even in Asia, China will not bulk as large proportionately ten or twenty years from now as she does today. Only in the field of nuclear weapons will China’s claim to great power status acquire some substance, but in this respect, too, China will continue to be outmatched by the U.S. and the USSR.

In the last quarter of the twentieth century, Japan will be the great power of Asia. By the late 1970s, Japan’s per capita GNP will probably be more than ten times that of China and the economic gap between the two nations will still be widening. Japan may also have become a nuclear power and, if so, her greater wealth and technical resources will permit her quickly to surpass China in numbers of nuclear weapons and sophistication of delivery vehicles. Because of greater access to foreign aid, even India may do somewhat better than China economically, and she will probably acquire nuclear weapons in the relatively near future.

If the above picture is even a rough approximation of the shape of things to come, the gap between Chinese aspirations and Chinese capabilities must become increasingly apparent to all thoughtful Chinese. In time, the disparity between goals and reality should induce a fundamental reappraisal and change in Chinese policy.

No responsible Chinese leadership can escape the task of social, political and economic modernization. But given China’s size, huge population, cultural conservatism and limited natural resources, the question of whether any leadership can succeed in this task remains open. Prolonged semi-failure is almost certain to wear down both the morale of the Communist cadres and the responsiveness of the Chinese people to exhortations for greater effort. Material incentives as a means of stimulating economic performance may become an imperative necessity. But the wherewithal for such incentives can be found only by reducing the priority accorded expenditures for military purposes or by seeking foreign economic assistance. A future Chinese leadership may be compelled to do both.

Chinese could turn for economic assistance to either the Soviet Union or to one or more non-Communist nations. Our long-term problem may well be how to ensure that, as containment succeeds, China will turn toward the free world rather than toward the Soviet Union.

The answer may lie in two directions. On the one hand, as Chinese policy moderates, we should try to draw China into activities on the broader world scene where, through exposure to outside reality and successful assumption of international responsibility, she might gain a degree of status and respect which could substitute in part for the unattainable goals of regional domination and super-power status. On the other hand, by gradually shifting as circumstances permit from a military policy of close-in containment to containment largely from offshore island positions, and by demonstrating in other ways that we are not committed to a policy of hostility or military “encirclement”, we might ease the tension between China and ourselves, thereby facilitating a decision that Chinese interests were better served by normalizing relations with us rather than risking another betrayal at the hands of Russians. In any event, over the next decade and beyond, the dealings between China, the Soviet Union, and increasingly, Japan will form one of the most important sets of relationships in the world, in which our own security and position in Asia will be heavily involved.

We might over the very long run hope for a situation in which containment in China, insofar as it remains necessary, is left largely to Japan and the Soviet Union with our power and influence held in reserve to rectify any imbalances which might arise. If we achieve the advantageous regional balance of power which is among our major objectives in Asia, and if we draw China increasingly into a cooperative relationship with ourselves and other free nations, the strategy of containment will truly have succeeded.

[Here follow Chapters I–V and Appendices A–C. Volume II contains Annex I, “Economic Trends and Prospects,” and Volume III, “Military and Political Factors,” contains Annexes II–X.]

1. Source: Johnson Library, National Security File, Country File, China—Communist China Long Range Study by the Special State-Defense Study Group. Top Secret; Special Handling Required; Not Releasable to Foreign Nationals. According to the foreword, the study was undertaken on March 8, 1965, as a result of an agreement between the Deputy Secretary of Defense and the Deputy Under Secretary of State for Political Affairs. The Study Group operated under the policy guidance of those two officials and the JCS Chairman. It was directed by Joseph A. Yager of the Policy Planning Council and Brigadier General Stephen W. Henry, USAF. Its mission was to examine the politico-military position of the United States vis-a-vis “Communist China and other potentially hostile or disruptive forces in the Far East” through 1976. Before preparing the Long Range Study, the Study Group prepared a Short Range Report, dated April 30, 1965; see Document 92 and footnote 2 thereto.

   On October 19 the Far East Interdepartmental Regional Group (a sub-group of the Senior Interdepartmental Group) endorsed the basic policy concepts developed in the Long Range Study, as summarized by the FE/IRG China Working Group. The minutes of the October 19 meeting and the China Working Group report are filed in Department of State, FE/IRG Files: Lot 70 D 56.