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

176. National Intelligence Estimate⁰

NIE 13-63

Washington, May 1, 1963.

PROBLEMS AND PROSPECTS IN COMMUNIST CHINA

The Problem

To establish where Communist China now stands in its domestic situation and foreign policies, to identify the major problems it faces, and to estimate probable developments over the next two years or so and, where possible, further ahead.

Conclusions

A. Communist China’s domestic situation appears slightly improved from its recent grievous state. To a considerable extent this improvement reflects relatively moderate, pragmatic policies which have replaced the excesses of the “leap forward” and commune programs. With good luck and good management, the economy could within the next couple of years resume a rapid rate of growth approaching that of the First Five-Year Plan, though it is likely to fall short of this. A critical question over the next five years will be whether the Chinese Communist leadership will sustain a pragmatic course in the face of its strong ideological compulsions. Unsound doctrinaire policies, bad weather, and other unfavorable factors could combine to cause complete economic stagnation. (Paras. 1-6, 11-17)

B. Though discontent will persist and could increase if the economic situation deteriorates, we do not believe that dissidence will pose any serious threat to the regime in the next two years. (Para. 10)

C. Communist China’s economic difficulties and the drastic reduction of Soviet cooperation have lessened the relative effectiveness of Communist China’s military establishment. Nevertheless, Peiping still has by far the strongest Asian army, and this is sufficient to support the kind of relatively cautious foreign policies Peiping has actually been conducting or is likely to conduct during the next two years. It will almost certainly not have a militarily significant nuclear weapons system until well beyond this period.¹ (Paras. 18-23)

D. Peiping’s dispute with Moscow springs from basic issues of incompatible national and party interests, and the Chinese Communists show no signs of relenting. Public polemics may be damped down on occasion, but we do not believe a fundamental reconciliation will take place. The Chinese will almost certainly continue to attempt to expand their influence at Soviet expense in the underdeveloped countries and to turn Communists throughout the world against Khrushchev and his policies. A formal schism could occur at any time, although the chances are reduced by each party’s great anxiety to avoid the onus of having split the world Communist movement. (Paras. 24-30)

E. Communist China’s foreign policy will probably continue generally along current lines. Peiping will remain passionately anti-American and will strive to weaken the US position, especially in east Asia, but is unlikely knowingly to assume great risks. China’s military force will probably not be used overtly except in defense of its own borders or to assert territorial claims against India. Subversion and covert support of local revolutions will continue to be Peiping’s mode of operation in southeast Asia and, to a necessarily more limited degree, elsewhere in Asia and in Africa and Latin America. (Paras. 31-40)

[Here follow paragraphs 1-40, comprising the Discussion portion of the estimate, Annex A, “Economic”, comprising 343 paragraphs, Annex B, “Order of Battle Tables”, and two maps.]

0. Source: Department of State, INR/EAP Files: Lot 90 D 110, NIE 13-63. 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, the Air Force, and the NSA participated in the preparation of this estimate. All members of the USIB concurred with this estimate on May 1 except the representatives of the AEC and the FBI, who abstained on the grounds that the subject was outside their jurisdiction.
1. This question will be discussed in detail in NIE 13-2-63, “The Chinese Communist Advanced Weapons Program”, (Top Secret) to be published soon. [Footnote in the source text. The estimate under reference was published as SNIE 13-2-63, “Communist China’s Advanced Weapons Program,” July 24, 1963. A portion of the text is printed in Foreign Relations, 1961–1963, volume VIII, pp. 492-494.]