FA CoN TR OE SOE COE TE Oe nee ere og DEPARTMENT OF STATE Washington, D.C. 20520 Hl sferk 700282 xr 7700354 Ori :0/fadre , ; es g 5.2 . January 7, 1977 ~ [Ua COPIES TO: ue a cn (' CODE T a et eee cag RF (jhw) ae fi" TO: M - Mr. Eagleburger ag ec ; oe ake aie THRU: S/S - Mr. Boxg, ::'2-7 rg oo ann FROM: EA - Robert H. Miller, Acting bay } . . ae SUBJECT: Background Paper for Secretary-designate : care ae wae Vance's Luncheon with PRCLO Chief Huang Chen Attached for your signature is a memorandum for S/CL - Mr. Lake transmitting a background paper on the current situation in the People's Republic of China. The paper was prepared by EA, with the informal assis-_ tance of INR, for Secretary~designate Vance in con- _ nection with the January 8 luncheon hed retary) with PRC Liaison Office Chief Huang Chen, , memorandum also transmits biographies of the PRCLO of-~ ficials who will be present at the lunch. (hosted by the Sec- | The |... We under- stand that a copy of the background paper will also be “going to Secretary Kissinger via Win Lord. 4 “ Attachment: Memorandum to S/CL - Mr. Lake r Clearance: S/P - Mr. “MIS fre cd DEPARTMENT OF STATE 7700354 Washington, D.C. 20520 xr 7 7 0 0 2 8 2 COPIES TO: ae UNCLASSIFIED : eS (with SECRET Attachment) : CODE T a ea ‘ RF (jhw) . = ae i oie J _ 3 _o? " January 7, 1977 , a TO: $/CL - Mr. Lake ' PROM: M == Lawrence S. ee eee GC. boc SUBJECT: Background Paper for Secretary-designate Vance's / Luncheon with PRCLO Chief Huang Chen 7 In response to your request, attached is a back- - ground paper on the current situation in the People's Republic of China that has been prepared for Secretary- ' designate Vance in connection with the January 8 4 “luncheon with PRC Liaison Office Chief Huang Chen nested by Secretary Kissinger. _ Also attached are biographies, of the PRCLO officials who will attend the luncheon. ; Attachments: ; ) 1. Background Paper — u 2. Biographies l, | a ‘ J | t { | UNCLASSIFIED (with SECRET Attachment) : ws ee ee eR SECRET , a Situation in the PRC . As China enters the new year, the central .~ leadership appears determined to use the opportunity presented by the purge of top leftist leaders to overcome the PRC's persistent political and economic problems. Decisive efforts to deal with these issues had proved impossible as long as Mao was alive, in part because of his propensity to preserve a balanced tension between "red" and "expert" lines of develop- ment. The deaths of Mao and Chou during 1976 helped. precipitate a series of crucial tests of strength between these two lines, and the stage has now been set for a period of consolidation and revamping in both the economy and the key party organizations. Major difficulties, however, lie ahead. ‘Although most of the references to factional troubles which have recently appeared in the pro- vincial media and have been replayed in the Western press describe the situation which obtained last summer--before Mao's death and the arrest of the "gang of four"--the situation is in some ways as tenuous as when Chou En-lai sought to steer the country onto a more stable course in the aftermath of the Lin Piao affair in 1971. The outlook, then, * is clouded, but for the moment the initiative is in the hands of leaders who apparently believe that China's best interests will be served by a period of orderly development. With the elimination of the leftist quartet, the central authorities are again placing great emphasis on economic construction, industrial pro- duction, orderly planning, and improving the people's ‘livelihood. The idea of "self-reliance" has not been abandoned, but renewed stress has been placed on the importation of foreign technology as a means of speeding the transition to a-modern economy. ; SECRET XGDS-2 { é t “¢ t * SECRET m2 The rigid cultural orthodoxy imposed by Chiang Ching has been somewhat relaxed. A new emphasis on discipline and "book learning" in the classroom seems to be under way, and preparations are being made for greater reliance on examinations as a means of selecting candidates for university-level education. These moves have contributed to a mood of hope and expectation in China that has been missing since before the Cultural Revolution. Nevertheless, residual leftist resentment against the turn of political events persists, and rightist pressures to go further in the direction of “rationalization” than is politically expedient remain strong. Hua Kuo-feng's own staying power is still untested, and potentially destabilizing rivalry between the civilian and military bureaucracies looms in the background. The new leaders have not yet apportioned power among themselves, and antagonisms among military leaders presumably remain. Underlying economic and social problems persist, and although they are likely ‘to be’ tackled energetically, they cannot be easily. sedes solved. Moréover, evén ‘though foreign policy continuity is being stressed and there has been no recent change in PRC positions on most international issues, the regime will have to make concrete decisions in applying Mao's "revolutionary foreign policy line" to a changing world situation. The state of leadership cohesion will ' affect how it is able to address these problems, in-~ cluding specific issues in relations with both the United States and the Soviet Union. Sino-US Relations. The Chinese are adhering to a wait-and-see attitude toward the Carter Administration. Private statements by Chinese officials since the Novem- ber US elections, as reported through clandestine chan~ nels, have stressed the importance Peking attaches to further improving Sino-US relations. Several have said that the current Chinese regime would find progress toward normalization useful in bolstering its authority at home and abroad. A number of officials have said SECRET SECRET ae that Peking does not-intend to use force against ‘Taiwan and is willing to wait patiently for re- unification to take place. Some have even hinted at possible flexibility in the PRC approach on key issues, such as the handling of US~ROC Mutual Security Treaty and the future status of Taiwan. _s These statements do not, however, form a consistent . pattern. Most Chinese officials have reiterated stand- ard PRC rhetoric, and a few have used hardline formulas, including statements that Taiwan would be liberated by the PLA. There is no evidence, moreover, of any change in Peking's position on the conditions for normalization. Thus, various officials have emphasized that: ~~ although the US and China have common interests of greater importance than Taiwan, fundamental improvement cannot be achieved until a solution to the Taiwan problem is reached; ~~ normalization must follow the Japanese formula, including the "three conditions" (termination of the US-ROC security treaty, withdrawal of all US forces from + Taiwan, and severing of .US-ROC diplomatic :ties);:and + -.° 0°, ~~ China will not guarantee non-use of force in reunifying Taiwan with the mainland. ~ On the official level, during Ambassador Gates' courtesy call on PRC Foreign Minister Huang Hua .. ’ December 31, Huang did not mention Taiwan or conditions for US-PRC normalization but stressed that Sino-US relations would continue to develop."so long as both sides strictly abide by the principles contained in the Shanghai Communiaue.” In late December, a former Taiwan politician, Chen Yi-sung, who was elected to the Standing Committee of the «PRC National People's Congress in 1975, attracted attention -“in Tokyo when he granted a long interview to a Japanese newspaper, during which he offered various "personal views" “on US-PRC relations. SECRET 1 ey A SECRET . 4. Chen's reliability, however, is highly suspect. He was the source of earlier fallacious reports alleging that a high-level ROC delegation had gone to Peking to negotiate PRC-ROC differences. Doubts concerning his ability to speak for the regime have been further reinforced by a recent intelligence report in which comments by two PRC officials in- dicated that Chen had been relieved of his NPC position and had been reluctantly allowed to depart despite fears that he might make anti-PRC SEGESHEHES abroad. In recent weeks, PRC-controlled newspapers in Hong Kong have portrayed President-elect Carter in relatively favorable terms. One noted that Carter in his December 27 press conference had expressed “deep concern" with growing Soviet military strength and commented that he obviously had not been lulled by Brezhnev's chant of detente. Earlier, however, these same papers had signalled PRC disappointment with Carter's campaign references to the "independence" of the people of Taiwan-and expressed hope that the President-elect would realize such views are incompatible with his professed Sentae to normalize relations with Deane wee see China, gan ES ; Re * pe Te ag Sino-Soviet Relations. Prompt Chinese rebuttals of Soviet efforts to imply the existence of forward movement in Sino-Soviet relations since Mao's death . have resulted in mixed signals from Soviet representatives. ‘ Some continue to allege that progress: is being made in the border talks, while others realistically discount the likelihood of early progress. A New Year's greeting se broadcast via Radio Peking in Russian reiterated Vice Premier Li Hsien~-nien's November 15 banquet assertions eel that the Soviets continue to slander and threaten China while creating a false impression about detente. And a PRC~owned Hong Kong paper declared on December’ 30 that renewal of the Sino-Soviet border talks was not viewed - by Peking as a sign of detente, It added that whatever the outcome of the talks, basic policy toward the Soviet Union will remain the same. Domestic PRC media have continued their steady stream of anti-Soviet propaganda. SECRET SECRET . ey “Be At the same time, as noted later in this paper, - there have been a number of tentative signs that the PRC may devote less domestic attention in the coming year to defense preparations against the Soviet military threat. While these signs might, if borne | out, entail lowered tension between the two countries, this would not necessarily result in any improvements in the political climate of Sino-Soviet relations. PRC Internal Situation. Over the past several weeks Peking has made several moves designed to demonstrate leadership unity and progress in dealing with China's woes: - == A national conference on agriculture, which detailed problems and future strategies, was held during December with top leadership turnout. Peking also announced plans for a similar conference on industry to be convened before next May. -- Chairman Hua Kuo-~feng gave a major policy address at the conference in which he laid out four central tasks for the next year--criticizing the "gang _ -of four,"strengthening the party,. boosting economic, growth and studying Marxism-Leninism-—Mao Tse~tung thought. -~ A 1956 Mao speech on China's strategy for economic and political development was officially published for the first time on Mao's birthday December 26. The speech, which was replete with references critical of the Soviet Union, was quoted by Hua and others at the Agricultural Conference and has been widely circulated for thorough study as the correct analysis of China's problems and guide for its development. -- Peking has disseminated a new central . document on the crimes of the "gang of four" which includes preliminary reports of national and local investigations into the "gang's" activities and has ordered a new upsurge in criticism of the "gang" using this material. Provincial broadcasts began late last year to disseminate material de- tailing the role of the "gang" in fomenting local factionalism and disorders prior to Mao's death. SECRET SECRET LB -- The central ‘authorities have also continued to show their willingness to use the PLA to restore order and production if local officials cannot handle the situation. Thus, PLA officers were ordered to take charge of a strategic rail junction at Chengchow, Honan, in late December. ‘Civilian Versus Military Priorities. The publication of Mao's 1956 speech, with its emphasis on rational economic planning, suggests that Peking hopes to put aside the tumultuous experience of the Cultural Revolution and return to an atmosphere of domestic moderation, pragmatic domestic policies, and relative international peace which prevailed in the mid-1950's. Of particular interest in the speech is Mao's argument that the best way to modernize China's military is to cut defense spending (he proposed by one-third) while building up China's industrial and technological base, thus ensuring the long-run ability of China to support a modern armed force. Mao justified the proposal, in part, by arguing that international tensions had eased, making world war unlikely, and that China was not in danger of jattack. . “whough "PRC media otherwise have not mentioned ‘a defense cut, there are signs that such a proposal may be under consideration. This year's New Year's joint editorial diverged from those of the last three years by omitting two Mao quotes on war preparations, by not mentioning the PLA's war-fighting duties, and by avoiding any comment on the imminence of world war. In addition, a December 26 broadcast concerning a Canton military rally presided over by the powerful Military Region commander, Hsu Shih-yu, stated that Mao's speech lays out "the correct guidelines for strengthening national defense building. ... We must strengthen national de- ‘fense. Therefore, we must first strengthen economic construction." Mao's speech could prove a powerful tool to those elements within the leadership who believe that economic construction must be emphasized over defense spending. Such a decision, however, would undoubtedly be controversial within China's powerful military establishment and debate “SECRET SECRET ‘ le over the PRC's spending priorities could exacerbate tensions between China's military and civilian leaders. Nevertheless, the military establishment is not a monolith, and this fact could give Hua Kuo-feng and other top civilian leaders some room for maneuver. The Teng Problem. A second problem plaguing the leadership concerns the fate of Teng Hsiao-p'ing. _ There is strong sentiment within the party apparatus ‘and among some elements of the military leadership to "rehabilitate" Teng once again on the grounds that the charges against him last spring were trumped up or distorted by the leftist quartet. Teng's "rehabilitation, however, poses a number of troublesome issues for the new leadership in Peking and especially for Hua Kuo~feng, who has in effect stepped into Teng's shoes as the successor to the party and government positions of Mao and Chou. Disagreements within the leadership over how to handle Teng may have held up decisions on how to fill key posts, and Teng's reappearance, unless managed skillfully, could prove destabilizing. The next few days could provide important clues to Teng's fortunes. Preparations for the first anniversay Lees = Of ‘Chou En-lai's death January 8.were obvious during : : the week, and posters ‘appeared in Peking referring to. = "Comrade Teng" in an implicitly favorable light. A Tibetan radio broadcast has also indicated that the four ee _ purged radical leaders may be brought to public trial on the anniversary of Chou's death. Given the close con- .‘ nection between Teng's downfall and the “gang of four," any public moves to wrap up the case against the "gang" could be accompanied by decisions on Teng's own status. SECRET we me cree eeee See enmceme: eampeeee , noe an ~~ ~- ONFIDENTIAL HUANG Chen (7806/6966) ie Z ay Kt w i ~ o™ Chief, Liaison Office, Washington, D.C. Huang (pronounced hwahng) Chen, Peking’s senior diplomat and a leading member of the Chinese Com- munist Party (CCP), has been Chief of the People’s Republic of China (PRC) Liaison Office in the United States: since March 1973. He had previously been Ambassador to France since 1964. Since Huang’s arrival in Washington in May 1973, negotiating trade matters and cultural PEOPLE’S REPUBLIC OF CHINA exchanges and finding permanent quarters for the Office staff have been among the main concerns of the Liaison Office. During the first year of his tenure as Chief of the Office, Huang spent 8 months in China. He left Washington for Peking in July 1973 to attend the 10th CCP Congress, which reelected him to the CCP Central Committee. Shortly after his return to the United States, he again went to Peking temporarily in November 1973 for’ undetermined reasons. In August 1974 he met with President Gerald Ford. -Ambassador Huang Chen.meets newly aT President Gerald Ford in August 1974 CONFIDENTIAL Clarified by: 004050 Eaemnt fram gen nace eeruas o, t ner te of £. Ae ' + 4 i] H } t ! i Pe ue eee ees Soe —NFIDENTIAL Huang has been involved in developing Sino-US rapprochement since then Presidential Assistant Henry Kissinger’s initial trip to Peking in July 1971. In February 1972, during then President Richard Nixon’s trip to China, the President and Premier Chou En-lai chose Paris as the site for future official contacts between their countries. As China’s Ambassador to . France, Huang then began serving as Dr. Kissinger’s contact point with Chinese leaders. Huang subsequently met frequently with other US represen- tatives in France, and in April 1972 he went to Peking for 2 months to help prepare for Dr. Kissinger’s June visit to China. A Soldier Schooled in the Fine Arts _ Huang Chen was born into a peasant family on | December 1908 in Anhwei Province. He attended schoo] in An-ching, Anhwei Province, and later graduated from the Hsin-hua Fine Arts Academy in Shanghai. He joined the CCP in 1931 and entered the Kiangsi Soviet, where he served as a political commissar. By the time of the Chinese Communists’ Long March to northern Shensi in 1934, he was a regimental commander in the 3d Army, led -by P’eng Te-huai. During the Sino-Japanese War, Huang was a political officer in various units of the 129th Division of the 8th Route Army, commanded by Liu Po-ch’eng, from at least 1938 until 1945. At the end of the war he held the rank of major general. During 1946-47 he was assigned to the Peking Ex- ecutive Headquarters, the tripartite mediation organization set up under the . auspices of the US Marshall Missior-to help end the Chinese. civil war. With: . the resumption of hostilities between the CCP and the Kuomintang in 1947, Huang again joined Liu Po-ch’eng’s army. When the Communists formed ‘their new central government in 1949, Huang was working in the General Political Department of the People’s Revoluticnary NAL Council, then the highest military organ in China. Long Diplomatic Career Huang’s initial diplomatic assignment was as China’s first Ambassador to Hungary. He served in Budapest from 1950 to 1954 and was then transferred to head his country’s Mission in Indonesia. His 7-year tenure ‘ there was unusually long for an Ambassador and was marked by personal friction with Indonesian Foreign Minister Subandrio and serious difficulties concerning the problem of Overseas Chinese. His call to the Overseas ' Chinese in Indonesia to support and obey the Government of the PRC did not please the Indonesian officials. Huang took part in the negotiations on the citizenship rights of the Overseas Chinese in Indonesia that resulted in the . Dual Nationality Treaty, - which was sipped in 1955 but not implemented until 1960. ‘CONFIDENTIAL ibiiane ‘ af wre mee Hotere = eee gS TEE EE poe CONFIDENTIAL From June 196] to April, 1964 Huang served in Peking as Vice Minister of Foreign Affairs, specializing in Afro-Asian matters. He worked to con- solidate China's relations with the Third World, which had begun to improve at the First Afro-Asian Conference in Bandung in 1955. Ambassador to France In 1964 Huang was named China’s first Ambassador to France, then considered the PRC’s most important post in the Western world. During his first 3 years in Paris, Huang settled a dispute over the degree of control the Embassy should exercise over the Paris branch of the New China News Agency (NCNA). During that period he also traveled extensively in France, mainly to Lyons, Marseilles, Bordeaux and other areas with large Chinese communities. Along with most other high-ranking Chinese diplomats, Huang was temporarily recalled to Peking in the spring of 1967, presumably for political reindoctrination connected with the Cultural Revolution. Official Chinese press sources did not report on his activities during the next 2 years, but foreign diplomats reported meeting him in China in 1968. Despite having un- dergone criticism, he emerged from the Cultural Revolution with enhanced status when he was elected to the CCP Central Committee in 1969. Premier Chou En-lai’s influence may have helped him and other members of the foreign affairs apparatus survive the upheaval unscathed. After returning to Paris later in 1969, Huang was noncontroversial.and discreet, but not retiring. Active diplomatically and socially, he apparently was effective in making his country’s viewpoint known on a wide variety of issues. Huang was again in Peking between May and July 1970, attending a Ministry of Foreign Affairs conference on the Indochina situation and other foreign policy matters. Huang formalized China’s diplomatic relations with several nations, in- cluding Australia, Turkey and Spain, while he was serving in France. His tour there ended in March 1973. Well Traveled ; Huang has traveled extensively and has represented his country at many international conferences. In 1955 he was a member of Chou En-lai’s delega- tion to the First Afro-Asian Conference in Bandung, Indonesia. In November 1962, as Vice Minister of Foreign Affairs, Huang visited In- donesia, Burma,-Ceylon (now Sri Lanka), Egypt. Ghana and Guinea to ex- plain the Chinese position on the Indian border dispute. He also accom- panied then Chief of State Liu Shao-ch‘i to Indonesia in April 1963. ~ Washington Hiaisgn Office: Hsti se ies and Wang Hung- -pao. rest tae toe act . . , . at? ray soe as iN i i SN _ “oo ty ea vtae ve fe steph os oe. _ Early Life and Career ~ ae ee oath Little ‘aformation on Chien’ s early life sie career is currently available. ‘He was born in 1926 in Shanghai. He attended St. John’ s University there and studied English, which he still speaks well. His first known official posi- tion was that of an attaché in the Chinese Embassy in Norway from 1962 through 1963. In 1964 he was promoted to Third Secretary, a position he held until 1967. Two of his colleagues in Oslo are currently members of the ‘woe 9 og le Se -- Personal Data °° - bg? pa t - . sone oat 2 ia tas gel Pres "An urbane and competent disiomat: Chi ien is witty and has a sense of Tuner: ‘He is handsome, and his clothes are noticeably better tailored than’ those of most Chinese. His wife, Hsiieh Shu-hua, is the Liaison Office dector. ae couple has a son and a daughter who live i in China. oo oats * } rf H 7 , 1 CONFIDENTIAL HSU Shang-wei PEOPLE’S REPUBLIC OF CHINA (1776/1424 /0251) We ia Third Secretary, Liaison Office, Washington, D.C. _ Hst (pronounced shew) Shang-wei has been a Third Secretary of the Liaison Office of the People’s Republic of China (PRC) in the United States since July 1973. He serves as a political officer in the Investigation and Research Section. Before his appointment to the Liaison Office, Hsii had become ac- quainted with US affairs as a member of the Foreign Ministry. During then President Nixon’s February 1972 visit to China, Hsii was assigned to the President’s villa as a protocol officer. In June 1972, when he served as an in- terpreter for the Chinese table tennis delegation that visited Australia, New Zealand. and Singapore, Hsii-was a desk officer in the West European, American and Australasian Affairs Department of the Foreign Ministry. He ‘ atconipanied the US national basketball teams as an interpreter. during ’ their tour of the PRC in June 1973. Hsii was born on 30 June 1934 in Chekiang Province. During 1959-70 he was in Norway, where he studied Norwegian and served as secretary and interpreter for his country’s Ambassador. An astute political observer, Hsii is well suited to analyzing the nuances of American political rhetoric. He is bright and follows closely press accounts of current events in the United States and abroad. He energetically solicits information of professional interest with finesse calculated to put the responder at ease. Hsii speaks Norwegian and English. Hsii is married to Wang Hung-pao, an attaché at the Liaison Office, whom he met when they were both serving at the Chinese Embassy in Norway. The couple has two young children, who are living with Hsii’s parents in Shanghai. 7 October 1974 3}