U.S. Assistant Attorney General John Demers discussed the China Initiative and the process for assessing risks posed by Chinese acquisitions or the business operations of Chinese companies in America.
The Art of China Watching
APPROVED FOR RELEASE 1994
CIA HISTORICAL REVIEW PROGRAM
2 JULY 96
No Foreign Dissem
The following article does not answer any questions about what is going on inside China today. It is not intended to. It deals simply and solely-and with an unusual degree of self-deprecation-with the state of the art of the Sinologist or China-watcher. This article is for those who wonder what problems the China analyst has, what tools, techniques, and assets he can bring to bear, and how confident he may be in the end product. Note at the outset that the title calls it an "art," not a "science."
THE ART OF CHINA-WATCHING
Most knowledgeable observers agree that information on, and analysis of, events within the People's Republic of China has advanced now to the level of "Kremlinology" about 15 years ago. It is no semantic accident that observers of the Chinese political scene are more often called "China-watchers" than "Sinologists," while analysts of the Soviet Union are frequently referred to as "Kremlinologists." The art of China-watching is imprecise at best, and hardly deserves yet to be called Sinology.
The explanation, or blame, for this often frustrating situation lies mainly with the way the Chinese conduct their affairs. To say the Chinese have a penchant for secrecy is almost an understatement. Some Chinese have said privately that they deliberately try to hide important domestic events from their northern enemy, the Soviet Union. While there is certainly an element of truth in this, the Chinese are also anxious to conceal information from the Chinese populace and from the outside world in general. The secrecy syndrome applies more often to domestic than to foreign affairs. By its very nature, Chinese foreign policy inevitably makes itself known. With a second country involved, Peking has had less success in hiding its foreign policy.
On the domestic front, however, there have been for the past several years serious policy differences and genuine personal animosity among the Chinese leaders. It is these schisms that Peking seems most anxious to hide — from the Chinese populace, in order to promote confidence in the leadership and relative stability at the grassroots; from the Soviet Union, because Peking believes Moscow has tried and will try again to exploit differences in the Chinese leadership; and from the rest of the world, perhaps for similar reasons and also because the Chinese seem to believe that their internal affairs are none of our business. They complained bitterly about Western press coverage of Chinese domestic politics last year. They did not like the interpretation presented in the articles, but neither did they say anything to clarify the situation.
The Aging Leadership
By most standards, China is a peculiar country. It has perhaps the most aged leadership in the world. Four of the five vice-chairmen of the party are in their seventies. The chairman, Mao, is 81. In the government bureaucracy, which exists alongside the party structure, there is no head of state. In fact, as with most major decisions, it took the Chinese several years of debating the issue to decide whether to abolish the job. Until January, when the post was officially dropped, it was filled on a temporary basis by an 88-year-old party veteran. Without a head of state, the highest ranking government official is the chairman of China's legislature. He, too, is 88.
Since the Communists came to power in 1949, China has been run by essentially the same small group of aging revolutionaries. As a rule, they do not retire. They tend to remain in office until they die or are purged. Thus far, very few have died. Because they are roughly the same age — that is to say, old indeed — there is the danger that they will all die nearly at once, leaving a relatively inexperienced group of younger officials to take over the world's most populous country. Only in the past two years has this old leadership made a concerted effort to bring younger people into the top ranks of the party and government hierarchies. By Chinese standards, "younger" generally means men in their sixties.
Being elevated so recently, these younger officials will probably not have much time to show their administrative and political talents, especially the ability to survive the political maneuvering, backbiting, and rivalries that are likely to emerge when the old leadership finally passes from the scene. Because the leadership has been relatively tardy in beginning to put together a succession arrangement, China watchers have little information to go by in trying to predict the outcome of a possible succession struggle and the directions Chinese policy will take in the coming years. Why the leadership was so slow in recognizing the obvious need to groom younger officials remains a mystery, but no firm steps were taken until the party congress in August, 1973, 24 years after coming to power.
Vacancies and Unannounced Appointments
There are, of course, many mysteries on the Chinese political scene. For more than three years there was no officially designated defense minister, although it was fairly obvious who was acting in that capacity. The man was finally given the job publicly in January, but why he wasn't named earlier is yet another unanswered, and perhaps unanswerable, question. The man is 76, which means the Chinese will have to go through this same apparently arduous process of choosing a defense minister again in a few years.
The previous defense minister was Lin Piao, Mao's designated heir who allegedly died in a plane crash fleeing to the Soviet Union after an abortive coup attempt. All the events surrounding Lin's political demise and death will probably never become known, but the incident has had a profound effect on the Chinese leadership. It has fed their fears of possible Soviet meddling in China's domestic affairs and has transformed the once glorified army into an institution now viewed with considerable distrust. In typical Chinese fashion, Lin was privately vilified by name in documents circulated within China, but for the public record he was just an unidentified "political swindler." Everyone in China and outside knew that the "swindler" was Lin, and the Chinese probably were aware that they were fooling no one with their attempts to conceal his identity by not using his name publicly. Nevertheless, it was not until nearly two years after his death that the Chinese propaganda machine started to attack Lin by name.
The defense portfolio was just one of many jobs that remained vacant for years on end. For several years there was no army chief of staff, no finance minister, no one in charge of health, no one in charge of public security, and, despite the growing importance of China's oil industry, no minister of petroleum. At no time since 1971 have all of China's provinces had an officially designated top man. Each time a new job opens up in China, it evidently becomes a political nightmare just to get a small group of people to agree on who should fill it. Most Chinese, even those in officialdom, can at best take only wild guesses as to who sits in what job until the appointments are announced by the Chinese press.
Because the Chinese people, and even many officials, are often kept in the dark about domestic politics, the usual problems of obtaining clandestine information about denied areas are magnified in the case of China. Officials abroad are often as confused about domestic developments as western observers are. An amusing exchange ensued last year when the Peking press began to attack the Italian film maker Antonioni. One official abroad asked another what the attacks were all about, and the reply was that there had been no explanation from Peking. Meanwhile, China watchers in Washington and elsewhere were frantically poring over the articles, certain that they were of enormous significance but not at all united about why they were.
Over the years, China watchers have developed some analytical tools, much the same as those used by Kremlinologists, to help break through the fog. The Chinese, for their part, as their perceived need for secrecy has increased, have devised a number of schemes to render these tools less useful than they might once have been. One rule of thumb is that in their propaganda the Chinese do not say things by accident and rarely say anything directly. They did not, for example, attack Antonioni for nothing, and they probably were trying to convey other messages beside their distaste for the film he made about China. One theory was that the attacks were directed at someone in the Chinese leadership who was known to be an Antonioni fan, another that they reflected a hardening of Chinese views toward cultural exchanges with the West. While the various theories arrived at through propaganda analysis usually lead to lively debates among China watchers, rarely can any single theory be proved conclusively.
Complicating the process of analyzing propaganda is a relatively "free" press in recent years, at least for those in the highest levels of the bureaucracy. The party's official newspaper has been known to carry two articles on the same subject in the same issue, expressing diametrically opposed views. Because no one "faction" in the leadership has exclusive access to the press and because even signed articles are usually in pseudonym, China watchers can never be absolutely certain whose views are being expressed in a given article.
Imprecise though it may be, propaganda analysis is often the only way to keep track of an important political development as it evolves. Last year the Chinese waged a major political campaign, almost exclusively through propaganda, that attacked two corpses — the fallen defense minister, Lin Piao, who died in 1971, and the ancient sage Confucius, who died some 2500 years ago. The propaganda articles discussed major figures and events from the Chinese past, but the historical figures seemed to be surrogates for people in the current leadership, and the events often resembled current problems.
Accepting the premise that the historical figures did in fact represent current leaders, the problem of course was to determine which ones. With little more than propaganda to go on, China watchers came up with widely differing interpretations. Adding to the confusion, some historical figures who had been consistently praised for implementing progressive policies suddenly were attacked in other articles. The reverse took place, All this suggested that different people in the leadership were promoting their own favorite historical figures, i.e., those who stood for themselves, and denigrating the other stand-ins.
Confucius, of course, was consistently attacked, sometimes for very specific and detailed misdeeds. For example, he was criticized for being finicky about food and insisting that his meat be sliced just so. This accusation, though obscure to China watchers, probably was very revealing to the small group of leaders at the top who know one another's habits thoroughly. No information has ever turned up as to who in the current leadership is noticeably picky about food, but undoubtedly the individual in question and his colleagues recognized the target immediately.
When Chinese leaders attack one another through the use of information known only to themselves, it not only leaves China watchers overseas baffled, but makes it impossible for most Chinese officials to understand who is being attacked. In fact, officials and the Chinese populace in general were all instructed to study the same propaganda articles, without explanation, that the outside world was puzzling over. They, too, had to be China watchers, and their speculation as to who was under attack covered the entire political spectrum in the Chinese leadership. A Chinese official even guessed that the target was the 88-year-old acting head of state, who was extremely frail and died a year later. One Chinese, expressing his frustration over the obscure criticism of Confucius, posted a notice on a public building that read "why are we attacking someone who has been dead more than two thousand years?" To their credit, China watchers were generally quicker to recognize the importance of the anti-Confucius campaign than were many Chinese officials.
One of the pitfalls of propaganda analysis is that certain catch phrases used repeatedly over the years can mean different things at different times. The term "three-in-one combination," for example — the organizational principle for the formation of local administrative organs — meant at its inception a combination of experienced officials, military men, and "the masses," i.e., ordinary workers or peasants. In recent years, however, as the military has fallen into disfavor and many workers and peasants have shown themselves to be incompetent administrators, the phrase has now come to mean a combination of old, middle-aged, and young officials. Failure to recognize the change in meaning would leave a China watcher several years behind the times, leading him to believe that the Chinese were still interested in having soldiers, workers, and peasants share the management of the local administrative units.
Subtle changes in the propaganda line are often extremely significant, and a China watcher can be left high and dry if he misses the changes. In its heyday, the army was the model for all of China. Everyone was exhorted to learn from the army. When in recent years the Chinese added that the army must learn from the people, this was the Chinese way of telling the outside world that the army was falling out of favor with the leadership in Peking.
Propaganda analysis would be incomplete without a careful study of the propaganda line coming from each of the provinces and comparisons between them. Sometimes, differing lines from various provinces mean only that the local leadership is confused about what to do. In some cases, however, the differences are very meaningful. When ex-defense minister Lin Piao was still in power, many provinces said the army was founded by Mao and commanded by Lin; others said the army was founded and commanded by Mao. With the advantage of hindsight, it is clear that even well before his fall, Lin's authority had begun to erode. What is not clear is whether those provinces that failed to mention Lin in this context were merely expressing their own dissatisfaction with him or whether they were acting on instructions from leaders in Peking who were working to oust him. In this case, as in many others, China watchers will probably never know the answer. They can probably make an educated guess, however, that those provinces which say the army should "obey" the party contain military men more willing to submit to party authority than those provinces which say the army should merely "respect" the party.
The Pecking Order
Another favorite tool of the analytical trade is the scrutiny of leadership appearances. The order in which Chinese leaders are listed can be a reliable gauge of their relative standing in the leadership. The Chinese have often circumvented this system by listing their leaders in the Chinese equivalent of alphabetical order. On major holidays, the Chinese used to hold mass rallies in Peking, with the entire leadership standing before the assembled crowds. Who stood next to whom was another clue to the importance of individual leaders, but in recent years the rallies have been abandoned. Instead, several small groups of leaders appear in different parks in Peking, thus avoiding a public display of the entire pecking order.
When several important officials fail to appear over an extended period of time, it often means that a leadership meeting is in session. When at the same time the top officials in many of China's 29 provinces do not appear at home, the betting is that Peking has called in leaders from the provinces for a large meeting. In August, 1973, as China watchers awaited a party congress, Peking threw the intelligence community off the track: the national leadership attended a table tennis match, and, on the same day, a provincial leader gave a speech at home, several thousand miles from Peking. As it turned out, the party congress was in session during the time. In what was an obvious effort to hide the fact, the meeting was adjourned in midstream to allow national leaders to appear in public; the provincial leader, who obviously did not attend the congress, was elected in absentia to the party's ruling Politburo.
When all else fails, Peking resorts to outright deceit. In January, a secret party meeting elected a new party vice chairman from the ranks of ordinary Politburo members. After the meeting, in order not to tip the public, the new vice chairman was listed not among the other vice chairmen but among ordinary members of the Politburo. Thus the meeting and the new appointment remained a secret until Peking chose to reveal it.
In the hands of the wrong people, the game of appearance watching can result in widely speculative and highly sensational conclusions. When a national leader does not appear in public over an extended period of time — say a month or more — the Chinese people themselves, who watch appearances just as analysts do, invariably begin rumors about their political demise or death. On one occasion, after Madame Mao had not appeared in public for a couple of months, some Chinese devised a wild story to explain her absence: they concluded that she had had a fight, including fisticuffs, with her husband, and he had killed her. She reappeared a few days later, however, with no black eyes.
In the case of Mao, who has often withdrawn from public view for long periods, rumors of his death have plagued analysts for years. If accounts from Chinese officials and ordinary people over the years were compiled, it would appear the man has died at least 20 times since the mid-1950s. Today, he remains alive and relatively well, considering his advanced age. Reports of Mao's death naturally send shock waves throughout Washington officialdom. Because there is no way to verify or discredit these reports until he appears again in public, some China watchers have more than once been forced to conclude tentatively, and even sometimes in writing, that he was dying. With the Chinese tendency toward secrecy, it is impossible to predict how soon after Mao's actual death the Chinese will announce it. There are, of course, a few who still maintain Mao has been dead for years, and the man seen greeting foreign visitors is actually a double.
Does Logic Help?
Logic, or common sense, is sometimes the China watcher's only tool for assessing the veracity of a piece of new information. The problem is that the Chinese, who are not without common sense themselves, can often disregard it when they choose to. In July 1973, when the first report of preparations for a party congress appeared in China watchers' in-boxes, many tended to reject it. The party's anniversary had passed a few days earlier without so much as a major article in the Peking press extolling the virtues of the party. If a party congress was in fact in the offing, it was reasoned, surely the Chinese press would have made more of the party's anniversary. Additionally, the leadership was still sharply divided over a number of serious issues and showed no signs of resolving differences; the party apparatus in several provinces was still a shambles. Under these conditions, there seemed no point — indeed, it could be disastrous to convene a party congress.
The Chinese, who were obviously as aware of their problems as China watchers were, held the congress away. To be sure, the congress was something of a disappointment. Many important issues remained unresolved, and the congress seemed to raise more questions than it answered. When, in December, a secret party meeting took some major steps toward resolving some of the problems, the question was raised again as to why the congress had been held in August; it obviously would have made more sense to wait until December, when the political climate was apparently more suitable for major decisions.
Logic does not fail in every case, however, and it sometimes allows the China watcher to second-guess even top Chinese officials correctly. At the August 1973 party congress, Premier Chou En-lai announced that the Natinoal People's Congress, China's legislature, would convene "soon." At the time, the anti-Confucius campaign had just begun and was likely to cause further divisiveness among the leadership and have major repercussions throughout the country. With a major political campaign just getting under way, many China watchers believed that chanches of holding the National People's congress under these circumstances were very slim. Nevertheless, no china analyst worth his salt is going to contradict Chou En-lai and say in writing that the premier has either taken leave of his senses or does not have a firm grip on the political scene in China. Chou, as it turned out, had indeed miscalculated: the National People's Congress was not held until a year and a half later.
This was the not the first time Chou had "misspoken." Earlier, he told a western reporter that China's harvest would show an increase over the previous year. A month later, he had to retract that statement; the harvest had in fact shown a four percent drop. China analysts seldom ignore statements coming directly from Chou — with good reason. The occasional slips. however, can cause confusion.
Statements by high-level Chinese officials on the internal conditions in the country are so rare that the China watching community must pay particular attention to them, but there is cause for some caution on this score. A member of the party's ruling Politburo, in response to a question about the anti-Confucius campaigan had already caused major disturbances in several provinces and was beginning to affect the economic sector. In fact, shortly after that statement was made, the campaign was all but turned off. Its only visible result had been a decline in production, clearly not the intent of the leadership, and China watchers have a right to question whether the Chinese did in fact know what they were doing or whether they merely knew what they watned to do but were not sure they would be successful. It is also possible that the Politburo member was lying through his teeth or that, while others in the leadership did indeed know what they were doing, this person, who most observers would conclude was ultimately a loser in the political sweepstakes of 1974, did not.
While statements by Chinese officials are frequent and relatively easy to come by, China's leaders stopped making public speeches about domestic political affairs several years ago. One Politburo member tours the provinces giving addresses on agriculture, but save for these and two general wrap-up speeches by Premier Chou En-lai at major leadreship meetings in the past two eyars, no Chinese leader had gone on public record regarding internal affairs since the mid-1960s.
This situation contrasts sharply with that of the Soviet Union. In recent years Moscow had held party congresses on a fairly regular basis; the congresses hear a major address that usually drags on for hours, in which party leader Brezhnev reports on party affairs, and another long speech by the Soviet Premier on the economy. These speeches and many others delivered on less ceremonial occasions are made public. At China's last party congress — only the third since the Communists came to power — Mao was said to have made a few brief opening remarks, which were not made public. In fact, Mao has not made a public speech since 1949. While Soviet analysts chew on marathon speeches by Brezhnev, China watchers must content themselves with the brief, usually enigmatic, quotations that Mao issues periodically.
Chou En-lai's two speeches were a mixed bag of political, economic, and foreign affairs. Even at the National People's Congress, China's vehicle for reporting on and ratifying government policies, there was no separate report on the economy — at least no report that was made public.
Precedents and Past Performance
One analytical tool that has been all but rejected by China watchers is the use of precedents. The Chinese have broken with past practice on several occasions in the last two years, and China watchers have frequently been led astray by trying to predict events on the basis of past patterns. The party congress is a good example. Congresses have usually been preceded by a plenary session of the party Central Committee. The plenum, held in secret but revealed after it is over, usually issues a call to convene the congress. On its first day, Peking announces the opening of the congress and issues periodic reports during the session. The congress is usually held in Peking's grandly named building, the Great Hall of the People. Lights burning late at night in the building, and large numbers of cars, buses, and limousines parked outside are visible signs to Peking residents that a major meeting is in session.
In August 1973, however, there was no Central Committee plenum, no sign of activity at the Great Hall of the People, and presumably no congress. As China analysts watched and waited for the usual signs, Peking surprised everyone by announcing that the congress was over.
The National People's Congress of 1975, held in January, revealed another break with precedent. This meeting has usually been a public affair: banners in Peking greet the delegates as they arrive, foreign visitors have attended, and the press builds up the event with frequent references to it. On several earlier (and abortive) attempts to hold the conclave, the press did indeed refer to it, and more than once the New Year's Day pronouncement from Peking indicated it would be held within the year. This year, the New Year editorial ignored it, but the meeting was secretly held two weeks later.
In an important departure from the standard way of doing business, widespread personal attacks on high ranking party and military officials throughout 1974 have thus far had no visible effect on their political health. During the Cultural Revolution, if an official was publicly criticized in wall posters, this spelled the end of his political career — in most cases he was either about to fall or had already been stripped of his power. Officials attacked in wall posters last year, however, adopted a very casual attitude toward the process; some even went out of their way to point out the posters to foreign visitors. None of those attacked last year, including some who came under extremely heavy fire in several different provinces, have been purged. Today, wall posters are apparently not as damaging as they were a decade ago, but China watchers were misled into thinking one of the party vice-chairmen was purged because he was widely criticized in posters.
Directives from Peking, in essence the laws of the land, are usually a good way to gauge the intentions of the leadership. Ironically, as knowledge of the contents of these directives has increased, thanks to clandestine collection efforts, the number of directives issued each year has steadily declined. From some 90 in 1971, to perhaps 60 in 1972, to 44 in 1973, the number hit an alltime low of approximately 27 last year. With such a large country to manage, presumably there are a number of issues demanding the attention of the leadership and requiring specific and authoritative instructions from Peking.
Disagreements in the leadership over a number of questions may have contributed to the declining number of Peking directives. In some instances, these differences manifest themselves in contradictory directives. The occasional reversals are usually short-lived and have not affected the general trend of events, but they raise important — and puzzling — analytical questions. How can one faction in the leadership be strong enough to push through a directive one day but be unable to get it enforced the next? How can they block a personnel appointment for months but suddenly be powerless to stop it? And who, in fact, are "they"?
Last year, most directives from Peking set strict limitations on the conduct of the anti-Confucius campaign: officials could not be criticized by name; wall posters, written by the general populace to expose the "crimes" of unnamed officials, could not be posted outside public buildings where foreign visitors could see them; and people were not to bring their complaints to Peking but were to stay in their provinces and resolve their differences at home. Suddenly a new directive was issued which said just the opposite: it was all right to attack officials by name, posters could be put up anywhere, no effort was to be made to prevent foreign visitors from reading them, and the people were invited to come to Peking to express their grievances.
Taking Peking at its word and acting in accordance with the latest official directive, a number of people descended on Peking, mounting posters throughout the city attacking several important officials by name. The poster writers were quickly suppressed: they were harassed, and sometimes jailed, by the security forces, and their posters were often torn down as soon as they were put up. The poster writers were then sent home to their provinces, and from then on the campaign proceeded as though the latest directive had never been issued. If the new directive came as a surprise to China watchers, it must have been an even greater surprise to the unfortunate people who acted on it and got themselves arrested for following Peking's latest instructions.
There are times in the China business when having solid information about a particular event is more confusing than it is enlightening. If the event is reported in the western press, it can even be a nuisance. For example, a large meeting was held in Peking in the summer of 1973, as China watchers were looking for signs of a party congress. Because the meeting was public, reporters got wind of it and accounts of the meeting appeared in the western press. China watchers knew the meeting was not a party congress — it was too large — but do not know even today what that meeting was all about and some wish they had never known of its existence.
Despite the vicissitudes of China watching, analysts in some cases are better informed about the situation in China's provinces than China's own national leaders are. As early as 1970, for example, it became obvious to China watchers, through intelligence reports and provincial radio broadcasts, that urban youth sent to live and work in the countryside were being consciously discriminated against with the acquiescence of local authorities. The situation seemed to come as something of a shock to Mao, when he first learned of it in 1973. A school teacher, with a son out in the country and apparently with contacts who could see that messages got to the leadership, sent a letter to Mao describing the living conditions of urban youth in the rural areas. Mao was outraged and ordered that steps be taken immediately to end discrimination against these young people. Not until 1974, however, after Peking had long since issued yet another directive on the subject, did local authorities begin to move on this question.
Cases of major disruptions or flagrant disobedience in the provinces, of course, eventually come to Peking's attention. In such cases, national leaders acting as trouble shooters often visit the province in question to help solve the problems. In this context, discrimination against urban youth is a relatively minor problem and one that is not likely to reach the ears of China's leaders on its own. Local officials, after all, are not going to report to Peking that they are deliberately giving urban young people a hard time, but this is exactly the kind of information that refugees are best qualified, and most likely, to report to China watchers. Paradoxically, the intelligence community can beat the Chinese leaders on this issue, not one of especially high priority, while the Chinese can consistently outfox us on the major issues that we watch so closely.
In addition to the usual analytical problems, Peking has two enemies — Moscow and Taipei — who insist on inundating the world with disinformation. China watchers can usually quickly discern and discard the more obvious fabrications, but the press is less discriminating. Lies often become accepted as facts simply because they appear in a number of western newspapers. The heavy-handed disinformation tactics have often led China watchers to disregard any information coming from either Moscow or Taipei. This is unfortunate, because on several occasions they have both come up with sound, accurate, and important information. The Chinese Nationals somehow manage to get the full texts of a number of Peking directives, and these are not hard to distinguish from those that they fabricate. The Soviets, for their part, scooped everyone on the election of a new member of the Chinese Politburo and also correctly predicted the precise dates during which the National People's Congress would be in session. China watchers must be careful not to throw out the baby with the bath water.
With all the ins and outs of China watching — the layers of secrecy, the shifting political winds, the analysis of obscure propaganda articles, the scrutiny of leadership appearances — those less close to the China scene are tempted to view the China problem as insoluble and to write the Chinese off as "inscrutable." China watchers, of course, do not have that luxury, and most of them would disagree that the Chinese are impossible to understand. It may seem ridiculous to others that China watchers learned to distinguish military officers from enlisted men, when ranks were abolished and insignia removed, by the number of pockets on their tunics, or that some China watchers have noticed a remarkable correlation between those Chinese leaders who wear sunglasses in public and those who eventually lose their jobs. That is, after all, the unique feature of the China watching business: there are almost no clues that are not worth following up. On those rare occasions when there is solid information about a major development, the often divided China watching community can usually agree on its implications and on Chinese motivations. It is not hard to understand the Chinese; it is just hard to get information about them.
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