Chou apparently hopes, not to displace the Army completely from its political role in the provinces which would be impossible, but to integrate the politically crucial elements of its leadership into the new, nationally oriented party that he is building. He also hopes to shift the emphasis of the Army's activities away from politics, at least of the self-generated kind, and in the direction of tasks directly related to national defense. For this purpose he has found the Soviet threat a useful atmosphere, although a man of his intelligence must inevitably also regard it as a genuine threat to be managed with the utmost caution.

It appears that Chou has already had considerable success with his domestic program and that military leaders sympathetic with it are gradually tending to displace others in key positions and provinces. Like all human undertakings, however, the program is unlikely to be completely successful, and China may never again be as effectively centralized as it was during the decade preceding the Cultural Revolution. On the other hand, there is no necessary reason why, even after Mao's death, the Chinese leadership should be in turmoil to the degree that prevailed during the Cultural Revolution.

Chou has been making even more obvious progress in the external aspects of his game plan. By now China has gone far enough toward creating, with little publicity, a minimum nuclear deterrent and toward normalizing, with maximum publicity, its external relations, so that the Soviet Union is effectively restrained from attacking it under any likely circumstances.

The present tense relationship with the Soviet Union is likely to seem unviable to Chou as a long-range condition, however, and he may hope to defuse the dispute and put Sino-Soviet relations on a more normal footing. For this purpose he probably needs some Soviet concessions on the border issue, if not on the broader territorial question, much as he needs further concessions from the United States on the Taiwan and Indochina questions if he is to put Sino-American relations on a more stable footing, as I believe he would like to do. To date, at least, there is no convincing evidence that the reescalation of the war in Vietnam resulting from the North Vietnamese invasion of South Vietnam at the end of March 1972, has gone any further than the escalation of 1965, in complicating Sino-American relations or toward pushing Peking and Moscow closer together.

The current Chinese leadership may believe that China's major longrange external problem will be not the United States or the Soviet Union but Japan, even though Chou realizes that Japan is not now the threat that Chinese propaganda for various reasons paints it as being.

The essence of current Chinese policy toward Japan appears to be to give Tokyo, via a liberal application of stick and carrot, a sense of greater stake in improved relations with China than in a unilateral forward Asian policy designed to fill whatever partial vacuum may be created by American disengagement under the Nixon doctrine. In this, Peking is having considerable success, but it has been less fortunate in the economic field. Like some other Asian countries, China has become uncomfortable about Japan's share in its foreign trade, which has passed the one-fifth mark and is still growing. Here lies the main hope for at least a modest growth of Sino-American trade, mainly in the field of high technology American products.

As far as can be seen now, China will succeed in maintaining at least a viable level of political unity and effectiveness, will develop its civilian economy at a modest rate without either a collapse or a breakthrough, and will give its conventional and nuclear military capabilities a somewhat higher priority and improve them at a more impressive rate. China's overall economic backwardness will not prevent it from generating advanced sectors of great sophistication. Current American policy is based on the assumption that China, if not threatened itself, will not be a serious threat to Asia, or to American interests in Asia, even given the reduced American military presence in the region visualized under the Nixon doctrine. Although this is a reasonable assumption on the basis of the record, it is only an assumption.

The record was written when China did not have a nuclear deterrent of its own. The assumption is one that Moscow appears unwilling to accept; the Soviet buildup along the Chinese frontier began to occur at its maximum rate after the announcement of the Nixon doctrine, a fact suggesting that one of the buildup's purposes is to pin China to the border and discourage any possible Chinese effort to take advantage of American disengagement.

Whether an active threat to Asia or not, and whether continuing to be preoccupied with the Soviet menace or not, China will continue to be a major problem for and influence in Asia by virtue of its size, its potential power, its political dynamism, and the simple fact that it is and always will be "there." Assuming that this projection is approximately correct, and assuming that no two of the other major powers combine against it, China will probably play an active and effective role in the multilateral balance of power in Asia which it is one of the aims of current American policy to foster. Although China will probably be less of an adversary of the United States than it has been in the past and will probably engage in some cooperative undertakings with it, especially in the commercial field, Sino-American relations are not likely to take the form of wide-ranging cooperation or any form of alliance.

Thank you.

Chairman PROXMIRE. Thank you very much, Mr. Hinton.
Mr. Dorrill, please proceed.

STATEMENT OF WILLIAM F. DORRILL, DIRECTOR, EAST ASIAN CENTER, UNIVERSITY OF PITTSBURGH

Mr. DORRILL. Mr. Chairman, I am honored by your invitation to appear before this committee which has made such an important contribution in its hearings and publications to our understanding of contemporary China.

As one who is engaged in the scholarly study of contemporary China, I am appreciative of and have a great admiration for the recently published compendium of economic assessments of the People's Republic of China. I think this will not only enlighten the American people but also make interesting reading for Peking officials as well.

There are three questions I would like to focus on in this statement, and I must say that as a professor traditionally timed for 50 minutes, I approach the time limitation with trepidation.

The first is, "How should we evaluate economic policies and performance?" Second, "How can we assess future P.R.C. economic trends and priorities?" And, third, "Is the People's Republic a threat to the United States?"

Now in dealing with these problems, I shall be primarily concerned with the interaction of noneconomic with economic factors so as to place these very excellent analyses in a broader social and political

context.

How should we evaluate P.R.C. economic performance? It seems to me that the desirability of going beyond the purely economic dimension is particularly necessary in attempting evaluations of this sort. Over the past decade my impression is that outside assessments of the Chinese economy have tended to understate its accomplishments, in part, because these evaluations were too narrowly confined to Western economic criteria such as the assessment of per capita income growth. Seen in these terms, of course, the Great Leap Forward and Great Proletarian Cultural Revolution were viewed as irrational or, as one of the authors described the former, a "mad policy" full of “hairbrained" schemes.

But how do the Chinese actually view these policies, since it is, after all, their expectations that have to be fulfilled if the system is to function effectively?

I think we have to recognize that the Chinese under Mao have deliberately rejected the classical Western pattern of industrialization. While seeking to develop a modern socialist state, they are determined to avoid what they call the three great differences that have arisen in Western societies during the process of industrialization—that is, the differences between rural and urban life, between industry and agriculture, and between mental and manual labor.

Mao and his followers are very fearful that economic growth and technological advance and mass production will come to be objects in themselves, that they will dominate the thinking and motivation of their society, leading to increasingly sharp divisions of labor and to a surrender of the decisionmaking power to a new class of technocrats, much as they think has happened in the Soviet Union.

Thus the regime leaders over the past 20 years have resorted to periodic mass campaigns. I think there has been some opposition to this strategy, perhaps in the case of Liu Shao-chi and others or at least some foot-dragging, but essentially these campaigns have been designed to stimulate ideological fervor, insure equality of participation by all elements in society-especially the peasantty-and to foster a political order able to provide for material needs but guided essentially by moral rather than material incentives.

The result of this permanent revolution which I think has been waning since mid-1968 and probably is in long-term decline, obviously has not been to maximize the "production possibility curve" that Mr. Ashbrook has set forth in his paper.

However, P.R.C. economic policies operating within these constraints have permitted an impressive growth in industrial production-11 percent annually if we take the whole period 1949 to 1970and also a gradually rising standard of living for the population as a whole.

More important, from the Maoist viewpoint, these policies have dramatically affected the quality of life in China, broadering political

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participation, promoting economic, social and cultural equity and lessening the differences between urban elites and peasant masses.

This has also been accompanied by a spread of basic technology (including things like public health), continued growth in agricultural output, expansion of small-scale industries, the acquisition of a nuclear capability and a strengthening of China's international finance and trade position.

I think it is even possible that the Chinese have developed an experience that may be applicable in some respects to more advanced industrial societies-for example, in keener sensitivity to the problems of human displacement and environmental pollution and in seeking to relate economic growth to the overall enhancement of the quality of life.

Now, in acknowledging these achievements it is not my purpose to minimize the costs which have been very high in terms of intellectual and cultural freedom, not to mention maximizing per capita gross national product. Rather, I want to suggest that our criteria should measure economic policies and performance against a broader spectrum of political and social as well as economic objectives.

If we are going to further recent trends toward a normalization of relations, I believe our policies must be better informed as to how the Chinese view their own economic performance and as to the extent of their overall achievements whatever the shortfalls in this or that sector.

For too many years American policies were predicated on the false assumption that the Chinese masses were seething in discontent and ready to roll back the Communist regime at the first opportunity. In this prevailing negative mood we often underestimated its accomplishments and sometimes exaggerated its failings. Worse still, we continued to magnify the Communist military threat to the U.S. long after the Sino-Soviet rift and internal preoccupations in the P.R.C. had begun a fundamental alteration of our strategic relationship.

Now, perhaps, the danger is that our perceptions of China will become captive of a pendulum swing in the other direction toward overestimating their achievements, minimizing their failures and ignoring the basic differences in philosophy and purpose which still separate us and which, in combination with external pressures and internal frustrations, could lead again from cooperation to confrontation.

The second main question I am posing today is "How can we assess the future economic trends and priorities in the P.R.C.?" Here, to summarize briefly, I am simply trying to make a case to urge that longer-run forecasting be attempted in the economic field.

Practically all of the papers make excellent and very reasonable short-term trend projections but I think that, even in the short-run, extrapolating from present events a trendline can be extremely hazardous. Moreover, I think in terms of our long-range policy planning, and especially in terms of defense outlays and military expenditures in the future, we need longer-range forecasting.

Perhaps the method that Mr. Aird used in extrapolating a range of alternative future population models or scenarios could be usefully applied to the Chinese economy as a whole, although this would, of course, involve a complex series of noneconomic as well as economic assumptions.

Whatever the validity of this long-range forecasting approach, it does seem to me that Chinese policies will be shaped by broad economic factors which can be fairly clearly foreseen.

As Ashbrook suggests, the food-population balance will almost certainly be the most critical of these, and since fertility reduction policies are not likely to give much relief from population pressures, the regime's ability to raise productivity in agriculture will be absolutely essential to maintaining this balance.

But to go beyond that, although agricultural output will obviously be affected by economic factors like the import of foreign technology and competition of the military for scarce resources, I believe the noneconomic or institutional factors might play a more decisive role. Will the political leadership remain unified and stable and will it maintain a general policy orientation that is pragmatic and functionally rational whatever the rhetoric? Will moral-ideological incentives be sufficient to provide motivation for the producing masses and, at the same time, limit their consumption to an amount that can be sustained by a level of agricultural output which leaves significant savings for investment in industry?

We urgently need more concentrated and systematic research on these complex and long-range issues even if there is no guarantee that conclusive answers can be found.

I would like to skip in this prepared statement now down to the third point, whether China constitutes a present and future threat to the United States.

While the state of the economy can have a pronounced effect-I don't think that economic circumstances determine intentions in a particular situation. I see no correlation in previous Chinese behavior between domestic economic success or failure and external policies of cooperation or hostility.

Similarly, while P.R.C. foreign and military policies are influenced by Chinese reaction to perceptions of external threat-for example, fears of a hostile U.S. encirclement from the Pacific or of a pre-emptive Soviet attack on the north, I believe Peking's international goals and strategies have been developed independently and, except for tactical fluctuations, remain basically unchanged. In other words, I disagree with those who feel that Chinese policies have been merely reactive to fears of the outside.

Peking aspires first, I believe, to defend China's territorial integrity. Chairman PROXMIRE. You have 2 minutes left.

Mr. DORRILL. Fine.

The P.R.C. still aspires to maintain its territorial integrity and unify the nation; it still aspires to a role in Asian and world affairs commensurate with China's size and historical prominence; and it still intends to support world revolution by means of "wars of national liberation," but the speed and intensity with which these goals are pursued will depend on the general orientation of the prevailing leadership at a given time.

Peking's strategy has never been overtly expansionist and has been in practice cautious and prudent in execution.

Thus, briefly, in the short run, I don't think that China is a threat. In the long fun, however, I see certain problems relating to its behavior as a nuclear power and its dedication to support of wars of national liberation which I feel will be with us for some time to come.