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views of China had moderated in the last few years. Speaking with Russians, say, 3 years ago, they tended to be very paranoid about the People's Republic of China. But this time—and this was a newspaper person's comment-it was a much more rational discussion about China, which is so much the better.

Senator FULBRIGHT. Well, I can understand Russia's paranoia because they feel guilty having taken some of their land and they don't want to give it back. I don't expect they will, but with nuclear weapons these old-fashioned quarrels over a little land don't make much sense any more-if they ever made any? With either or both having nuclear weapons those types of conflict don't really make any sense at all do they?

Mrs. KALLGREN. Well

Senator FULBRIGHT. Any more than our war in Vietnam makes any sense. It is just inconceivable to me what they are fighting about now, why we are killing people. Do you have any suggestion on that, that could enlighten us?

Mrs. KALLGREN. I don't think so; I don't think so. I do think that the Vietnam war does pose certain problems between the Russians and the Chinese, and I would take some of the Chinese statements, the most recent ones, as not having only ourselves as an audience but the Russians as an audience. The same might be said about Podgorny going to Hanoi. I would think that is an issue we would want to take into account, as well as the Chinese national security purposes.

Senator FULBRIGHT. Take into account what purpose? This all has, I suppose, a relation to our own policy. How do we take that into account?

Mrs. KALLGREN. Well, I think it is perfectly true that the Chinese have heightened the language with which they are commenting on American on the renewed bombing. But I would think that the timing of that statement, tied into the visit of Russian leadership to Hanoi, would simply be to bring to the fore the fact that the Chinese are very much behind Hanoi at a time when negotiations are obviously going on in Hanoi both on terms of aid and a variety of other matters.

Chairman PROXMIRE. Could I just say that I want to take at least partial issue with the chairman of the Foreign Relations Committee and with the majority leader, both of whom downgraded the significance of GNP. I would agree with respect to quality of life the GNP is an unsatisfactory measure. You can only sleep in one bed; you can only eat three meals a day; you can only wear one suitsomebody has five or 10 or 15 suits; he doesn't have 15 times the happiness or 15 times the opportunities, really, to enjoy life. But I think the GNP has immense significance as far as our relevant foreign policy considerations are concerned. It does measure much better, not precisely, but much better, the military potential of the Chinese economy and I don't think we ought to ignore that or downgrade it.

The fact that they have a far smaller gross national product than we have, I think, does represent to some extent their capability to threaten this country and to threaten their neighboring countries. Furthermore, we have so much fat from which we can draw to increase our military; we found that in World War II; we just stopped building automobiles and started building tanks. We led a more austere life. The Chinese are already leading a more austere life; they can't squeeze it down considerably anymore, so these are important considerations in that respect.

I think Senator Fulbright and Senator Mansfield are right; we can't measure whether they are happy; we can't measure whether this is a satisfactory life for them. We can't measure that kind of thing.

I would like to ask Mr. Wu once more, because I think this is so central, and you are a scholar I respect and you have worked in this area in the Defense Department and elsewhere:

The basis on which we could consider China even a potential threat to this country-let me indicate one of the things that is in the back of my mind. We had the Defense Department appear before my subcommittee of the Appropriations Committee asking for funds for our military mission in the Philippines, and I said now who is really threatening the Philippines?

After all, who has got a navy that would threaten the Philippines? The Chinese couldn't possibly represent any kind of a threat. They don't have the economy to build a navy to do this.

So, once again, I would like to ask you, Mr. Wu, because I do respect you, if you can give me not a generalization about how sometime in the future they may represent a threat outside of contiguous border countries, but any kind of hard evidence that with such a much more primitive industrial development they could represent a threat to the United States of America that would justify our expending the billions of dollars we do to prevent this so-called peril?

Mr. Wu. I would like to make three points on this:

First, I don't think that there is a direct military threat to the United States or there could be a direct threat in the foreseeable future, given Chinese capability, et cetera.

Secondly, I think that the threat that China poses is more indirect in the sense that other countries may believe that China is powerful, is able to do certain things, that the U.S. position has deteriorated and it is losing interest in Asia and so on and because of that perception of theirs, whether correct or not, they may choose certain policy options which would then alter the entire environment within which our policy could be implemented. That is a very potential thing and that is right there now.

The third point I want to make

Chairman PROXMIRE. On that point, however, isn't it true that our military action in Vietnam is a negative factor, our display of enormous power under these circumstances is alienating the people in Asia rather than encouraging them?

Mr. Wu. I would say that that depends upon whether we are talking about the entire history or particular acts or particular periods.

Chairman PROXMIRE. Right.
Mr. Wu. Let me make my third point.
Chairman PROXMIRE. All right.

Mr. Wu. The third point is that whatever Chinese capability can get to, it is hard to define and to estimate, that, we may underestimate Chinese potential capabilities because we may overestimate Chinese weapons' costs; to them the cost may be much less. Secondly, Chinese R. & D. has always adopted the policy of bypassing certain steps and you may have completely unexpected turns; and, fourthly

Chairman PROXMIRE. Well, on weapons' costs you still have to have the steel industry; you have to have the electrical industry; you have to have the fuels; you have to have all kinds of things for which China has not developed the kind of economic potential and is unlikely to for some years, if you compare it with the Soviet Union and the United States.

Mr. Wu. My last point is that the potential capability of China in the military area is more limited, if it is limited by specific constraints, than by general constraints in terms of GNP proportion and financial resources. The crucial question is whether specific things like certain types of steel, certain types of computers and so on are available or not. It is that kind of constraint.

Chairman ProXMIRE. Well, I thank you very much. Do you have anything further?

Senator FULBRIGHT. Just this last question: If you assume, of course, that the differences of view and conflicts among countries are going to be solved by military means, as in the past, all of this is very significant; but it seems to me with the development of atomic power that this really is an obsolete way to regard it. The real challenge from China or from other countries could be not so much a military threat but there is a real challenge if she should succeed in creating a just society that you referred to, Mrs. Kallgren. If people did feel that they had achieved a degree of equity in their relations among themselves, and with their government; if they do achieve a minimum of corruption among their leaders and in their society, on which we are told they have made progress; or a minimum of crime, filth and all the things that plague some of the more industrialized societies, this will create a real challenge in that the real danger to traditional society is in this area more than their capacity to build Tridents and B-l's and atomic bombs. Applying the traditional method of settling differences to a nuclear age seems to me to be quite a false way to approach it. I think the challenge comes in this other way—if they are really making the kind of progress that some have suggested, among them, Mr. Service. Do you think that has any validity? If that is true, then we should consider very carefully responding to every request of the Pentagon not devote so much of our efforts to that area which may not be on the target at all.

Chairman PROXMIRE. I might say either way, either way, take either your assumptions or mine, and I think your assumptions are much superior; I think there is no question that the real challenge of China is they may develop a just society which has great appeal throughout the world in terms of honesty, in terms of egalitarianism and so forth.

Senator FULBRIGHT. Much more likely.

Chairman PROXMIRE. Even if you ignore that, even if you take it on their grounds, is my point; if you view China as a nation that is determined to attack us militarily and to pour everything they can into the military, that kind of threat is still a myth. It is a myth; we are wasting our money; we are throwing it away.

Senator FULBRIGHT. I would certainly agree with that.

Chairman PROXMIRE. Either one you take, you can just take your choice. You don't have to assume China is going to develop into

some kind of a idealistic society; even if it is the worst, we are still throwing our money away on the William Randolph Hearst nightmare.

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Senator FULBRIGHT. I would agree with that, but, nevertheless, that is the current policy in most respects. We give the greatest emphasis to the military, more than anything else in our society.

Chairman PROXMIRE. That's right.

Senator FULBRIGHT. Whatever we may assume about their capacity; even if they had the capacity, I think they are too intelligent to go down that road. (Laughter.]

Don't you—wouldn't you agree, Mrs. Kallgren? Chairman PROXMIRE. “You asked me first. [Laughter.] I don't think it is a matter of (a) intelligence. We were told by one witness this morning, Professor Lattimore, that nobody knows what is going to happen in China. He said the one thing you can't predict is what happens in a revolution when the revolutionary dies. We don't know. We can't make any assumptions. They can go either way.

I say either way they go, we shouldn't-and people, our society, instead of rebuilding our cities, instead of providing the kind of resources we need to correct pollution and improve our health and education, we tragically err by building an enormous military arsenal to confront a threat that is not there.

Senator FULBRIGHT. I agree with that. We are in agreement on that.
Chairman ProXMIRE. I am sorry, Mrs. Kallgren.
Mrs. KALLGREN. I agree with you, sir.

Chairman PROXMIRE. It is a happy note on which to end our hearings this morning.

Thank you very much. You both have been excellent witnesses with fine statements and excellent responses. The committee will stand in recess until 10 o'clock tomorrow morning.

Our witnesses tomorrow will be Prof. William Dorrill, chairman, Asian studies program of the University of Pittsburgh; Prof. Harold Hinton, Institute of Sino-Soviet Studies, George Washington University; and Colonel Fraser, U.S. Marine Corps.

(Whereupon, at 12:35 p.m., the committee was recessed, to reconvene at 10 a.m., Thursday, June 15, 1972.)

ECONOMIC DEVELOPMENTS IN MAINLAND CHINA

THURSDAY, JUNE 15, 1972

CONGRESS OF THE UNITED STATES,
JOINT ECONOMIC COMMITTEE,

Washington, D.C. The committee met, pursuant to recess, at 10:05 a.m., in room S-407, the Capitol Building, Hon. William Proxmire (chairman of the committee) presiding.

Present: Senator Proxmire. Also present: John R. Stark, executive director; Loughlin F. McHugh, senior economist; John R. Karlik and Courtenay M. Slater, economists; Lucy A. Falcone, research economist; George D. Krumbhaar, Jr., and Walter B. Laessig, minority counsels; and Leslie J. Bander, minority economist.

OPENING STATEMENT OF CHAIRMAN PROXMIRE

area.

Chairman ProXMIRE. The committee will come to order.

Today we conclude, for the time being at least, the present set of hearings on the economy of China. We held these hearings to review with independent experts the committee's compendium "People's Republic of China: An Economic Assessment."

All seven of our first 2 days' witnesses said that fear of her neighbors was the most compelling feature governing, the Chinese military posture. Vietnam and Soviet Russia are the principal focus of China's concern, and the sooner our military presence in Southeast Asia is ended, the more likely we are to achieve real peace in that troubled

Our first witness this morning is Prof. Harold Hinton, professor of international relations and member of the Institute of Sino-Soviet Studies, George Washington University. Professor Hinton did his doctoral work at Harvard University. He has an impressive list of publications, particularly emphasizing Chinese foreign relations: China's Turbulent Quest,” with recent emphasis on Chinese-Soviet relations: “The Bear at the Gate."

Prof. William Dorrill, director_of the Asian Center and Asian studies program, and chairman of East Asian languages and literature at Pittsburgh University, also received his doctorate from Harvard, as did several other witnesses. Incidentally, gentlemen, I have been working on that Harvard doctorate since 1946, completed all my requirements, and I have been trying to write my dissertation ever since, 25 years on that dissertation, but haven't gotten past the first chapter.

Professor Dorrill has made a definitive study of the early formative years of Chairman Mao's political career. He has contributed to many

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