HW 355355 POP SECRET PibaAk RUMANIA OPENS DOORS FOR COOPERATION WITH YUGOSLAVIA Rumanian party First Secre- tary Gheorghiu-Dej arrived in Belgrade on 22 November as leader of the highest ranking group from the Soviet bloc to visit Yugoslavia since its rapprochement with the bloc be- gan nearly two years ago. Al- though ostensibly for the pur- pose of signing an agreement for construction of an ambitious hydroelectric and navigation project on the Danube border --the so-called Iron Gate-- the eight-day visit will un- doubtedly be the occasion for party and governmental talks on a wide variety of subjects. For Yugoslavia, Dej's visit will complete the process of re- establishing contacts at a high level with all the states of the Soviet bloc. During the past _ year, Khrushchev, Bulgarian party chief Zhivkov, and Hun- garian party First Secretary Kadar have visited Yugoslavia. Tito has been to the USSR and Hungary and is expected to visit Poland in the spring. Visits by delegations at the politboro level have already been exchanged with Czechoslo- vakia and Poland, and Belgrade sent an important delegation to East Germany's party congress last January. While Rumania did not par- ticipate in the last anti-Yugo- slav campaign as heartily as 22 Nov 63 CURRENT INTELLIGENCE WEEKLY REVIEW The Comsunist World most bloc states, it has lagged behind these states in recent months in improving its relations with Yugoslavia. This demonstra- tion of reserve toward Belgrade has complemented Bucharest 's failure to attack the Chinese directly in the Sino-Soviet dis- pute and has apparently been intended in part to demonstrate Rumanian independence from the USSR. Before accepting Tito's in- vitation Dej reportedly insisted on certain economic preconditions, the Iron Gate agreement being the most significant. The con- trast between Bucharest's tough internal orthodoxy and Belgrade 's relatively liberal domestic policies has apparently also been an impediment tocloser Yugo- slav-Rumanian relations, Now, the fact that both coun- tries, Yugoslavia more so than Rumania, refuse to subordinate their national economic programs to Soviet bloc interests pro- vides a basis on which their re- lations could be rapidly improved. Both countries obviously attach considerable importance to the visit. The Rumanian delegation includes four key regime figures . in addition to Dej, and there has been an enthusiastic press build-up in both states. (CON- FIDENTIAL) Page 7 —FOP-SECREF DINAR DoclId: 327401316 Page 16
she Communist World SATELLITES: UNDERMINE GDR * s POSITION ON BERLIN The. terms of trade agreements concluded between several East European countries and West Ger- many undercut basic East German positions on the Berlin and Ger- man questions. This development reflects the greater willingness of the East European countries to put their national interests ahead of those of the Soviet bloc and has the effect--whether in- tentional or not--of isolating the GDR from its Eastern neighbors on the Berlin issue. Both the Rumanian trade pro- tocol with West Germany-—-initialed on 17 October--and the Hungarian agreement signed on 9 November contain a "Berlin clause"--i.e., a declaration that the agreement is applicable to the currency. area of the Deutsche Mark West, which includes West Berlin. They resemble the Polish - West Ger- man agreement signed last March which included a secret protocol to this effect. . Any public acknowledgment of West Berlin's ties with the Federal Republic is anathema to the East German regime, which maintains that West Berlin is an entity separate from the Federal Republic. The USSR also has pressed Bonn hard to avoid any reference--any written one, at least--to this subject in con- nection with the Soviet - West German trade agreement. In addition, :-the opening of West German trade missions in Eastern Europe will detract from the GDR's claim to be the sole representation of Germany in the satellite capitals. The situation is aggravated from the GDR's point of view by the fact that the new West German offices will have a semidiplomatic status. Walter Ulbricht displayed his annoyance in a speech on 11 November to the GDR State Council in which he commented on Bonn's "more flexible tactics" toward Eastern Europe. "The reduction in tensions is being exploited by imperialist forces in Bonn," he said, ”to penetrate into the GDR and the people's democratic countries by changed methods.” While the East German leader did not expressly refer to the recent West German trade pacts, this is the one area where the more elas- tic policies forecast by West Ger- man Foreign Minister Schroeder in August 1962 have shown results for Bonn. In the case of the Rumanian agreement, Bucharest reportedly = took careful steps to keep the GDR--and perhaps the USSR--in the dark on the progress of negotia- tions. The British minister in Bucharest had heard that the GDR Embassy was "extremely discomfited" by the signing of the agreement and expected a new chill in East German - Rumanian relations, already none too cordial. Meanwhile, Czech party leader Novotny has also made a bid to ne- gotiate am exchange of trade mis- sions. .with Bonn. Bulgaria, too, has shown a willingness for talks and may have begun negotiations this week. Berthold Beitz, Krupp's effective and ubiquitous general manager, was in Sofia in September as a guest of the Bulgarian premier and has been invited to visit Czech- oslovakia in December. Negotiations for the renewal of the Soviet - West German trade agreement are tenta- tively scheduled for January. (SE- CRET NO FOREIGN DISSEM) 22 Nov 63 HW 55355 DBocld:32401316 Page 1? CURRENT INTELLIGENCE WEEKLY REVIEW TOP SECRET DINAR Page 8
HW 355355 S DoclId: 32401316 COMMUNIST CHINA'S LEGISLATURE CONVENES IS SECRET == ns With little to brag about, the Chinese Communists again this year are holding their rub- ber-stamp legislature, the Na- tional People's Congress (PC), behind closed doors. It convened in Peiping on 17 November, at— tended by Kao, other top leaders, and more than 1,000 delegates including some Overseas Chinese. Past NPC meetings have lasted from 11 to 25 days. Before the collapse of the Leap Forward in 1960, the KPC had been a major annual forum for publicly boasting about achieve- ments and for presenting national policy. It did not meet at all in 1961, however, and the 1962 session was held in secret. This year’s session, originally scheduled for the second quarter, was postponed, partly because it would have inter- fered with preparations for the 5 July confrontation with the So- viets in Moscow. The opening of the session was preceded by secret meetings on 15 and 16 November of the Supreme State Conference, a se- lect forum often used by the chief of state to publicize ma- jor policy pronouncements. This time, however, Peiping merely announced that Liu Shao-chi. in his capacity as chief of state, and Premier Chou En-lai had made "important speeches on the pres- ent international and domestic situation and future tasks." The agenda of the NPC has not been announced, but Foreign Minister Chen Yi told a group of visiting Japanese newsmen on 28 October that the meeting would deal chiefly with economic ques- tions. These include a "new na- tional economic program,” which, 22 Nov 63 CURRENT INTELLIGESCE WEEKLY REVIEW The Communist World according to Chen, may involve a stretch-out of the existing ‘k Pire-Year Plan (1963-67) schedule - to 2 seven= or ten-year period. Ybe leadership probably sees bene- fits im setting goals far enough im the future to relieve the re- gime of pressure to show immedi- ate results. Gze of the few surprises of tbe EPC thus far has been the an- pouncenent that Vice Premier Li Wa-chus presented the keynote - He had been out of pub- Lie wiew for four and one-half moztiks . Li's report,describing the eco~_ monic situation in 1963 and the 1964 plan, was followed by a financial regort by Vice Premier Li Hsien- mizn. Their reports probably were cast im highly somber terms to cosdition delegates for a con- tixuation of hard timese Late- sezson floods reduced the food- grzim harvest probably to a level slightly less than the mediocre harvest of 1962. Whe prospect of a decline in the already meager food rations has made regime pronouncements understandably more cautious since mid-September. For example, Chou En-lai on 1 October spoke only of a “trend of general improvement" Since the disaster years of 1959- 61, made no comparison between 1963 and 1962, and admitted that "there _ is po lack of shortcomings and mis- © takes in our work." Chen Yi re- cently said that 1964 will be an- other year of economic "readjust- ment,” a euphemism the Chinese have been using in the past three years to describe the severe re- tremchment. (CONFIDENTIAL) Page 9 —TOP SECRET DEXAR- Page 135
we ee DoclId: 32401316 ‘in December. PEIPING SEEKS LARGER FOOTHOLD IN LATIN AMERICA The Chinese Communists have recently stepped up efforts to develop more press and trade representation in Latin America. Lacking diplomatic recognition by any Latin American country .except Cuba, Peiping has been forced to depend on its New China News Agency (NCNA) offices and unofficial commercial missions to support political and sub- versive efforts. Mexico, the center for Com- munist subversive activities in Central America, is currently the target for renewed Chinese approaches. A Chinese trade fair is scheduled to open there A delegation headed by Kuo Mo-jo, a high- ranking cultural propaganda specialist, will be in Mexico City to open the exhibit. Kuo is the most important Chinese official ever to visit Latin America--except for Cuba. The fair is the largest such venture on the mainland to date. This year China has signed agreements to purchase 300,000 metric tons of wheat and 16,000 bales of cotton from Mexico. These transactions, although comparatively small, are a dra- matic increase over the negligi- ble Sino-Mexican exchange in 1962 and would provide a talk- ing point in attempts to estab- lish permanent Chinese trade representatives in Mexico. Two 22 Nov 63 CURRENT INTELLIGENCE WEEKLY REVIEW - The Communist World YEK Act 6 (1) (B) NCNA correspondents who arrived in Mexico City last July on tem- porary visas are still there and may be trying to set up a perma- nent office. The Chinese trade: fair may move on to Brazil after its Mexican engagement. Last July a Chinese delegation met with officials in Brasilia to dis- cuss the possibility of a cul- tural and trade exhibit in Sao Paulo and_other large Brazilian -cities. more than nine Chinese were scheduled to go to Rio, apparently for an exhibit, and that Peiping will send two vnofficial trade rep- resentatives to Brazil on perma- nent. assignment to promote Sino- Brazilian trade. The Chinese first established an outpost in Brazil in 1961 when NCNA sent two correspondents to staff an office in Rio. Peiping's commercial mis- sion in Chile--established in 1961--has apparently had ample time for activities other than trade. Its recent offer to purchase 10,000 tons of Chilean copper--worth about $6 million --is the first significant Chinese trade overture there since 1959. Officials from this office visited Uruguay during July and August this year to explore the possibility of setting up a new trade post in Montevideo. (SECRET SABRE NO FOREIGN DISSEM) Page 10 —FOP-SECRET DINAR Page 19