ment of power politics in the whole Southeast Asian subcontinent and is directed against us as well. As we and the British leave the area, the Soviets are establishing bases and moving in. On the east coast of India the Soviets are establishing a training base with the Indian Navy. As far as we can tell, the Soviets make port calls there at the moment. It can't be considered a Soviet base as such at the present time. We don't know what will happen after the Suez Canal is opened. The Soviets will have a much shorter resupply route to their naval force in the Indian Ocean and will probably increase it. Mr. RYAN. Mr. Chairman, I notice in passing the experience of the Arabs in the Middle East with regard to the Soviet presence and perhaps unless the Soviets have become more sophisticated in their operations in foreign nations, they might wind up getting the "Egyptian treatment" before they are through. On page 4 of your statement, you refer to pro-Arab sentiment because of simple reaction to anti-United States, now anti-Japanese kind of "imperialistic dog" thing, which is the standard "hate the strong presence that is there and fight against it." Is that why they are pro-Arab or are there more positive reasons, Muslim religion and so on? I am trying to sense from what you say how deep the pro-Arab sentiment is on the assumption that that sentiment which is negative is passing, that sentiment which is positive is much deeper and more lasting. So how deep or how heavy is this pro-Arab sentiment you refer to? Mr. HOLMAN. Not very, I would say. In a very sentimental and minor way they do feel a religious tie to the Middle East. Islam is the dominant religion of Malaysia as it is of Indonesia. This ties them together. They are not Arabs ethnically. Arabic is not their native language. It is politically useful just as anti-Japanese feelings are politically useful to discredit the government. In the long run it is not a very profound tie. Both the Indonesians and Malaysians know very well their economic self-interest is to compete with the Arabs. Indonesia offered oil to us as soon as announcement of the oil boycott was made. Mr. RYAN. So pro-Arab sentiment is your view; if I read what you say properly, is simply a kind of political, emotional reaction rather than one based upon either national or economic reasons that are more fundamental? Mr. HOLMAN. Correct. One final point. In the past, Israelis have done quite well in this area. The Israelis assisted in the training of the Singapore defense force, for example. Mr. RYAN. On page 5 you refer to the fact that many foreign companies have transferred from Hong Kong to Singapore. Is there any particular reason for that? Mr. HOLMAN. Several. First, a more stable labor force. The Communists have heavily infiltrated the labor unions and labor force in general in Hong Kong, producing strikes, and sabotage and the Queen Elizabeth sank in the harbor of Hong Kong, and investigation determined it had been sabotaged. Many foreign businesses are concluding now is a good time to get out of Hong Kong. Other additional factors are lower wages in Singapore, lower rents in Singapore, and finally the police force. There was a major scandal in Hong Kong in which the English chief of the police force had been pocketing a good deal of money for several years and suddenly headed for the north of Scotland with enormous bank accounts, which greatly discredited the government of Hong Kong. None of this happened in Singapore. My experience in Singapore is that most residents, Malaysians, Chinese, are willing to support the policies of Lee Kuan Yew's government. Mr. RYAN. Is there any hint in all of that of an anticipation of when the lease runs out? Mr. HOLMAN. You mean in Hong Kong? Mr. RYAN. In Hong Kong. Mr. HOLMAN. All I can tell is that the Chinese and British in Hong Kong are following the policy of developing the economy of the peninsula and the island to the maximum of their ability, hoping that it will become so economically important to Peking that even when the lease runs out, some arrangement can be made. Mr. RYAN. Do you consider that Hong Kong's existence as an important economic center in the Far East is still significant or is it on the decline? Mr. HOLMAN. It has been declining slightly in the past several years but it is still very significant. It is being passed by Singapore now. Singapore's growth rate has been over 10 percent for the past years. Mr. RYAN. Do you think that Singapore will become a kind of manufacturing and trading state able to exist on its own resources? Mr. HOLMAN. Very much so. It is already the center of light industry, technology, and communications. Mr. RYAN. You did not say much about Taiwan in all of this. How do they fit in? Are they too far out of this thing, too small, or what? Mr. HOLMAN. Their role in Southeast Asia is an interesting one. They have a consul in Kuala Lumpur. I talked to members of that consulate and they told me they were pessimistic. They thought the Malaysians would soon transfer full recognition to Peking. Their relations are quite close with Singapore. Lee Kuan Yew made a secret trip to Taipei, secret in the sense the result of the talk was not discussed. Yet it is clear that Taiwan has a major political role in Southeast Asia, likewise with the Indonesians. Mr. RYAN. Economic? Mr. HOLMAN. In part economic and in part because they represent a focus of loyalty for the Chinese community which is not involved with the Communists, which is not going to seek to overthrow the local government. All three countries do trade very heavily with Taiwan as do the Japanese. Mr. RYAN. What is the reason for Mr. Lee wanting to urge, as you refer here, the Americans to keep a strong military presence in Southeast Asia? Mr. HOLMAN. He realizes that if the United States and Japan do not, the region will be militarily dominated by the Soviets. Mr. RYAN. Why does he find that difficult? Mr. HOLMAN. He assumes that the Soviets will then put pressure on the local governments to adopt anti-Peking policies in the first place, anti-Western policies in the second place, and third, seek to establish a Communist line of government. Indonesia and Malaysia have been through this problem before. Mr. RYAN. With the present Communist pressure and with the past uprisings, what kind of Communists supported that? Where did it come from? China or Russia or both? Mr. HOLMAN. In the case of Malaysia it was very closely tied to Peking. In the case of Indonesia, it was more complicated. The Soviets gave an enormous military arsenal to the Indonesians. The PKI, Indonesian Communist Party, had elements which favored both sides. Early in the 1960's the pro-Peking faction came to power within that party and launched a coup in 1965 which caused it to be annihilated by the army and by the population. Mr. RYAN. Do you think that Peking's reaction to the Soviet presence and Peking's reaction to the policies of the Soviet Union would encourage a Communist takeover, to work from within to produce a nation friendly or at least the Malaysian nation friendly to the Chinese Communists? Mr. HOLMAN. That has been the policy. One goal is to make it clear to the Chinese that if they want full diplomatic and trade relations with these countries, they are going to have to terminate their assistance to the insurgents. Mr. RYAN. A very deep problem of racial distrust in Malaysia, between the Chinese and Indians, I presume, too, and the native Malays on the other side. Where does Peking Communism find its support in Malaysia? Mr. HOLMAN. Among the Chinese primarily, to a much lesser extent among the Malays. Mr. RYAN. Very interesting. That is all I have, Mr. Chairman. Mr. Nix. Thank you. Gentleman, on my behalf and on behalf of the committee and Mr. Ryan, I wish to express our very deep appreciation for the contribution you have made. This is a subject which is of interest to us. We have sought to explore and learn from you gentlemen. You have been a great help to us. Thank you very much. The subcommittee meeting will stand adjourned. [Whereupon, at 3:30 p.m. the subcommittee adjourned, to reconvene subject to call of the Chair.] APPENDIX AN ABBREVIATED CHRONOLOGY, COVERING THE YEARS FROM 1954 TO 1964, TAKEN FROM PROF. HAROLD C. HINTON'S BOOK, ENTITLED "THE BEAR AT THE GATE" 1954: October-Mao raises the problem of Mongolia with Khrushchev. 1957: January-Chou En-lai raises question of Mongolia with Bulganin. 1959: January 23-Peking formally repudiates the McMahon Line. 1962: Spring-Tension along border between Sinkiang and Soviet Central Asia. October-November-Sino-Indian border war. December 12-Khrushchev publicly taunts China with its failure to press territorial claims against the "imperialist" powers. 1963: March 8-Peking says the "unequal treaties" imposed on China by tsarist Russia may have to be revised. May-Moscow proposes talks on the border question. 1964: February 23-Sino-Soviet border talks begin in Peking. July 10-Mao, in interview with a Japanese delegation, accuses the Soviet Union of taking territory from China and Japan, as well as from other countries, since 1945. September 2-Soviet editorial rejects Chinese territorial claims. November-Post-Khrushchev Soviet leadership offers Peking an accommoda tion. (141) 32-484 O 74 10 CHRONOLOGY OF SINO-SOVIET RELATIONS 1965-1974 (Prepared for the House Foreign Affairs Committee by Robert D. Shuey, Analyst in Asian Affairs, and Thomas W. Callery, Research Assistant, Foreign Affairs Division, Congressional Research Services, Library of Congress) 1965 January 3: January 18: January 21: February 5: February 7: February 10: The Soviet news agency Tass reported that the Soviet People's Daily began publishing a number of Japanese Communist Party (JCP) statements, all critical of the new Soviet leadership. People's Daily published a Zeri i Popullit editorial Soviet Premier Aleksei Kosygin received a cool Kosygin gave a speech in Hanoi which contained several distinctly anti-Chinese references. Kosygin met with Mao Tse-tung in Peking before departure for North Korea. *The following sources were used in compiling the chronology: Cheng, Peter. A Chronology of the People's Republic of China from October 1, 1949. Totowa, New Jersey, Littlefield, Adams and Co., 1972. China Quarterly, London, various issues. Deadline Data on World Affairs. Facts on File, Weekly World News Digest with Cumulative Index, various issues. Far Eastern Economic Review, Hongkong, various issues. Keesing's Contemporary Archives, Weekly Diary of World Events, Keynshan Bristol, various issues. New York Times, various issues. Strategic Survey, The International Institute for Strategic Studies, London, various issues. The Washington Post, various issues. The Washington Star-News, various issues. (142) |