Mr. LINDEN. Yes. Mr. RYAN. For a second overcoat that is their desire for something more than what the consumer gets as the kinds of backers which he believes give him what he needs, gives him the popularity he needs. Mr. LINDEN. Yes. Some people recall a certain populist element in Khrushchev. Such an element is rather absent now in the Brezhnev leadership, you know which plays more on the old imperial patriotism of the military and officialdom. Mr. RYAN. Do you think those desires and needs are still present? Mr. LINDEN. Oh, very much so. Mr. RYAN. More so today than before? Are there more secret police today? Mr. LINDEN. Both, the secret police role has increased and fears of a Stalinist revival is very sharp especially among the educated. The pressure of popular need is shown in the agricultural wheat deal and so forth. Clearly Brezhnev feels that he can break down the problem-that if you solve or mitigate the problem of popular need maybe that he could enforce the neo-Stalinist line at home without serious resistance. I think it is hard to realize how disturbing it was for the Soviet leadership during the Khrushchev years to have Solzhenitsyn's powerful story of a peasant who went through a camp come out into the open. It is interesting that the whole question of the second overcoat was dramatized in Solzhenitsyn's story. His peasant-hero did everything his cruel captors told him to do and by his wits survived and went out and worked on projects laying bricks in sub-zero weather. Yet, he was very disturbed when he heard from the outside that people were making so-called rugs for sale when they were just sheets with inked-on patterns. Despite his own dire situation this simple peasant was appalled that they would make something so flimsey and shabby and that if he had been back home at work he would have done a better job than that. The story was merely reflecting upon the tremendous yearning of the Russian people for something better, not just food but a quality of life. Mr. RYAN. Thank you, Mr. Chairman. Mr. Nix. I want to again express my appreciation to you, Dr. Linden and to Dr. Hinton for your presence here today. It has been most helpful to us and most informative. The bells just sounded and we are called to action. Thank you very much. Mr. LINDEN. Thank you. Mr. Nix. The subcommittee is adjourned. [Whereupon, at 3:25 p.m. the subcommittee adjourned.] OIL AND ASIA WEDNESDAY, JANUARY 30, 1974 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ASIAN AND PACIFIC AFFAIRS, Washington, D.C. The subcommittee met at 2 p.m., pursuant to notice, in room H-236, the Capitol, Hon. Robert N. Ĉ. Nix (chairman of the subcommittee) presiding. Mr. Nix. The subcommittee will come to order. Today the subcommittee will hear from two witnesses on the subject of Asia and oil. Gaston Sigur, director, Institute for Sino-Soviet Studies, The George Washington University, will testify on his recent trip to Asia, which included intensive study and meetings with key Japanese and South Korean officials. As director of the institute, Dr. Sigur is an old friend of this subcommittee. He and his staff constitute a great resource in the city of Washington for the foreign policy community. The subcommittee has relied on the institute for information and leads to witnesses. Dr. Sigur's views are important to us as to the effect of the oil crisis on Japan and our future relations with Japan. Dr. Choon-ho Park is a noted legal scholar, who will return to the East Asia Legal Institute at Harvard University tomorrow after a year at the Woodrow Wilson International Center for Scholars here in Washington, D.C. He is an expert on the legal systems of Korea, Japan and China, as well as on oil development in mainland China, and law of the sea. He will talk to us today on the new development of oil in China. Oil is used as a political weapon by China. Its need for oil is limited since its industry depends on coal. Dr. Park's views are very timely in that the Peoples Republic of China in a naval engagement seized the Paracel Islands from the South Vietnam garrison on January 20th. This is the first over the water attack by the Armed Forces of China since the 1950's. It should be noted that this attack came 175 miles from Chinese territory and 250 miles from the South Vietnamese mainland. It is also important to point out the Paracel Islands claimed by China for centuries is believed to be rich in offshore oil. The Continental Shelf of the South China Sea and the Yellow Sea may well be the center of oil expansion in future generations. The same geological conditions exist in the already developing Indonesian Seas. Thus the new battleground in Asia may be over the ownership of the oil rich Continental Shelf of East Asia. Dr. Sigur, I want to personally welcome you to the subcommittee and express my thanks for your past assistance, and advise you that you may proceed at your will. 32-484-74 -3 STATEMENT OF GASTON SIGUR, DIRECTOR, INSTITUTE FOR SINOSOVIET STUDIES, GEORGE WASHINGTON UNIVERSITY Mr. SIGUR. Mr. Chairman, I am honored by your invitation to me to appear before this subcommittee. In your introductory remarks, you said some very kind words about the Institute for Sino-Soviet Studies of the George Washington University. I assure you it is a real privilege for me and my colleagues to cooperate with you and your subcommittee and we look forward to many more years of continuing cooperation. I would like to speak today, as you pointed out, to the subject of the oil crisis in Asia, and particularly as it relates to Japan. I think since this crisis has burst upon the world scene that a situation is developing in the international order which is quite different from what has been true in the past. It is very hard for us at this stage to interpret exactly what these differences will mean, but there is no doubt in my view at least that things will never again be the same. I don't think that there is any country where the effect of this crisis has been so profoundly felt initially as in Japan. As you know, Japan sits today as a global economic power and it is moving into a much broader and deeper political position in world affairs both in Asia and generally throughout the world. As the energy crisis began, the Japanese initially had a feeling of very great shock and pessimism. The Japanese had been extremely optimistic about their own future. They thought of themselves as moving ahead without any problems of economic growth for the next decade or more. This view of themselves was surely shaken. They began a reassessment of their position-a reconsideration of just where they stood, and where they were about to go. I think we in this country should understand how important the decisions that the Japanese take will be to us. In my opinion, the United States-Japan alliance is the foundation on which the U.S. position in the Pacific and Asia rests. The U.S. position of strength which is so important in this period of worldwide change and flux would be seriously affected by a much weakened Japan or by a Japan dependent upon either the Soviet Union or the People's Republic of China for any considerable measure of energy resources needed for her great industrial enterprises. Under no circumstances should we allow this crisis to cloud our understanding and comprehension of this essential fact. When I was in Japan in mid-December of last year, a small number of Japanese political figures seemed to be questioning the wisdom of Japan's close alliance with the United States in view of the oil situation and the energy crisis. Some said, and these were certainly not. the majority of the leadership, by any means, but a few said Japan would not have found herself in such straits if she had not been in a close alliance with the United States. An article in one of Japan's leading newspapers, the Asahi, even speculated that the United States had, in fact, initiated the crisis to slow down Japan's economic growth and to bring her to heel. It said she was getting too independent and going off too much on her own. However, more thoughtful Japanese did not accept this cynical interpretation of America's role in the Middle East war and its parallel events. Indeed, the vast majority of Japan's leaders have in fact taken the view that the alliance with the United States is more important for Japan than ever; that there must be the very closest kind of relationship if Japan is going to see her way through the present crisis and, of course, the continuing crisis of energy resources. As one high official put it to me, the United States is the global power with the strength and respect to settle this matter. The Soviet Union can upset and disturb but she cannot settle. This view seems to be fairly well accepted by the Japanese leadership now. I would quote at this point Prime Minister Tanaka's speech the other day in the Japanese Diet in which he said: The unshakable relationship of mutual trust we have with the United States is the basis for developing our multilateral foreign relations. I would say that we should feel the same way as Prime Minister Tanaka in our own thinking. Because of the United States-Japan alliance, I think we have a degree of safety that we would not have otherwise. We can negotiate and we can seek agreements in a number of areas with both the Soviet Union and the People's Republic of China because of this alliance, and because of the strength it gives us. Now, the Japanese, of course, emphasizing the very special relationship which exists in an alliance form between our two countries urge that the United States do everything it can to help her get the oil she needs. The Japanese argument is that the United States will be hurt if Japan is hurt economically. You know the old phrase that when Wall Street sneezes, Japan gets pneumonia. Now the Japanese say while the United States may not get pneumonia from a Japanese sneeze, we are not going to feel too well afterward. They also emphasize the fact that many other areas of the world would be seriously hurt by a Japanese economic breakdown. In traveling to Taiwan and Korea this concern was expressed to me by official and nonofficial leaders of both countries. In Korea there was particular concern over the energy crisis. When I was there in early December the lights and heat and so on had already been turned down. I went to the Blue House, which is the equivalent to the White House, and had a lengthy meeting with the chief security adviser to the President. Both the lights and the heat in the Blue House were turned down. A number of Koreans with whom I spoke were worried about what would happen to them if Japan were badly hurt by the energy crisis. In Taiwan a similar feeling was present, though. Taiwan was not particularly affected by the energy crisis when I was there in December. Taiwan was considered a friendly nation by the Arab States and therefore has never had her oil supply seriously reduced and did not anticipate any such reduction. So the Taiwan attitude was not one of immediate peril at all. The Chinese were concerned about the long pull. If there were economic problems in the United States or in Japan, then Taiwan would feel her economic development threatened. But for the moment, I was impressed with the tremendous amount of optimism in Taiwan. They believe they have surmounted economic and political problems of great magnitude and look with some confidence to the future, as uncertain as it is. But we must remember that in the long term Japanese trade, investment and tourism are all major elements that contribute to the economic growth and well-being of Taiwan and Korea. In fact, this is true of the whole Southeast Asia area. If Japan has to take action which would damage the economies of these countries she was already cut back on exports-this will tend to increase the poor and needy in these countries, and there will be serious political and social upset which will be advantageous to anti-American forces in the area. Very little was said to me in Japan about the effect of the oil crisis on the Self Defense Forces (SDF). I think for the moment there is no effect as far as the oil requirements of the Self Defense Forces are concerned. These seem to be pretty well taken care of and there is a fairly sizeable stockpile of oil. But we should recognize that within Japan there is a strong vocal group which opposes the Self Defense Forces. This is a clear minority but a vocal one. If the oil crisis deepens and Japan has to make major decisions over the priority of oil recipients in her country, we can expect that these voices against the Self Defense Forces will become stronger and will try to do everything they can to see that oil is curtailed to the SDF. By this means they will try to weaken the SDF and place strains on the United States-Japan Security Treaty. I think this is something we have to keep in mind and something that is very much in the minds of the Japanese because the security treaty is to them the core of the United States-Japanese alliance. Japanese leaders are much concerned about the political effect of the current oil crisis. There has been a real possibility all along, even prior to the energy crisis, that the opposition parties would gain a majority in the upper house elections this summer. The Japanese Liberal Democratic Party (LDP) now has a majority of nine in the upper house. This is not so large a number. If the LDP, the governing party, were to lose the majority it would not mean an automatic change in government, for the lower house is where the real power resides, but it would be a major psychological blow and would probably make it necessary for the present government to call an election. It could mean, at a future time, a political defeat for those forces in Japan who most favor the alliance between the United States and Japan and the security treaty. This is very much in the minds of the Japanese Liberal Democratic Party government and its business supporters-those who have very strongly supported the U.S.Japanese alliance and special relationship. They are greatly concerned about this upper house election and again place hope in the relationship with the United States which will help them overcome at least the major effects of the oil crisis prior to this election. Again, the Japanese people have faced a very severe inflation in the past year or two because the cost of living has risen tremendously, there is a great deal of public anger directed against the government at this and this can be expected to continue. I felt when I was there. that there was little doubt, it may not be. The real question of interest to most people you talked with was inflation, not the energy crisis. The energy crisis had not affected them but you could hardly have a conversation where inflation did not come up. The government has taken steps in recent days to do something about this, increasing appropriations for public works, and other things of this sort. If these |