CURRENT INTELLIGENCE BULLETIN - 1953/01/04

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02050110
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: July 15, 2019
• Document Release Date: July 22, 2019
• Publication Date: January 4, 1953

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4 January 1953 3.5(c)
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CURRENT INTELLIGENCE BULLETIN
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Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
FAR EAST
1. Three additional Chinese armies may have entered Korea (page 3).
2. Reconstruction of Hainan's port facilities progressing (page 3).
3.
4.
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Britain outlines new plan /or approacn to Egypt (page o).
5. Britain, France and Italy seen hoping for eventual collapse of
Libya (page 5).
WESTERN EUROPE
7. Comment on possibility of devaluation of French franc (page 7).
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FAR EAST
1. Three additional Chinese armies may have entered Korea:
On 1 December the Chinese Communist High
Command in Korea made arrangements to
move an additional army group into the pen-
insula,
This army group, composed of nine infantry
divisions and one armored division, reportedly was part of the Second
Field Army and was to move into Korea around 1 January,
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Comment: Elements of at least two and pos-
sibly three new armies in Korea 3.3(h)(2)
during the past week, but these elements were identified as subordinate
to the Third Field Army.
Three additional armies, which normally com-
prise an army group, would increase Chinese Communist strength in
Korea by approximately 100,000 men.
2. Reconstruction of Hainan's port facilities progressing:
of Hainan,
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The raising of sunken ships in the harbor, how-
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Construction work at Haikou, on the north coast
was described as "urgent."
Comment: The island of Hainan has been the
scene during the past year of a military and economic build-up. Haikou
and Yulin are the two principal ports.
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At Haikou, the Communists are concentratin
on dredging activities,/
At Yulin, where ships
sunk during World War II have made entry into the harbor hazardous,
the Communists have begun work on a vessel salvage program.
NEAR EAST - AFRICA
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4. Britain outlines new plan for approach to Egypt:
As part of its "package proposal" for the
settlement of the Anglo-Egyptian dispute,
Britain proposes to resume supplying
military equipment to Egypt by stages.
In order to reap the greatest advantage,
Britain will not release any further supplies
until Anglo-Egyptian negotiations are under
way and will withhold the most important
items until agreement has been reached.
Ambassador Caffery in Cairo strongly ad-
vises against American acceptance of the proposal. Instead, he
recommends that the United States immediately implement a pro-
gram of interim military and economic assistance which the State
Department is presently preparing.
Comment: The current impasse in the Sudan
discussions plus a likely strong Egyptian aversion to bargaining with
Britain on arms may result in a complete Anglo-Egyptian impasse
which would play into the hands of the extremists.
Reports from Egypt indicate growing Moslem
Brotherhood impatience with lack of progress on the Suez issue and
warn of possible outbreaks of terrorism.
5. Britain, France and Italy seen hoping for eventual collapse of Libya:
US Minister Villard in Tripoli concludes,
after reviewing Libya's first year of in-
dependence, that Britain, France and
Italy are waiting hopefully, "like vultures,"
to claim a dismembered Libyan "carcass."
He maintains that the three powers are more interested in the eventual
division of Libya's three provinces - Cyrenaica, the Fezzan and
Tripolitania - among themselves than in the promotion of a strong
centralized government.
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This division of Libya may not happen in the
immediate future, the Minister says, but long range planning must
consider the possibility that Libya may cease to exist as a sovereign
state.
Comment: To this picture of Libya's future
must be added the prospect that, even if it survives, Libya's growing
alignment with intemperate Arab nationalism entails problems for
the West. Current American, British and French negotiations on
military bases are already stalemated bya Libyan desire to re-examine
its foreign commitments.
WESTERN EUROPE
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7. Comment on possibility of devaluation of French franc:
The continued sharp deterioration of France's
account with the European Payments Union creates the possibility that
the next government will immediately devalue the franc.. The official
exchange rate of the franc has long been considered further out of line
than that of any other West European currency.
Since the franc probably must be devalued
eventually, any new French administration may do so immediately in
Order to avoid incurring the sole blame for such a step. The next
government may also prefer to act before a further decline in French
foreign exchange holdings would make it even more difficult to sta-
bilize the franc at the newly determined rate.
France's deficit with the European Payments
Union has been averaging nearly $40,000,000 a month for the past year
and a half, and commencing with November 1952 has necessitated settle-
ments entirely in gold. Despite the poor prospects for any substantial
reduction of the monthly deficit, Premier Pinay rejected a devaluation
of the franc in favor of measures which stressed creation of a "climate
of confidence." His position was strengthened by scheduled American
aid, which will permit France to apply the bulk of its dollar receipts
from other sources to settlement of its Payments Union deficit, at
least through February.
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