CURRENT INTELLIGENCE BULLETIN - 1957/06/30

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03153708
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: June 30, 1957

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CURRENT
INTELLIGENCE
BULLETIN
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30 June 1957 00 00
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NEXT REVIEW DATE: - e
AUTH: 70-
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REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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CONTENTS
HE 1957 CHINESE COMMUNIST BUDGET
(page 3).
2. ISRAELI-SYRIAN BORDER TENSION
(page 4).
3. SOVIET GROUND ATTACK AIRCRAFT REPORTED DELIV-
ERED TO YEMEN (page 5).
6 4. CARDINAL WYSZYNSKI TO PRESS FOR NEW CONCESSIONS
FROM POLISH REGIME (page 6).
5, SOUTH KOREA AGAIN BLOCKS AGREEMENT WITH JAPAN
(page 7).
/ 6. REVISED NEW ZEALAND DEFENSE POLICY
30 June 57
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1� THE 1957 CHINESE COMMUNIST BUDGET
Comment on:
Finance Minister Li Hsien-nien has
presented to the Chinese Communist
National People's Congress an austerity
budget designed to lay a "solid foundation"
for the Second Five-Year Plan, to be
launched in 1958. Expenditures and revenues in the 1957 budget
will total $11.9 billion, slightly under last year's figures.
Last year's budget resulted in a sizable
deficit; and to achieve a balance this year, the regime plans
to reduce defense spending by just under 10 percent, to about
$2.25 billion. Administrative expenditures will also be cut.
Investments in fixed assets are to be sliced by more than 20
percent, although the amount to be spent will still be larger
than in any other year of the First Five-Year Plan except 1956.
The priority of heavy industry remains the "guiding principle"
of industrial investment, but even here, investment has been
cut by 8 percent.
While asserting that the people's purchas-
ing power would be at least as high as it was last year, the
minister implied that further increases in prices might be nec-
essary during the year. He added that the salaries of certain
officials, who have come under attack for high living in the cur-
rent "contradictions" campaign, would be "appropriately" low-
ered.
Li also revealed that deliveries of equip-
ment to China under the terms of loans from the Soviet Union
lagged substantially behind schedule in 1956. In addition, for-
eign loans China anticipates receiving in 1957 will be only one
fifth of the 1956 level, while loans extended by China to other
countries will increase by one quarter this year.
30 June 57 Current Intelligence Bulletin
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2. ISRAELI-SYRIAN BORDER TENSION
Comment on:
Tension remains high along the Syrian
Israeli border. The past two weeks
have been marked by a series of inci-
dents including the killing of an Israeli
engineer and a young Israeli woman.
A UN observer has informed the American
army attache in Damascus that on 25 June he saw a new Israeli
military camp with an estimated two companies of troops about
10 miles west of the Syrian border north of Lake Tiberias. Such
activity raises the possibility that Israel may resume the policy
of making reprisal raids which it followed before the Sinai cam-
paign last fall. However, the American military attache in Tel
Aviv has reported that as of 28 June only routine military train-
ing activities had been noted there.
American observers in both Israel and
Syria speculate that the border incidents may be due to a de-
sire of Syrian leftists to keep their country in a state of tension
to cover possible political moves as well as to trigger-ha
troops operating in unpleasantly hot and dry weather.
30 June 57 Current Intelligence Bulletin
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3, SOVIET GROUND ATTACK AIRCRAFT REPORTED
DELIVERED TO YEMEN
Comment The IL-10, a single piston-engine air-
craft, is well adapted to the kind of
warfare Yemen has been engaged in against the British.
While obsolete 'by both, Soviet and Western standards,
it is currently employed in a ground attack role by Commu-
nist China. Although no match for British jet fighters based
in Aden, such an airplane, if effectively piloted, could prob-
ably inflict considerable damage on British armored car pa-
trols and troops of native Aden levies.
30 June 57 Current Intelligence Bulletin
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4, CARDINAL WYSZYNSKI TO PRESS FOR NEW CONCESSIONS
FROM POLISH REGIME
At a conference of Polish bishops con-
vened on 25 June following his return
from the Vatican, Cardinal Wyszynski
announced his intention to press the re-
gime for additional concessions, as well as to hold it to the
spirit and letter of the December church-state agreement.
the cardinal has already demanded the resumption of church
control over the Catholic charitable organization, and will
press for the return of church properties and the right freely
to publish religious material.
Wyszynski told the bishops that the Pope has approved the
appointment of ten new bishops including those the cardinal
had proposed for the former German territories.
Comment In approving the appointment of bishops to
the former German territories, the church
has made its only gesture of conciliation toward the Polish gov-
ernment since Wyszynski went to Rome. Vatican circles re-
portedly had strong misgivings about the church-state rapproche-
ment in Poland. Wyszynski apparently convinced them that his
strong influence over the Polish people has successfully pre-
vented public outbursts against Soviet domination and possible
Soviet intervention, a fact which will be a major asset in his at-
tempts to exact further concessions from the regime. The Polish
United Workers' (Communist) Party is on record, however, as
opposing nonreligious activities of the church, presumably in-
cluding charitable and publishing activities.
30 June 57
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5. SOUTH KOREA AGAIN BLOCKS AGREEMENT
WITH JAPAN
Comment on:
South Korea is attempting to gain fur-
ther concessions from Japan before
agreeing to an exchange of detainees
and a resumption of formal negotiations
for an over-all settlement between the
two countries
the American interpretation of the Japanese
peace treaty would be disregarded in settling Korea's claims
against Japan. The American interpretation states in essence
that since Japan has renounced all property claims against
Korea, Korea's claims against Japan are reduced. Previously
both sides had apparently agreed with this interpretation. Kim
also said that President Rhee is willing to release all Japanese
fishermen, including those who have not completed their sen-
tences, if Japan would agree to the changes.
President Rhee appears to have resorted
to his usual technique of increasing demands when agreement
appears imminent.
the Japanese Justice Ministry wants to file deporta-
tion orders against the Korean mission in Japan if Seoul does
not accept the proposed agreement.
30 June 57
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6. REVISED NEW ZEALAND DEFENSE POLICY
The American embassy in Welling-
ton reports that the revised defense
policy announced by the New Zealand
government on 12 June represents a
revolution in New Zealand's military thinking. New Zealand
now plans to send a full battalion to Malaya to replace an
air force squadron of 150 volunteers, and to establish there--
for the first time--an overseas headquarters. It will also
maintain a small but effective mobile force at home for use
in Southeast Asia. In addition, semitrained conscripts will
be kept in readiness for mobilization and overseas deploy-
ment in an emergency.
The new defense proposals have received
general approval, despite their call for increased expendi-
tures. They reflect New Zealand's recognition that its role in
promoting collective security must be limited to the contribu-
tion of conventional forces, while relying on the United States
and United Kingdom for nuclear deterrent. The embassy be-
lieves the plan is the first step toward integration with Aus-
tralian forces and toward close co-ordination with United
States defense planning. Considerations of public sentiment
have prevented a radical departure from present defense ties
with the United Kingdom,
Comment The defense plans indicate a departure
from New Zealand's past reluctance to
spend money on defense. While calling for some re-equip-
ment, New Zealand has not yet adopted Australia's decision
to re-equip with American materiel, although such a step in
the future is probable.
30 June 57
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