CURRENT INTELLIGENCE BULLETIN - 1955/07/12

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03448328
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 5
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: July 12, 1955

Approved for Release: 2019/09/16 C03448328
TOP
3.5(c)
12 July 1955
3.3(h)(2)
Copy No. 99
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. /7
NO CHANGE IN CLASS. Zr
E DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: /Li
AUTH: HR 70-2
DATE: "Vile& REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
4/7 /
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SUMMARY
GENERAL
1, Chou En-lai shows further interest in direct talks with Chinese
Nationalists (page 3).
SOUTHEAST ASIA
2. Continuing Indonesian crisis causes Sukarno to delay trip abroad
(page 4).
SOUTH ASIA
3. Afghan finance minister comments on Afghan-Soviet transit agree-
ment (page 4).
* * * *
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GENERAL
1, Chou En-lai shows further interest in direct talks with Chinese
Nationalists:
Chou En-lai
agreed with the recent
proposal of the ex-Nationalist leader, Li
Tsung-jen, for direct talks between Com-
munist China and Nationalist China "to
settle the tuture ot Formosa," but he rejected the idea of a pleb-
iscite on Formosa, if such talks were to break down.
Chou also agreed with Ho Chi Minh's
statement that Asian
mations could solve their mutual problems "peaceably, like rela-
tives," if the United States would refrain from intervening.
Comment: The Ho-Chou theme illumi-
nates the long-standing Communist aim--which would be evident
in any international conference on Far Eastern issues�of secur-
ing a withdrawal of American power and influence from the Far
East. Peiping has indicated it hopes, after negotiating the with-
drawal of American forces, to arrange with the Nationalists for
a peaceful turnover of Formosa.
Chou's rejection of a plebiscite is based
on his contention that Formosa belongs to Peiping and on his fear
that the Communists would lose such a vote,
Li Tsung-jen, elected vice president of
Nationalist China in 1940, served briefly as acting president be-
fore Chiang Kai-shek resumed control in 1949. He has lived in
the United States for the past six years and was expelled from
Chiang 's Nationalist party, Kuomintang, last year.
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SOUTHEAST ASIA
Continuing Indonesian crisis causes Sukarno to delay trip abroad:
President Sukarno's decision to cancel
lanned state visits to five Asian
ries and postpone his departure
for Mecca from 12 to 18 July reflects
is growing concern over the continuing army-cabinet crisis.
Presumably he fears that developments in his absence might
bring about the cabinet's fall and cause a further decline in per-
sonal prestige.
Sukarno may hope to effect a compro-
mise by 18 July with Indonesia's seven territorial commanders,
who have been in conference in Djakarta since 9 July. He is also
reported to be in intensive consultation with Prime Minister Ali
and Vice Prime Minister Arifin.
The chairman of the Masjumi, the chief
opposition party, has stated that the government's failure to solve
the chief-of-staff problem and its increasing loss of authority
place the country in acute danger. He believes a cabinet appointed
by and responsible to the president might be an acceptable solu-
tion. Vice President Hatta, who is frequently discussed as the
leader of a "presidential cabinet," is reported unwilling to head
such a government because it would have no constitutional basis.
He undoubtedly would accept the responsibility, however, if re-
quested to do so by parliament.
SOUTH ASIA
3. Afghan finance minister comments on Afghan-Soviet transit agree-
ment:
Afghan finance minister Malik told an
American embassy officer in Kabul on
6 July that the Afghan-Soviet transit
agreement announced on 28 June would
not give the USSR a monopoly of Afghanistan's foreign transit trade.
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He said, however, that if the Pakistani blockade continues, "nearly
all" Afghan goods would be shipped through the USSR.
The finance minister warned that he knew
Pakistani pressure was being exerted in the hope of removing
Prime Minister Daud but stated that the pressure was actually
strengthening Daud's position by causing certain normally dissi-
dent elements to rally around him.
Comment: Malik's remarks seem de-
signed to convince the United States that Afghanistan will be lost
to the Western world unless Pakistan is forced to abandon its
economic blockade�
The Pakistani blockade does not vitally
affect the primitive Afghan economy, however, and there is no
need as yet for the Afghan government to resort to extreme meas-
ures. It appears, therefore, that the threat to turn to the USSR
is still being used more as a bargaining point than as a serious
declaration of intent and that its aim is to help Afghanistan ex-
tricate itself from the dispute with Pakistan with as little damage
as possible.
Kabul's contract with a Swedish firm to
drill for oil near the Soviet border, announced on 28 June, and
Daud's recent personal request for an American construction firm
to begin work on an international airport at Kandahar indicate that
Afghanistan still hopes for Western aid on basic economic projects.
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