STATEMENT BY THE U.S. DELEGATE (MR. LUDDEN) RE WORK OF CHINA COMMITTEE DECEMBER 4, 1952

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00662R000200060003-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 12, 2016
• Document Release Date: May 22, 2000
• Sequence Number: 3
• Publication Date: December 4, 1952
• Content Type: STATEMENT

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STATEMENT BY TES U.S. DELEGL':TE (MR.~LUDDI~N)
WORK OF C H I N
December 1952
I believe it is not necessary to revbw the circumstances
which impelled the creation of this Committee! The recognition
of the need for such a body was fully expressed in the report o-
the Five Power talks in f ashingto`n last July and the resolution
of the Consultative Group in Paris last September. The record
of these meetings shows, however, that the United States agreed
to very substantial modifications of its original position as
to the most desirable organization, in the expectation that this
Committee, when created, would deal with the problems involved
with efficiency and despatch.
'bile my Government's own policy on the matter of security
controls against China is well known to you as one of virtually
com a g0, we are cognizant of the terms of reference
of the Commit tee as laid down by the Consultative Group and of
the difficulties faced by other countries in Dursuing such a
course of action. I should like to take this opportunity to
assure you he t we enter tsthis _ endeavor prepared. to develop
-.._
common meast yze
_.__. ~s we joint ascertaid and anal
Them, realizin;, of course, that we are here to.".cdnsidorv these
resTrictive measures which will best serve our common security
objectives. It is our hope that -after a full stud of the
facts this Committee will come to re and the whole rv Chin i problem
of strategic trade 4controls in substontially the same
the United. States. ~~- -
To my Government the China trade control problem includes,
aspects similar to those found in the European Soviet Bloc
situation, while at the same time including a number of special
aspects. Whatever may be the eventual evolution of China's
political organization and orientation, we here must deal in
practical and immediate terms. China is a vast land mass
bord.ering upon or adjacent to important segments of the Free
World and also the Soviet Union. It has important resources,
a .powerful military force, and possibly the world's largest
population. Of more immediately direct concern, however,
China has undeniably important, if not overriding, economic,
military and ideological ties to the Soviet Union,
China is, however, a comparatively undeveloped area,
especially in terms of basic materials,, industrial capacity
and production, technological advancement and efficiency,
utilities and internal and external transportation. For
these reasons alone its war potential is geared more closely
and in different ways than the rest of the Soviet Blpc to
importations of materials and end-products for dir?o' .military
or military-support uses. The nature of the Chinese economy
is such that an.item of little strategic importance to the
European Soviet Bloc could be of considerable significance in
China, and this aspect alone requires careful evaluation.
The same is true with regard to items which take on special
strategic significance in a situation involving actual
hostilities such as we are now facing in Korea.
Chinese aggression in Korea has faced us all with an
especially urgent situation in considering strategic trade with
China. This is not only because goods moving to China --
directly or indirectly - are likely to be used more fully and
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more immediately in support of aggression against the Free
World, but also because the moral and political issues
involved in strategic trade with China haVe been heightened
by the existence of hostilities in Korea and the United
Nations' recognition of Chinese aggression there.
In considering strategic trade controls with regard to
China, the actual existence of hostilities in Korea is not
the only governing factor. Chinese aggression in Korea in
final analysis is but the most obvious, current manifestation
of the aggressive, expansionist designs of a brutal political
ideology now controlling China. The leaders of the present
Chinese regime are thoroughly imbL~ with aggressive
doctrines interpreted and promulgated. by the Kremlin and
firmly convinced that these doctrines are correct and must
be brought tolrevail not only in Asia, but throughout the
world.. It seems hardly necessary to bring to your attention
recent developments on the Asiatic mainland, particularly
with regard to Burma, Malaya - in fact, Southeast Asia
generally, I am sure you have all noted recent press
accounts of the capture of Soviet military equipment in the
hands of Viet Minh rebels in Indo-China. It is only
reasonable to assume that this equipment reached its destina-
tion via the recently completed extension of the Kwangsi
Railway to the Indo-China border, and it may be well to give
thought to the likelihood of this particular extension having
been made possible by equipment of western origins
Thus a cessation of actual hostilities in Korea by an
armistice agreement would not of itself mean the end of the
problem with which this Committee is concerned. It would
be presumptuous here to attempt to pre-judge post-armistice
conditions, but until there is some concrete indication that
the aggressive, expansionist designs of the Communist regime
in China have shown fundamental change, it seems to us that
the nations of the Free World would have to continue to take
all practicable steps in their own mutual defense interest
to avoid contributing to the development of the strength of
a regime which embraces, and advocates as a matter of policy,
the doctrine of infiltration,, subversion and overthrow of
peaceful ne ighbora
In any event, we feel that the Committee should proceed,
with its work on the basis of existing conditions, taking
into account the special aspects represented by the existence
of Chinese aggression, the potentiality of further aggression
and the nature of the Chinese economy. `Je. further feel that
the Committee should take into account various other speciel
conditions which bear on the practical aspects of developing
and implementing strategic controls on China trade. We
have in mind such conditions as:-
(a)
Smuggling, which is greatly facilitated by
geographical factors and which has tended to
account for a significant part of China's
imports.
(b) The highly organized techniques of Chinese
proofl. eme nt abroad, which has been making
extensive use of subterfuge to evade other
countries' controls.
(c)
The special situations of Hongkong and, Macao
as supply and trans-shipment centers for the
China, trade.
1r. ...
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(a)
The control situations in various other Far
Eastern areas which have been or could be
points of re-export or trans-shipment to
China.
(e) The various aspects of the maritime shipping
problem, which has already been discussed in
some detail in the Coordinating Committee.
This, in brief, outlines the major elements of the
China trade problem as we see it. We expect to supply
dd.et filed nfo, r ation relative to the se e emends oon and
from time to time thereafter. Undoubtedly other members
of the -Ciommittee will have other ,points to suggest and.
we hope, will be prepared to pool information on the whole
problem. In particular we look forward. to very useful
contributions by Governments which have had. considerable
first hand connection or other experience with the problem.
In the meantime, our own specific suggestions for
getting on with the Committee's work will now be outlined
by Mr. Berger, who has been made available to our Delegation
as a specialist on Far =aetern trade matters.
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SUPi'.L,TvILi'~Ti'1~RY_ST.- -BY THE U_S.DELEGrTE _(MR. B"ERGER)
RE
1i70RK _OF THE CHINA COMMITTEE
December.1-172
ivir, Ludden has already outlined our view of the China
security export control problem, of the particular factors to
be considered in working out solutions, and of what has. been
accomplished thus far, I would like niw to present our views
on how to proceed with the work of the Committee, in line with
such further directives as may emanate from the Consultative
Group and such referrals and proposals as may be received from
the Coordinating Committee. We are here, I believe, principally
as specialists in mattes of Far Eastern trade, for the purpose
of contributing our technical-competence to the development of
common measures in relation to the China trade.
The-Coordinating Committee has already developed a consider-
able body of measures and information related to the problem of
strategic controls. This has, however, been largely developed in
terms of the situation in the European Soviet Bloc. This: is,
to a large extent, transferable to and of use in the activity
of this Committee. Nevertheless it does not fully reflect the
various special factors in the China situation, and raises for -
consideration the question as to the extent that the existing
controls and data are appropriate and adequate to the China
situation, and the related question of what adjustments would
be in order,
On the control side, the Coordinating Committee has already
made considerable progress by establishing its China Embargo
List, and we assume that further consideration of this i7a the
China Committee will throw further light on these questions,
On the data side, we believe the Committee should develop
a pool of additional infdrrnation' concerning-the special aspects
of`tho China situation. Such information, we believe, would be
extremely useful both in developing and understanding the- v_er--
all , is of the China trade situation as it bears on our pro--
b em in terms of determining specific commodity usages, or
the feasibility and best methods of application of specific
measures, This information might consist of material developed
by the member governments themselves or derived from commercial
sources, As examples of the information desired and its ap-
plicability, we might bring together materials on trade agree-
ments, the Moscow Conference, solicitations from foreign sup-
pliers, Chinese i.-sport and tariff regulations, and actual
trade movements in orderto ascert :in Chinese high priority
purchasing requirements. These re'quiroments, as determined,
would in turn serve as an indicator of items with respect to
which we ought to carry on a further informational review on
Chinese industrial operations, mining, utilities, and trans-
r-)ortation, and end-product-uses to determine the extent to
which such items are likely to be devoted to military or
military-supaort uses.
TLLooking at the matter as a whole, it seems to us that
the Committee should undertake two parallel lines of action.
One line of action would be to collect and analyze, information
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as a guide for the general operation of the Committee. The
other line would be to proceed now with receiving and consider-
ing specific measures on the basis of the information already
available or brought into the discussion on those measures.
With this approach in mind, we suggest the following specific
steps b4 taken by the Committe-, (in addition, of course, to
early agreement on the matter of providing for the Secretariat
budgetary needs)
1. Receive and consider the early views of the other
member governments on the nature cf and general approach
to the China trade problem.
2. Schedule an early meeting to consider the matter of
pooling and analyzing basic information on the China
problem.
3. Invite member governments to keep the Committee in-
formed, as currentlyas possible, of significant interest
shown by Chinese traders in specific comaodities, whether
or not under international control..
4.. Examine pending COC(JM matters having China Committee
interest, with the view of scheduling those matters for
further consider :tiori by the China Committee.
5. Review thu existing system of monthly statistical
reporting, with the view of considering po aible modifica-
ti.ons for the China aspect, having in mind that the items
covered by the system are now under embargo to China and
will be reflected only by zero figures (subject to what-
ever exports take place as exceptions).
6. Review the existing system of anti-diversion
measures (such as end-use checks, iaport certificates,
etc.), with the view of considering possible modifica-
tions for the China trade.
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