EFFECTS OF OPERATIONS IN KOREA IN THE INTERNAL SITUATION IN COMMUNIST CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A000800050078-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: December 20, 2016
• Document Release Date: February 17, 2006
• Sequence Number: 78
• Publication Date: July 10, 1951
• Content Type: NIE

f
F
COPY NO. I
Approved For Release 2006/03/17: CIA-FRP.7I(1;4&9ffgq5K7fP-2
ET
NATIONAL INTELLIGENCE ESTIMATE
EFFECTS OF OPERATIONS .IN KOREA
ON THE INTERNAL SITUATION
IN COMMUNIST CHINA
NIE-32
JOB NO. ~ ~ EL
BOX NO.
FOLDER ?40. ------
TOTAL DO1CS HEREIN __..
Published 10 July 1951 DOCUMENT NO.
ARMY, USAF reviews completed
NEXT ?i`_V L`
AUTH: HH r'0 .-
tiArE~-~
CENTRAL INTELLIGENCE AGENCY
TO ARCHNES [If
_ ME 1ATELY AM B U ,
ji R6~-A- cAe a .e_.%.4.F1.0.3/17 CIA-RDP79RO1012A00080
 Approved For Release 2006/03/17 : CIA-RDP79R01012A000800050078-2
NATIONAL INTELLIGENCE ESTIMATE
EFFECTS OF OPERATIONS IN KOREA
ON THE INTERNAL SITUATION
IN COMMUNIST CHINA
The intelligence organizations of the Departments of State,
the Army, the Navy, the Air Force, and the Joint Staff par-
ticipated in the preparation of this estimate. All members
of the Intelligence Advisory Committee concurred in this
estimate on 5 July. See note of Director of Intelligence,
USAF, on page 1.
Approved For Release 20067 - 12A000800050078-2
 Approved For Release 200 7,.--
_r;z~T
1. This copy of this publication is for the information and use of the recipient
designated on the front cover and of individuals under the jurisdiction of the recipient's
office who require the information for the performance of their official duties. Further
dissemination elsewhere in the department to other offices which require the informa-
tion for the performance of official duties may be authorized by the following:
a. Special Assistant to the Secretary of State for Intelligence, for the Depart-
ment of State
b. Assistant Chief of Staff, G-2, for the Department of the Army
c. Director of Naval Intelligence, for the Department of the Navy
d. Director of Intelligence, USAF, for the Department of the Air Force
e. Director of Intelligence, AEC, for the Atomic Energy Commission
f. Deputy Director for Intelligence, Joint Staff, for the Joint Staff
g. Assistant Director for Collection and Dissemination, CIA, for any other
Department or Agency
2. This copy may be either retained or destroyed by burning in accordance with
applicable security regulations, or returned to the Central Intelligence Agency by ar-
rangement with the Office of Collection and Dissemination, CIA.
DISTRIBUTION (NIE Series) :
Office of the President
National Security Council
National Security Resources Board
Department of State
Office of Secretary of Defense
Department of the Army
Department of the Navy
Department of the Air Force
Atomic Energy Commission
Joint Chiefs of Staff
Federal Bureau of Investigation
Research and Development Board
Munitions Board
Approved For Release 2006/
 Approved For Release 2006/03/17
E R01012A000800050078-2
T
EFFECTS OF OPERATIONS IN KOREA ON THE
INTERNAL SITUATION IN COMMUNIST CHINA
THE PROBLEM
To estimate the effects of the Korean operations upon the internal political, eco-
nomic, and military situation of the Chinese Communist regime. *
CONCLUSIONS
1. We estimate that :
a. During the Korean war increasingly
drastic control measures have been insti-
tuted and there has been an intensifica-
tion of popular dissatisfaction; to date the
Chinese Communist regime has shown
ability to control the population and
check the development of an effective
opposition.
* The Director of Intelligence, USAF, believes it
necessary to emphasize that this estimate excludes
such broad and significant considerations as the
effects of Korean operations upon the external po-
sition of the Chinese Communist regime. These
considerations include:
a. The effect of the Korean war in denying Taiwan
to the Chinese Communists.
b. The effect of the strong anti-Communist mili-
tary reaction in Korea on any plans that the Chi-
nese Communists may have had for aggression into
Southeast Asia.
c. The creation of a security threat to the Chinese
Communists on their northeastern frontier where
none existed before the Korean operations.
d. The development of tensions between the Chi-
nese Communists and the Soviet Union over Com-
munist leadership in Asia.
e. The dramatic demonstration to the world of
the error of any assumption of Communist in-
vincibility and infallibility.
f. The progressive loss of non-Communist sympa-
thizers among foreign governments and peoples, in-
cluding the British.
b. While the Korean war has not yet
posed a critical threat to the economic sta-
bility of the Chinese Communist regime,
the war has subjected and will continue to
subject the regime to increasingly serious
economic difficulties. These difficulties
are almost certain to increase during the
next year if Western trade restrictions are
rigorously applied.
c. The Chinese Communist regime is
unable to replace from its own resources
the stocks of materiel now being expended
in Korea.
d. During the Korean war the size of
the Chinese Communist military estab-
lishment has been increased.
e. By reason of personnel losses alone,
the over-all military strength of the Chi-
nese Communists has probably not been
seriously affected.
f. However, deployment to Korea and
Manchuria of major portions of their best
forces, increased internal police require-
ments, and the logistic strain of the Ko-
rean war have reduced present Chinese
Communist capabilities for additional
external military operations.
g. The Korean war has increased the
dependence of the Chinese Communists
Approved For Release 20
T 1
 Approved For Release 2006/ - 0012A000800050078-2
on the USSR, but apparently has not ma-
terially changed Sino-Soviet relations.
There are areas of conflicting interests
which make rumors of mutual dissatisfac-
tion plausible, but we have no firm evi-
dence to substantiate these rumors.
h. The Korean war has placed strains
upon the internal political, military and
economic position of the Chinese Commu-
nist regime. While these strains have
not yet become critical, they may well
become so if the war is prolonged. *
DISCUSSION
1. Effects On Chinese Communist
Political Stability
2. We have no reliable evidence that reverses
in the Korean war have created a rift among
the higher Chinese Communist political and
military leaders. Rumors suggest, however,
that dissatisfaction with the course of events
in Korea may have accentuated differences of
view that already existed among them. There
is fairly reliable evidence that military and
political figures of secondary importance have
become uneasy over China's involvement in
Korea and its isolation from the West. On
the other hand, several factors have tended to
insure party solidarity, such as the lifelong
isolation from non-Communist Western influ-
ences and the common ideological condition-
ing of most Chinese Communist leaders, the
mutual interest they have in maintaining a
united front among themselves and with the
Soviet Union, and the strength of party disci-
pline.
3. The initial Chinese popular reaction to in-
tervention in Korea appears to have been one
of pride in victory, and even the later holding
actions were viewed as triumphs when com-
pared with the long series of Chinese humilia-
tions in the past. As the war has gone on,
.popular dissatisfaction with the regime, al-
* We have re-examined the Conclusions of this
paper with reference to the Malik statement and
do not find that his statement in any way affects
the validity of this paper's Conclusions. If the
USSR and Communist China do, in fact, desire a
cease-fire along the 38th Parallel, they are probably
motivated by considerations which include the
military situation of Communist forces in Korea
but which undoubtedly also take into account im-
portant factors above and beyond the scope of this
paper.
ready in evidence before the struggle began,
has been intensified by heavier taxes and levies
in kind, increased conscription and militia
duties imposed on an already war-weary peo-
ple, purges, further disruption of the tradi-
tional Chinese family system, and other harsh
repressive measures. In addition, there is
evidence from reliable sources that among cer-
tain of the more educated groups, including
some ardent supporters of the regime, mis-
givings have developed about the regime's
relations with the USSR and the USSR's in-
tentions with respect to China and Korea.
4. The decline of popular support and the
apparent necessity to impose greater restric-
tions and demands upon the home front have
resulted in the regime's speeding up its efforts
to consolidate further its control of the
country. Terroristic measures to suppress
"counter-revolutionary activity" have been
reinforced by positive steps to strengthen the
public security system, to centralize and ex-
pand militia units, and to increase member-
ship in the Communist-directed "people's or-
ganization." The regime has also been re-
quired and probably will have to continue to
maintain large military forces within China
to assist in preserving order. While the con-
trol measures have thus far been successful in
checking the development of an effective op-
position, their harshness has lost to the regime
the willing cooperation of at least some com-
munity leaders, educators, engineers, and
others whose prestige, training, and technical
skills the regime has regarded as essential to
the furtherance of longer range political and
economic planning. In the long run, these
developments might have serious effects on
the stability of the regime.
Approved For Release 2006/03/17 "Cl`A= i 13R01012A000800050078-2
 Approved For Release 2006/ 01012A000800050078-2
II. Economic Effects of the Korean War
5. There is insufficient evidence upon which
to base a complete estimate of the effect of the
Korean conflict on the Chinese Communist
economy, which, though it has to support an
urban population of over 60 million, is unde-
veloped industrially and preponderantly
agrarian. It is entirely possible that any such
effect would not be apparent within as short
a period as has elapsed and it is improbable
that satisfactory statistical evidence of such
effects would be quickly or readily available
to us.
6. It seems almost certain that the demands
of the Korean war have limited the Peiping
regime's reconstruction efforts to those proj-
ects requiring only the investment of labor,
such as the building of dykes, irrigation sys-
tem, airfields, and roads.
7. Although the regime has been successful in
preventing the prices of domestic goods from
rising sharply, inflationary pressures have
built up since mid-1950, and Western trade
restrictions and rising world prices have re-
sulted in precipitous price rises for certain
imported strategic raw materials and manu-
factured products.
8. Foreign trade with the West was at high
levels in 1950. We estimate that during the
first quarter of 1951 this trade at least re-
mained at the 1950 levels, primarily because
of the sharp increase in imports chiefly of
strategic materials through Hong Kong.
Data on Western flag shipping with Hong
Kong and Chinese Communist ports since 1
April indicate that such shipping has fallen
off significantly and we believe that the vol-
ume of trade has correspondingly declined.
We believe that Western trade restrictions are
almost entirely responsible for this decline in
shipping and that these restrictions will have
an increasingly adverse effect on Communist
China's import capabilities during the re-
mainder of the year. Smuggling and trade
from Communist and non-Cooperating non-
Communist nations will probably increase and
will offset to some extent the effect of these
restrictions.
9. Since the industrial sector of the Chinese
Communist economy operates virtually on a
day-to-day basis,. both in terms of raw mate-
rials and plant maintenance, effective curtail-
ment of imports is likely seriously to affect
Chinese Communist industry. There have
been shortages for some months of petroleum
for civilian use and of certain fairly important
specialized industrial items. Very recently as
a result of raw cotton shortages textile mills
have shut down. The Communists assert
that they are related to import difficulties as
well as to the failure of the cotton collection
program in China itself. However, we believe
the munitions industry, in spite of reports of
plant dispersals and raw materials shortages,
is producing at capacity and expanding.
10. During the large initial troop movements
northeastward in the summer and autumn of
1950, there were serious interruptions in the
rail movement of non-military goods through-
out China. Since that time, although mili-
tary traffic has presumably interfered with the
general distribution of goods throughout
China, and particularly in Manchuria, and al-
though there have been recent indications of
delay in the movement of individual non-
military shipments, there is no evidence that
the aggregate volume of traffic outside Man-
churia in essential non-military items has
been sharply curtailed.
11. The diversion of draft animals and man-
power to military purposes has impeded agri-
cultural production in China, but the country
is not likely to face a critical over-all food
situation in 1951.
12. Although such evidence as we have does
not suggest that the Korean conflict has as
yet posed a critical threat to the economic
stability of the Chinese Communist regime,
the Korean war has forced the Chinese Com-
munists to modify their program of long range
economic development and to place their econ-
omy on a war footing, has subjected the nation
to economic sanctions imposed by the Western
world, has increased inflationary pressures,
and has strained the economic relations be-
tween urban and rural areas. These factors
are likely to increase the economic difficulties
of the government during the next year.
~r FK 3
Approved For Release 2006/0- `01012A000800050078-2
 Approved For Release 2006/
13. The Korean war has increased Peiping's
present economic dependence on the USSR
from two points of view. In the first place,
we believe that the Chinese Communists do
not have the industrial resources to meet their
requirements for continued operations on the
scale of the Korean campaign over an ex-
tended period for even the type of military
equipment now being used by them in Korea.
In the second place, the increased East-West
tension that followed the outbreak of hostili-
ties in Korea is resulting in more effective
Western trade restrictions.
Ill. Military Effects of Korean War
14. The Korean war has resulted in the de-
ployment of major portions of Communist
China's best military forces in Korea and/or
Manchuria. Supply requirements of the war
are taxing heavily Communist China's limited
logistic capabilities. In addition, guerrilla
activity and increased unrest have required
the commitment of large military forces
within China for the maintenance of internal
security. We estimate, therefore, that present
Chinese Communist capabilities for military
operations elsewhere have decreased as a re-
sult of their participation in the Korean war.
15. The Chinese Communists had an esti-
mated 277,000 troops deployed in Korea on 19
June 1951. In addition, it is estimated that
they had 11 armies and elements of 4 armies
and special units in Manchuria totalling
358,000 men. These units constituted a major
portion of their best forces.
16. Chinese casualties in Korea are estimated
to have been 577,000 as of 16 June 1951, in-
cluding roughly 73,000 non-battle casualties
and 16,500 prisoners of war. Among these
casualties have been an undetermined but
considerable number of the better trained and
politically more reliable troops, including offi-
cers and non-commissioned officers who will be
especially hard to replace. There are indica-
tions that the units committed earlier were of
a higher caliber than those recently encoun-
tered by the United Nations forces. Morale
appears to be lower among Chinese forces in
Korea than it was initially and the rate of cap-
ture of prisoners of war has increased greatly.
Approved For Release 2006/0
However, Chinese Communist personnel losses
in Korea probably have not yet seriously af-
fected their over-all military strength.
17. Despite heavy losses, the total estimated
strength of the Chinese Communist Field
Forces increased from 1,770,000 on 1 October
1950 to 1,947,000 on 9 June 1951. Military
District units and the Militia have also been
strengthened.
18. Losses of materiel in Korea have been con-
siderable. Most of the equipment which was
not Chinese-made was of US and Japanese
origin. Communist China's output of high
explosives and military equipment, including
artillery, is insufficient to keep up with the
expenditures and losses of materiel in Korea
and Communist China has no motor vehicle
and aircraft industries. Consequently, as the
original stocks become depleted, the Peiping
regime is becoming increasingly dependent
upon the USSR for logistic support.
19. Relatively few Soviet ground force weap-
ons and little ground force equipment have
been found in the hands of Chinese Commu-
nists in Korea. There are a number of fairly
reliable indications, however, that tanks and
heavy equipment are being supplied and that
some training in their use is being afforded
to Chinese Communist units in Manchuria;
additional reports, probably with some basis
in fact, state that the Soviets have agreed to
equip and train Chinese Communist divisions.
We estimate that there are 10,000 Soviet mili-
tary advisers throughout China, and that
there are some 3,000 such advisers with the
Communist forces in Korea.
20. The Chinese Communist Air Force has
been steadily expanded, especially by the addi-
tion of jet fighters supplied by the USSR. The
Chinese Communists, with a total of approxi-
mately 1,000 aircraft available to them, now
possess a far greater air capability than they
had at the outset of the Korean operation.
21. The USSR has provided almost all the air-
craft, aviation equipment, and supplies now
available to the Chinese Communist Air Force,
and there is substantial evidence that it is
now supplying the CCAF with radar, antiair-
craft equipment, and technical personnel. It
is probable that Soviet or other non-Chinese
R P79R 4
01012A000800050078-2
 Approved For Release 2006/03/17 : DP RO1012A000800050078-2
"volunteer" personnel are operating many of
the aircraft currently available to the Chinese
Communists.
22. The USSR has provided the Chinese Com-
munist Navy with advisers, technicians, and
training personnel, and possibly a few old sub-
marines of the smaller types.
IV. Effects On Sino-Soviet Relations
23. Official pronouncements and propaganda
indicate no appreciable friction between Com-
munist China and the USSR, but on the con-
trary suggest that the coordination of foreign
policy and propaganda and of military, eco-
nomic, and social planning between the two
countries has continued and perhaps in-
creased during the Korean war. However, re-
ports from sources of unknown reliability
indicate dissatisfaction on the part of both
Soviets and Chinese with the Sino-Soviet alli-
ance. As there would appear to be many
areas of conflicting interest and potential fric-
tion between the Chinese Communist and So-
viet regimes, including possible rivalry for
control of Korea, these indications are not
inherently improbable. Any genuine Sino-
Soviet friction would doubtless be concealed as
long as possible.
Approved For Release 2006/03717 : ETA= 01012A000800050078-2
 Approved For Release 2006/03/17 : CIA-RDP79RO1012A000800050078-2
Approved For Release 2006/03/17 : CIA-RDP79R01012A00080005r0 ' Y-6963