INFORMATION ON PETROLEUM PRODUCTS IN CHINA REQUESTED IN REFERENCE TO CASE R-7780

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01049A000500170003-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: November 9, 2016
• Document Release Date: June 21, 1999
• Sequence Number: 3
• Publication Date: March 5, 1952
• Content Type: REPORT

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ow. 41.10 M. 400 41111.11.
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Information on Petroleum Woduct
tequeited fa taterenc-e see
March, 1952
mfort Pattern 1930937 - 49/1951:
Radily able information on imports of petroleum products into China
and Memeheria p *' to 1937 shows a oonsistent pattern. However, what little
data ti be cai1e,ted for any post World War I/ year does not exhibit the as
cht'actert?tic. It ahould be emphasized that the years following 1937 were year
for
tions in China and Manchuria, when portions of China were deMinated
er of the temporarily successful protagonists. As a consequence,
ose years are extremely difficult to use. Import figur
rOars1 likewise,
mot be taken as indicative of normal require-
products in China for a different reason. The period from
1946.1949 wa one of ro,con8truction, when efforts were being made to rehabilitiate
a country devastated by years of war. The demand for petroleum proctacts was very
e1astc under such circumstances. Temporary shortages of coal, and a wriroked tram
portation system which kept the ?eel from industrial boilers forced the consumption
of fuel oils above al* historic use patterns.
? Statistics for tho importa of retroleum for 1949, 1950 end 1961
to secure in their entirety. The import statistics for these years hcn in sb1e le
below, are for petrolewm. products shipled from Hong Kong to China a
nearby Portuguese port from which, it is generally believed, magy or tMao petrole
products were re-shipped to Communist China.
(See Table 1).
From another iouroe, it has been possible to reconstruct a pre.mar
pattern by area. This table is, however, only an approximation and can be dependod
pon only to give a rough description of the distribution of 1940
(See Mable
Entryamd Trn?pOrttt?z
*ally, Shanghai and lionz Kong have been the
ort s of entry for
p.troleum products. The other major port cities, however, ve also served as points
of destinaticm. River port citiee along the Yangtze have been key points for the
distribution networks established by the American and British oil ommaniesvtioh
established and developed the Chinese petroleum market*
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Security Infonaut 021
In South Chtnaa Ron g Kong, Swatow, Amoy and Pomba, were, before and after
World War II large ocean terminals for reoeiving petroleum products from tankers*
These products were. packed into five gallon tine, pumped into barrels or piped to
secondary inland petroleum merchandising stations nearby. Such cities included
Canton, Kongmoon, Wocohow, Samehui and Bengchom, Sup olies for intan Province were
brought by rail from Indo China before the war and after the oornpletion or the Surma
Road, Kunming served as a bulk package redistribution point* ged and barreled
goods' moved inland by water, truck, animal and human back. The railroads carried
ome petroleum products, but rankmd far below watercraft in volume. Actually, the
amounts carried inland have a1way beou insignificant and limited mainly to the
product keroaene, 'Which before the war was used to light the proverbial lampa of
China, The bulk of eetroIeum products have been oonsumed in the narrow coastal belt
that contains the Chinese port cities*
In North China, Shanghai, Teingtao and Tientin were the principal 000011
terrnin1B.Yangtze river terminals included Wuhu alinkieng, Pukow, Kiukieng,
glingki, Chancsha Icharr, Chungking, Tungchoo, Haiakwan (Nanking),
Chagtehe Shasi Wsdhaien, Soochow, !Cashing, Haimen, Niagpo end Wenchow,
In huria, Newchang was the chief port of entry for petro1euii produote before
1935,
supply
prod
in Mean tung Leased Territory, INA and is, a major petroleum product
Present ports of entry !pliee of petroleUm product rchin China
are somewhat spoculativa. It is believed that the majority of these
tn re being shipped .n*o Manchuria and China over the Trans.Siberian
s of CKth, Manthnria,- and Korea, ?roper by
yolnATIF; dr1771f7rsiRaNAncludes the most oomple
ities in China, Thoy were derived ham information furniehe4 tho
jor oil ovepanies who dominated the prewar and &media
rket,
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railroad and oonneotinc railroad links. Manchurian transloading points are located
in the border towns of .aanehouli and Suifenho. However, the actual capacity of the
Chinese to transport petroleum products in bulk by railroad tank care is uncertain.
Estimates of the number of ta* ears in China vary from 200 to 400 cars with an
average loading capacity of 30 metric tons.
Considerable volumes of petroleum pro-
ducts therefore, could be moved into China in railway taak oars over the China.
Nhnchurian coastal railway network. However, the different gauge of Manchurian
rAilroads does not allow continuous ahipment of petroleum products in. Russian tank
ears.
Evidence is accum latin that petroleum products are being pumped into enaii
Chinese tankers at Dairen and moved into Shanahai and other northern Chinese port
citiea in coastal shipments. This method may be dictated by the shortage of tank
cars as well as by consideratione of better speed and of greater volume. Packaged
petroleum products would not suffer from these same shippinc difficulties.
The movement of Russian oil tankers from the Soviet Far East to North Chinese
Ports has been observed and confirmed. (See Section 5).
Domestic conmaption, wartime, inmediate postewarlz group and area;
An economy like China's that must import practically all of its pntr
product d that has been beset by twenty years of political and milittry confeeion,
cannot hams a ncrmal consumption pattern in the accepted sense of that term. Under
the necessity of unavailability* China progressed far toward the development of
liquid fuel substitutes during the last war. Furthermore, this same scaroity
has forced the development of the practice of ruthless and rigid fuel allocation
systems under the Nationalisto and the Communists. Just how flexible the Chinese
economy can be under the dmial of petroleum products, or just how little is needed
to run the economy during extreme emergencies, may be determined, in part, from the
following table. This material was nested by an. experienced American observer
durinc the last mar. It repreaents the official allocation schedule of the Chinese
Nationalists. It was in effect to; the time of the oomp/etion of the Burma Road
end When the Nationalists, fighting alongside the Chinese Communists, had taken the
offensive against the Japanese. It is significant, however, that very few of the
major al-consuming centers were then in Chinese hands. This schedule* it Aaould be
noted, includes military needs. It should be especially noticed that when military
- 6
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and governmental organization allotments? are subtracted from the total, little was
left to be distributed to the Chinese civilian economy. Total civilian consumption,
according to this information, rehed only about 6300 metric teas in 1945.
(See Table 3 -e Fuel allocation chart)*
If Table 3 gives some idea of the lower possible limits of the cor'umption of
petroleum produots in China under World War II conditions, Table 4 illustrates the
pliability of the upper limits of domestic coneumption, Working backward from
material furnished by one American oil company official, a rough pattern of oonsumption
by area in post-war China can be derived. It is an estimate and rests on intermetion
for the year 1947, The report from which this estimate was worked out was one on
the activities of the Chinese Petroleum Corporation& an agency set up by the Chinese
Nationalists to share in the marketing of petroleum products. Basing the calculations
an the pereentage of import allocations set up by the Chinese government in late 1946,
the totals listed in the table were reached. For example, if the CPC were rseorted
to be selling 400,000 gallons of rotor gas in the Shanghai area per month, and this
quantity represented an allocated 10,5% of the total imported for sale by all companies
in this area, the total sold in Shanghai equaled 3,809,524 gallons, or 11,403 metric
tons per month,
(See Table 4 - 1947 domestic consumption by
Military and civilian consumption etiatea 1)51 nd 1952:
Total annual military consumption estimates vary in range from 175,000 metric
tons to almost 500,000 tons per year. The low figure here given is derived by
calculations based upon information from Chinese Cammunist sourceo; the higher
figure is furnished by G2. According to the Chinese Communist Press, the refinery
at Tumenwas furnishing about 40 per cent of their total military needs in 1951*
Present estimates of Yuen refinery production range from 70,000 to 100,000 tons
manual production. Taking the Lore conservative lower figure, 70,000 equals 40%
of X. X, therefore, equels 175,0u0 metric tons.
02 gives the following estimate, based upon their logistical amputations:
Daily Military Requirements
for Petroleum Products
(in VI)
Chinese Air Forc6 SOO
Ground Forces 900
Navel Forces 50
IZbO
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and overnzi
left be be
according to this
(See Table 3
If Table 3 gives
organis
Beourity Information
on llotments are subtracted from the total,
ibuted to the Chinese civilian economy. Total civilian consumptton,
tion,
ached only about 6500 metric tons in 1945*
allocation chart)*
sone idea of the lower
petroleum products in. Ch
pliability of the upper
material furnished by one Amer
by area in poet-war China can be derived* Tt is an esti
for the year 1947, The report from which this estimate was worked out was one on
the activities of the Chinese Petroleum Corporation, an agency set up by the Chinese
Nationalist:" to share in the marketing of petroleum products* easing the caloulations
on the percentage of import allocations set up by the Chinese government in late 19460
the totals listed in the table were reached. For example, if the CPC were reported
to be selling 400,000 gallons of motor gas in the Shanghai area per month, and this
under World War
ossible limits of the oonsumption of
II conditions, Table 4 illustrates the
its of domestic consumption*
Working baokward from
an oil company official, a rough pattern of oons
te and rests on inform
tion
ion
quantity represented an Allocated 10.5% of the total imported for sale by all
in this area, the total sold in Shanghai equaled 3,809,524 gaflonc, or 11,403
tons per month*
Se Table 4 - 1947 domestiC onsumption by area
doi
ntptton e8ttt 151 and 952:
Total
coneum tion estimates vary in range froxn 175,000 metric
tons to almost 500,000 tons per years The law figure here given is derived by
Calculations based upon taformation from Chinese Communist source: the higher
figure i furnihecL by 132* According to the Chinese Communist Press, the refinery
at rumen wa rurniBhi11 about 40 per cent of their total military needs in 1951,
Present atiiates of Yumen refinery production range from 70,000 to 100,000 tons
annual production, Takiiig the more corservative lager figure 70,000 equals 4O7g
of X. X:, therefore, equals 175,0e0 metric tons.
02 gives the followine eettmate, based upon their logistical c ons;
Daily Military Reuirents
for Petroleum Products
(in lin)
Chinese Air Yore 500
Ground Forces 900
Naval Forces 50
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Nanking
Rmakow
ChiaIgking
Tedngtao
Tientsin
Ci ton
TABLE 4. 1947 D
S-414-11.44
SECURITY INFORNATZA
in csuapt1on of Pet urn
Areal Pattern
Diesel and
1113110110
Fuel Oil
136,840
112,252
B64,000
23,950
101,017
9,600
17,107
12/
6,000
10,000 c/
51000 21
4,880 2/
17,107
23,950
17,107
246,061
12,000
bJ
230,269
With the except/cm of Chungking caisu*ptlon, the other
Army Attache report from Shanghai dated DeceMber 1948.?
source reported 1,768,112 metric tons imported in this
12/ Not available*
2/ Arbitrarily allocated.
ti This figure derived from Amer ici Ccm sulate
13/
6,000
60,000
950,480
dnct
in China
Iambs Oila
Total
78
9
12,000
24
1,125,092 il
h32,591
12/
23,107
2
120
2/
20,000W
1
120
29,227
2
180
30430
2
60
77,167
5
12,504
1,439,314
99
25X1A
figures are derived from information given in
This is only a rough approximation, however, Lnce the same
same year. Thiel leaves 328,71$ metric tone unaccounted fbro
of 1948 POL sales in Chungking foS9 phh dated 31 Jiivary 19490
e/ Conversion factor, all products, $03 barrels/ metric ton.
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Thus 456,1250 m?tric tons of petroleum products were needed b the Chinese Communists
in 1951 for military accomplishments, and approximately the same noLnt will be
needed this year if conditions continue as they are at present.
Considered in relation to the evidence given in Table 3 both of these estimates
maw be high.
Civilian consumption aepend, of couree, upon the degree of restrictive measures
taken by the Cammumists since their takeover. ?rioing petroietti products above the
ability of Chinese consumers to pay can effectively cut down domestic itonsumption#
and strict ratiorinE systems can keep oonsumption low. That the Communists are
tighteninE up on consumption is evidenced br the comparison given below.
Rationing Schedule of 1btor Fuel in Shandlai
lists
Private Cars - ?24-60 gals. no.
te Lorries-------70.96 gals. me.
cyc1es---------.842 gels. me,
Taxis-----------------60 gals. month
Business lorries------140 gals. month
25X1X One a
25X1X
ach to
Under Communists
6e20.gals. month
20 gals. month.
11.2. gals. month
abolished
20 gals. month
eetimate of civilian consumption in 1951 mnd 1952# may be 25X1X
taken by using the percente estimates given by
25X1XG
for 1947 iYeu i Table 4 is t
petroleum products needs* and
If the domestic cons tion area pattern
as an approximation of Chinese postewar "normal"
25X1X
percentage estimates applied to than, the result
should be an approximation of petroleum product requirements in China in 1951 and
1952. (See Table 5).
Previous estimates
by this office have been around 500,003 tons per re-
nd they have rested primarily upon the assumption of relatively high levta of civilian
productivity. However, the degree to which consumption of petroleum products can
be scaled down under extrema necossity? according to the evidence of actual fuel
allocation duringWorld War II by the Chinese Nationalists (Table 3), can be very great.
State Daprtent Inoruing Telegram #453. Oct. 26, 1949,
d from Petroleum Press Service, August, 1948# pi, 180# State Department
ee Herz ..!eng* flArrtky ig 1951. "Notes an the Economy of Communist
April 1-14, 1951,"
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Product
Motor G o
Diesel Fne
in
0i18
Kerosene
Lube Oils
25X1X
if the crisis
cut still more.
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Table 5
Domestic Consumption Estimates
195171952
Estimate of % of Cutback
504 "or less"
50% diesel, 10-20% fuel oi1..-25% of
total of two products used
50%
no cutback
ic Tons
73,050
237,820
65,135
12,504
3t%?189
demands, these amounts can be
Shipments of petroleum products by maritime veuaels, 1950i.195
In 19504 ane Russian Tanker carrying approximately 10,000 tons of POL arrived
in a Northern Chinese Poit. There were no other confirmed Asiatic or European
Satellite tanker shipments reported for this period.
In 1951, the Polish tanker Karpaty" carried 9500 tone of kerosene n ina,
and seven Soviet tankers carrying an average load of approxiamately 10,000 tons
re reported moving toward Chinese ports. There were no reports of non-Soviet ships
sighted in this traffic.
The Polish Tanks
aca" was reported to have delivered 10,000 tons of kerosene
to the Chinese Cwagiunists in January 1952.
Presently known totals .51 of petroleum products reaching China in
to the Bloc in 1950 1951 and 1952, therefore, were:
els belonging
/950 ----- 10,000
1951 ----- 80,000
1952 10,000
1tiotbo0 metric tams
In addition, tae tanker "Kettleman Rills" is known to have offloaded 11,000
ns of kerosene at Tsingtao early in 1950. ,This tanker made two additional trips
tween Black Sea Ports ama Dairen in late 1949 and early 1950. .6./
in quantities and methods.
It is the considered opinion of the responsible officers in the Office of Naval
Intelligence that, with the exeeptiun of some mall amounts of fuel oil getting into
China by the method of excess bunkers, little or no petroleum products are being
muggled into Manchuria, North Korea and the rest of China, The area around Hoag Kaig
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has been, and still in, a tender spot as far 2,8 snuggling has been concerned, but
with the imposition of a local export ban an petroleum product? in July 1950,
and with the tightening up on petroleum product leakage by Hong on and Macao
port authorities, supplies reaching the Chinese Communists are pow thought to b.
negligible. Efferts to quantify the reports currently being received have thus
far proved to be of questionable value. According to a sampling of such reports
collected and analyzed for the year 1951. some 56,000 metric tons of petroleum
products reached China through Hong Kong and Macao Clandestine transhipments,
Local autho itiee in Hong Kong sad Macao are continuing to increase their efforts
to stop snuggling, and it can be reasoned from accumulating evidence that they are
meeting with some success,
Methods or smuggling have been variedb and have Changed as local contrels have
stiffened, Immediately after the imposition of export controls in Hong Kong, some
enterprising ?free...traders" would transfer the contents of their personal gasoline
tanks in Communist territory* refillinc them at local filling stations several times
each day. In this period, however, the greatest quantities of petroleum products
reached Red China in the holds and on the decks of the many junks plying between
Hong Kong and the Camnunistnainland, Excess bunkers of small fishing craft* and
larger merchant ships have been reported to have been pumped into Communist teaks
Few areas in. the Far East have not been reported as being points of origin of
this traffic. The attractiveness of the price offered by Communists an the local
markets has evidently made smugglers of many honest men. There is little evidence,
however* thee historically established oil companies or their employees have been
at the center of it.
It is impossib/e to estimate the dollar values of this traffic since the vaiuee
of the undetermined quantities have varied so greatly under the stimuli of scarcity,
risk and looal conditions.
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