TUNGSTEN SITUATION IN CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R004100430010-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 14, 2016
• Document Release Date: February 12, 2001
• Sequence Number: 10
• Publication Date: January 19, 1950
• Content Type: REPORT

Ilf
?KRINION R PORT CD NO.
Approved For Wo0457RNP4Ciiii/CM
V ? ? ? .1.1.3t.. J.01
COUNTRY'?
SUBJECT
PLACE
ACQUIRED
China/B se Kone/Macao
Tungsten Situation in China
CONHDENTIAL
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DATE OF IN
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DATE DSI(
19 JAN 50
NO. OF PAGES 4
NO. OF ENOLS.
(USTED BELOW)
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SUPPLEMENT
REPORT NO,
1. The princiea/ tungsteneproduciue belt in China extends from Nanchang._
Niangsi, southwest along the mountains, and then along the Hnnanelaanetang
border. Mere than 7$ percent of the tangsten comes from Kiangsi. Small
quantities have been produced in Hi/angel, Yunnan. Fukien and SOPei. while -
mister euantities are reeorted to be mined in Sinkiang and shipped oveelaad,
to the USSR.
2. There are several large tungsten mines in China but the bulk of the 77rc-
' trZi.
dietioe comet from hundreds of =all properties, some of which are operated
by a single family. Young cblldren start mining as soon as they ean wield a
hamelr. PatPut rises sharply after the growler.: season when a large number
of farmers tarn to mining tungsten.
3. Production fiqPres for tungsten are as inaccurate as figures for tin.
Members of the National Resources Conrission sPend a great deal of
time juggling figures to justify their jobs. Even they do not know the
actual production for all China because a large mount of the oatnut is
Produced clandestinely and smuggled out of China. In some cases ereatled
00mOntratetecarry a Chinese Nationalist Government exnort nermit secured
througlebribing officials.
4. Zn 1948 Chinese production of tungsten concentrates al.xtrenti4r avaroached
preeh'orld liar II -peak years. About 11,500 metric tons of tungsten cancan-
trates averaging V03 were mined in 1948. This elue a large shilment n:
,DA0 concentrate produced in 1947 brought 1948 exports up to 13.00C trels.
NRO is believed, to have ahieeed 9,000 metric tons; the rest was weugeled
out 107 government and URC officials, and by nrivate firma and individuale.
Arm officers, government officials and Chinese banks bought and smuggled
concentrate for the following reesons: ,
a. Smuggling profits are high.
b. People Prefer to hold exportable goods rather than depreciating currency.
Production during the first six months of 1949 was estiented at 4,500 metric
tons. ? The decrease in production rate was ceased be a Price droe, bandit
activities resulted in increased transport charges) and officialst
RCA ON -1MMIT/COUTROL - U.S. OFFICIALS oar
DiSTRISUTION
This document is ilc.:eby regraded to
CONFIDENTiAL n acce:da.lce with the
letter cf 13 Cclu:er 'i:73 f:om the
Director c; Central Irls:i:sance to the
Archivist C the United Ciales,
Document No.
NO CHANGE
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ApproveciForkWerage-2001103/1 :CIA-MOM
Auth:
Next Review Date: 2008
?H CONFIDENTIAL
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lemnnee for larger squeeze. Shipments exceeded emanation because poor
neoples whe haebeen beideeg tunesten concentrates in 10-50 catty bags, sold
stocke for gold bars because they leered that the Conrunists would confiscnte
exportable products.
as of 29 November 1949, the Communists hee
not captured more than 300 tone ef tungsten, which they shIpped to Shanghai.
NRC-oweed mines are estimated to have proeucea in 1948 less than 3,500 metric
tons of tungsten concentrates, 65% W03, but this estimate may be low because
some was sold to KWong Shing Cheong (a Hong Kane exeort firm) for the personal
accounts of NRC members. Most of IIRCIs exports were nurchasea from miners by
the brokers NRC had in every small tenesteneeroducing town. The Ziangsi
Tungsten Administration mai similar Rwangtang and. ?Innen offices teerated by
NRC apparently were overstaffea and inefficient.
When Hong Kong ericee were high NRC was buying concentrates from the miners
for as low as 20 percent of the Hong Kong Twice. Private firma could pey a
higher price than NRC, pay off officials, "bur" an export nermit, pay trans-
port costs to Hong Kong, awl still make 100 percent profit. Meanwhile, miners
barely earned enough to buy sufficient fooe. In 1949 ARD raised purchase
nrices, but rising food coats more teen equalled the iacrease, and production
started to fall.
Until Nee 1949 URC held a monoeoly on the sale of tungsten concentrates, but
tungsten brokerage and eroort firms (of which Kwong Shing Cheong wns the
largest) were able to buy concentrates by paying NRC official. If a firm
became too large, Elle officials would demand so mach sameeze that the firm
would lose its profits.
10 KWong Shing Cheong, weich has its head office in Hong Kong and branches in
the tnegsten-producing areas of Kianesi, Hunan end Kwangteng, hes always
kept bank accounts low and. apeearea to be in ae6or financial condition to
prevent eaeing high squeese. It is owned br T. 0. wn-To and. Company, Hong
KDAgv (Which to vell-situaterl financially) but this is net known by any
Hong Kong banks or other firms. When Nwong Shine Cheong quotes a shipment
to USSR buyers, T. 0. wonG and Company quotes a similar shipment of the same
tonnage to London and Nee York.
11. MNG will try to operate NWong ShIng Oheohg under the Communist regine, but
is doubtful that Le will vecceed.
Vernally Most trngsten from Elanesi is carriel to the Fp and. Nan Rivers
and shepeed north to Shanghai on small boats. Most lewangsi and Hunan pro-
duction is shieseed'to MACRO on junks; then nart is ihineea to Hong Kong.
Coolies, who change at each district boundary, work on a contract basis and
charge as much as the traffic will bear. Transnort charges are te,:i;her than
the original erice. Smugglers often sent heavily-armed guares with their
shipments.
13, The Communist advance south canned NRC to fey tungsten by Central Air Pe-ens-
nort Coreoration (CATO from Kanchou. Kiangoi. to Canton, sna then shin it by
boat to Hong Kong.
lL NRC sends large shiements to gone Kong but most private shipments are smuggled
on junks to Hong Kong and Macao in small lots of a few tons each*. Rene Kong
and. Macao exnorters collect these smalllots until they have a good size
ahipment to offer to foreien markets.
&Jong Shing Chong shins concentrates narchasea by 5te brokers in 0111711 and
aleso buys from snugelers, who like to deal with this coenany, aIthonen it
'pays the lowest nrices for their concentrates, beepatee it nroviftee thee with
be,lo And food free in Hong Kong.
16. Concentrates shineees to Bong Kong eften hnve to le ,eehee. ane sereeneen Thiel
toretemes done by erimiteve notboks ir &LC rine. eSsong Sheng Cheong hne
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a small plant at 20-22 Beldher's Street, West Point, with a small magnetic
separator and a 'mall ball mill, where it treats its own ores and those of
other firms. Kwon. Sling Cheong heels T. O. WONG and Company's tin smelter
in Hone Kokt Hong Kong to reduce arsenic content of tungsten ores (at the
rate of four tons a day0.
17. On 4 November 1949 the Kwong Shing Oheong warehouse held 300 metric tons of
tmagsten concentrates belonging to five Hong Nang brokers. Another 240 metric
tons, nearly all of which were smumeled, were believed to be held in Hong Kong
by other Private firms and banks.
18. During 1948 and 1949 tungsten Concentrates were exported from Hong Yong and
Macao by the following firmswot
20.
ao T. O. Wong and Co., which is the largest private expnrten in Prince's
Bvilding.
b. T. K. Li and Co. Ltd., Windsor House (This is also known as the Wah
Chang Co., and, operates the Glen Cove, New York, tungsten plant).
c. Union Trading Co., York Building.
a. Tonltn' and Co. ,Wing Building.
e. L. Ronaon and Co., French Bank Building-
f. Southwest Industrial Corp., York Building.
& Wing WO Hing, David House
h. Jardine Matheson and. Co., Peadar Street.
i. Mutual Trust Co., Marina Rouse.
j. ?Hong Kong Canton Export Co., French &ankBtilding.
k. C. Arnulphy, French Bank (Arnulnhy exports for his own account as well
as for his company, the Hong Kong Canton Export).
1. Burman Tong and Co., Marina Roy:! '5,
m. Chan Ran Po and Co., 6 queens Road.
n. C. N. Hammond and Co.,, Union Building.
to. Hang Tai and Ynngs, Eayamany Building. '
n. Bank of China, Hong Kong Bank:Building.
q. Central Bank of China, Pedder Building.
r. Rational Resources Commission. East Point, Hennessy Road.
According to Hong Kong officials, exporte of tungsten concentrates in 1948
totalled roughly 3,300 metric tone, of which 2,400 metric tons went to the
USSR, 600 tons to USA, 160 to Great Britain and the rest to other Ehropean
countries. According to this figure, only -It of the 1948 China inIngsten ex-
ports were shipped. through Hong Kong.
Several hundred tons are believed to have been shipped through Macao, mostly
to the USSR. However, shipping companies will not stop in Macao for less than
150 tons of concentrates.
.W4A4in.! conTRM u.s. iontc:A7, aNLY
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CENTRAL INTELLIGENCE AGENCY
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21. Trade figures of the Rona Kong Government for the first nine months of 1:149
are as follows:
iMport Xport
GI cul.v.) (Dieu's)
Central China 209
South China 74,225
South Korea 1,200
Macao 3,157
USA 24,829
Great Britain 11,320
Belgium 4,077
:France 4,426
Holland 1,008
Sweelea. 2,435
USSR 2,471 (149 net. tons)
Total Imports 78,791 Total Exeorts 50,566
(4752 Metric Tons) (3,050 Metric "one)
Hong Kong ernort figures are said to be reaeonably accurate, but import
figures are known to be much too low because /ergs anounts of mum/ea
concentrates are not reported
22. Two shipments were said to have been made to the USSR during the sumer of
1949,2 but they did not appear in government export figures.
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Often bags of tungsten concentrates have been covered
with fish to avoid disclosure when junks were searched by custors.
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1111441.qammt. This is a complete list of Hong Kong tung7,ten ex-
7-,rters except for the Yangtze Sup-Ay Cornoration, a cover company for
EES1102=X3.
*44C-14,PicOITROL - OifFICIAL)OW?
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