GENERAL CONDITIONS IN FUKIEN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R005000640003-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 15, 2016
• Document Release Date: February 2, 2001
• Sequence Number: 3
• Publication Date: June 20, 1950
• Content Type: REPORT

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INFORMATION RE-PORT CD NO.'
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COUNTRY'
SUBJECT General Conditions in Fukien
CONFIDENTIALDATE DISTR. 20 J(J
NO. OF PAGES
50
PLACE 25X1A
ACQUIRED
NO. OF ENCLS.
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DATE OF
INFO.
SUPPLEMENT TO
REPORT NO.
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1. In February and March the city of Foochow underwent an economic crisis,
partially caused by the rationalist blockade which had effectively stopped
foreign trade and greatly reduced coastal shipping, activities which normally
support one-third of the city?s population. Widespread unemployment and
pilfering developed in the city.
2 There were serious shortages with resulting high prices of commodities not
produced locally in eufficient quantities, such as rice, wheat flour, and
sugar. Earnings failed to increase in proportion to prices, and workers
were paid in rice, the quantity being sufficient only for one person. )Dven
persons considered wealthy before the Communist occupation of the area had
difficulty securing .essential commodities.,
3o Foreign businessmen were leaving the city, as were many Chinese merchants who
either emigrated to Hong Kong or entered the Philippic esm illegally. Thus, the
sources of funds needed to finance imports and now production quickly dried
up. Loans from pawn shops were difficult to obtain because cash was short
and because owners of the shops hesitated to accumulate a large supply of
articles in view of anticipated riots.
4, Poor harvest prospects increased the general;dsterios:atioa and nullified the
efforts of the city authorities to ease the situation by sending the poor into
the surrounding rural areas. Bral conditions were made worse by the presence
of Communist troops, although they 'helped the peasants and paid for the materials
they consumed?
5o In early April the food situation began to Improve as a result of new crops
in the interior and the repair of transportation facilities. Rice, flour,
sugar, pork, beef, and peanut and other vegetable oils reappeared in the
markets. However, purchases wore limited, by the shortage of cash circulating
in the city. The prices of rice, salt, pork, beef, and electricity rose
sharply in February and dropped sharply in April, but still remained higher
than the January level of prices, except for pork, which dropped to the
J&v=Lzy level.
This document is hereby regraded to
CONFIDENTIAL in accordance with the
CONFIDENTIAL letter of 16 October 1978 from the
Director of Cenral InteiLgence to the
CLASSIFICATION COI FID IAL
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CENERU INT ,LLIC 'CE AGENCY
6~ Traders maintained secret radio contact with Hong Kongo and, despite the
blockade, trade with Hong Kong was reopened, and the value of the Hong Kong
dollar increased. The presence of bananas on the markets indicated that
smuggling was taking place between the mainland and Taiwan although Nationalist
and Communist governments tried to prevent smuggling. Black market rates
continued about equal to official rates for currency, and at times even fell
below theme On 22 April, exchange rates were as follows-.
1 oz. of gold
JMP
1,250,000
1 US dollar
imp
39,000
1 BK dollar
imp
6,000
1 silver dollar (coin)
JIP
20,000
7. Despite the unstable economic situation in the city of Foochow and in :6?ukien
Province, no organized political opposition to the Communists Appeared in
February, Marche and April. Communist propaganda continues to be effective
among the younger generation, who are loyal to the Party. Residents believe
in a final Communist military victory, but delay in the invasion of Taiwan has
lowered morale. In February, at the peak of the economic crisis, people were
wavering in their loyalty to the Party, Party discipline was weakening, corruption
of authorities was becoming evident, and conversion to Communism was becoming
more difficult. An old separatist movement remained which Foochow residents,
say may demand local autonomy for the province if the Communists are unable to`
provide a substitute for trade with Western nations.
8. Businessmen have remained aloof from Party and governmental affairs, and have
been hostile when asked to support the Party financially. Peasants have not
been cooperative with the authorities, and the agrarian problem was not solved
by issuing land to tenant farmers, since they did not have the money for seeds,
fertilizers and other necessary equipment. Banditry and guerrilla activity
still add to the difficulties of the government. Blame for the poor local and
national conditions has fallen upon the shoulders of the Communists.
9. Most of the military activity in the province has been centered in the southern
section, around Amoy. The guerrilla activity which occurred on the outskirts of
Foochow, locally believed to be supported by the Nationalists,*' has resulted
in Communist plans to eliminate guerrillas and to dispose of questionable
persons. No large military forces are now stationed in Foochow, the regular
police force having been sufficient to maintain order. Some transient troops
were temporarily located in the city in April.** Soviets have been entering
and leaving the ports of the province, but their business is not known.
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0 Specific accounts of guerrilla engagements are contained in
* p~. Militar activities developing in Fukien during April 1950
are discussed in
25X1A
CONFID IAL
CON l TIAL
Approved For Release 2001/03/05: CIA-RDP82-00457R005000640003-7