COMMUNIST CHINA'S FOREIGN TRADE IN 1951

Document Type: 
Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP79S01011A000600010031-9
Release Decision: 
RIFPUB
Original Classification: 
T
Document Page Count: 
13
Document Creation Date: 
December 9, 2016
Document Release Date: 
December 14, 1999
Sequence Number: 
31
Case Number: 
Publication Date: 
December 19, 1951
Content Type: 
REPORT
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t r t n ~~'T I J1 I 0817-n VVIIII pproved For Release 2000/08/29 : CA-R 9S0101lA00060001D031-9 COMMUNIST CHINA' S FOREIGN TRADE IN 1951 lQ The majority of the goods shipped.into China consist of war materials or strategic commodities necessary for the Chinese war effort and the maintenance of existing industrial,plants. These include in part: all types of manufacturing and technical machinery, tanks., trucks, ingots of various strategic metals (aluminum, copper, lead, and zinc), steel and steel products (structural steel, scrap, plate, hard machine steel, bearings and machine tools), industrial chemicals, medicines (sulfa drugs, penicillin, streptomycin, and numerous other pharmaceu- ticals and vaccines), tires, raw and smoked rubber., and petroleum pro- ducts (bunker, diesel fuels, and lubricating oils and greases). In the latter part of 1950 and early 1951, large quantities of all of these categories of goods originated in non-Communist countries and were trans. shipped through Hong Kong to China. However, the present trend shows that although increasing amounts of pharmaceuticals, industrial chem. icals, rubber, and petroleum products are being shipped through Hong Kong (clandestinely or otherwise) to ChIna, the Chinese are relying .more and more on the Soviet Union and her Satellites for their supply of metals, trucks, machinery, and various steel products. 2. The value of Chinese Communist trade with non-Communist countries continued to increase through 1950 and imports into Communist China from 19 IQ 1ARP Fm 1111 A' Approved For Release 2000/08/29 : CIA-RDP79SO101lA000600010031-9 CONFIDENTIAL ,,Approved For Release 2.OOp/08/2~ : CIA-RDP79SOlOl lA000600~031-9 such sources reached a record high in the first half of 1951 as shown in the following table: COMMUNIST CHINA'S NAM; WITH NON-C0N TNIST COUNTRIES (in millions of US dollars) Im t ports K;xports Trade Balance Jan-June 1950 $112 $170 ? 58 July-Dec 1950 302 230 72 Jan-June 1951 360 120 .' 240 3. Chinese Communist trade with non-Communist countries appears to have Callen somewhat, in the third quarter of 1951. It is impossible to estimate accurately the extent or the significance of the fall. Recorded exports from Hong Kong, the port through which two-thirds of the non-Communist trade with CamMunist China was conducted in the first half of 1951, fell by more than half in the third quarter of 1951. While smuggling between Hong Kong and mainland China probably increased in these months, there undoubtedly was a sharp fall in total ex--orts from Hong Kong since imports also registered a sharp drop. It is probe able, however, the some'of the imports which formerly passed through Hong Kong are now carried direct to Chinese ports, or to Macao. It is impos- sible to secure accurate figures on this trade, but it seems evident that Communist China is still able to secure needed strategic materials from non-Communist sources, though with greater difficulty, and probably Approved For Release 2000/08/29 : CIA a TQ(0010031-9 ObraTi CONFIDENTIAL ,Approved For Release 2000/08/29: CIA-RDP79S0101lA0006000 1 031-9 in somewhat reduced quantity, Analysis of merchant ship traffic bears out the conclusion that the volume of Chinese Communist trade has not fallen greatly. Merchant ship traffic generally continued to increase during 1951, reaching a high in July and declining only slightly since then, 3, It is possible that such decline in the trade of Communist China with non-Communist countries as has taken place in recent months is to be explained by a shortage of foreign exchange, 1 During 1951, the trade of Communist China with other members of the Soviet Bloc increased very rapidly, as shown in the following table: COMMUNIST CHINAIS FOREIGN TRADE (in millions of US dollars) Soviet Bloc Imports, Exports Non-Communist Countries_ Total trade Imports Exports Imports Exports 112 170 129 222 1950, Jan/June 17 52 1950, July/Doe 94 123 1951, Jan/July 980?1,050 565 302 230 396 353 420-450 1.60 1,4001,500 725 The imports from the Soviet Bloc, totalling one billion US dollars from January to July 1951, were probably composed almost entirely of military materiels, =30 Approved For Release 2000/08/29 : CIA-RDP79;S0101lA000600010031-9 rnNF-fFNTIAL Approved For Release ?0030/08/29 : CIA-R79S01011A000600010031-9 NW 5, The trade of Communist China with both the Soviet Bloc and with nonPCommunist countries in 1951 showed a surplus of imports over exports. This, import balance is considerably in excess of any reasonable estimate of China's available exchange re: irces and suggests that China has received substantial Soviet assistance in financing this import balance, While the exhaustion of Chinas exchange resources would not necessarily limit China's ability to import from non-Communist countries, it does increase China's dependence upon the Soviet Union for financial assism tance to maintain imports from both the Soviet Bloc and non-Communist countries, and would therefore increase Soviet influence over the direc- tion of Chinaas foreign trade.. Approved For Release 2000/08/29 : CIA-RDP79SO101lA000600010031-9 Approved For Release 20 /08/29: CIA-R 79S01011A00060001QO31-9 TAB B COMMIST AIR DEPENSE CAPABILITIES IN MANCHURIA 1. Present Chinese Communist air defense capabilities are due directly to Soviet active participation in supplyingequipment, opera- tional procedures, training, and, in many cases' Soviet personnel. In assessing such capabilities, the following factors are pertinent: (a) Fighter Aircraft. Approximately 525 first line jet fighters of the MIG-15 type are located in the MukdenmAntung area of southern Manchuria,, Approximately 225 additional first-lihe jet fighters, which are now located in the Peiping-Tientsin, Tsingtao, Shanghai, and Canton areas,; could be deployed for operations in the Muken.Antung area? (b) Early Warning. A radar defense system has been installed and set in operation, with the assistance of Soviet radar engineers, technicians, and advisers, which is believed to give practically contin4 uous ?arly.warning coverage from the Manchuria border south to Canton. A visual system supplements the electronic early-swarni.ng system. (c) Antiaircraft Artillery. Manchurian air defenses include a substantial number of antiaircraft artillery pieces as well as large numbers of automatic weapons0 The majority of these are Soviet manufac- tured 85 mm., 37 mm., and 1207 mm.pieces, Reports continue tO 3.ridicate that the total AAA strength is being increased by shipments of Soviet, 5 Approved For Release 2000/08/29: CIA- 1ici"A000600010031-9 Approved For Release 2000 /08/29 : CIA-RD S01011000600019031-9 equipzhent. Heaviest concentrations are located in the Mukden area, Shanghai, and in the vicinity of Canton. AAA defenses appear to be employed for the protection of the industrial area, harbor facilities, airfields, and major junctions in the communications and supply systems., Reports indicate that the AAA defenses include gun-laying radar. (d) Aircraft Control. The Communist air defense system in Manchuria has the capability for limited ground-controlled interception. 2. Communist air defense capabilities in Manchuria are estimated (a) In the DairenmMukden-Antung$Harbin area of southern and eastern Manchuria, the Chinese Communists possess a major air defense capability against daylight bombing missions. At night their air defense capabilities would be considerably less= (b) Communist air defense capabilities in southern and eastern Manchuria are such that considerable losses of US aircraft could be expected, at least initially, during .a. campaign of systematic air attacks. Under conditions of prolonged air attack, the ability of the Chinese Communists to maintain effectiveness would be in direct proportion to the amount of support which the USSR would render. Approved For Release 2000/08/29: CIA- 7_TS0101lA000600010031-9 Approved For Release /08/29: CIA-RDP79SO1011A00060001QO31-9 CHINESE NATI1TALIST ARMED FORCES 1? The Chinese Nationalist Army has a strength of 451?000 personnel organized into 38 infantry divisions, 4 armored groups,,, 1 paratroop-group,' 3 fort commands, 5 independent regiments, and 2 independent battalions. The bulk of these forces is disposed on Formosa;. some combat elements. are located on Matsu , Quemoy, and the Pescadores Islands. The io 1. t. Arz*.has no significant number of trained reserves, and under present circumstances its mobilization capacity is negligible. The mass induc4 tion of Formosan youths would not be feasible. unless-the US greatly ex- panded its proposed MDAP. Even in this event,,. the dependability and effectiveness of Formosan troops would be questionable. At the present time, the Nationalist Army is short of some types of ammunition, arms,, and other equipment,, and the materiel that is-available is heterogeneous and poorly maintained. Because of these materiel deficiencies, the lack of reserve manpower, and the poor command structure (including the lack of interservice coordination), the combat ef-'ectiveness of the Nationalist Army is poor. - 20 The Chinese Nationalist Air Force consists of 8 combat groups possessing 384 tactical aircraft. Of this total, however, only 121 air- craft are serviceable for combat. These consist of 35 light bombers and 86 piston fighters predominantly of World War II design. Because of the Approved For Release 2000/08/29 : CIA- A000600010031-9 Approved For Release /08/29 CIA-RDP79SO1011A0006000 031-9 lack of spare parts and improper maintenance facilities, the combat effectiveness of this force is very poor. Under conditions of sustained combat, particularly if opposed'by jet aircraft, its capabilities would be.reduced to a negligible factor in a day or two. In'spite of these difficulties., the Chinese Nationalist Air Force is believed to have the organizational structure and necessary personnel to absorb and utilize the additional equipment necessary to make it an effective force. 3. The Chinese Nationalist Navy consists of approximately 15o mis. ceilaneous craft, the largest of which are 7 destroyer-type vessels, Under optimum conditions and provided that. there were no air or naval opposition, the Nationalists would be capable of transporting up to two divisions in assault bv'means of orthodox landing craft and following up with five or six:gatermlifted divisions,, 14. The Chinese Nationalist Forces could not be effectively used for offensive action against the Chinese Communist mainland unless the present US program for equipping. and training these forces were greatly expanded, and unless the US were willing to provide not only logistic support for an invasion but substantial air and naval. support as well. Even so, Chinese Nationalist ground forces could hardly be ready for an invasion operation before mid-1952$ and Chinese Nationalist Forces as a whole are-not likely to be ready in sufficient strength for a large scale invasion operation before 1953. However, certain small units of the. Chi-. nese Nationalist Army are already capable of effective employment in small-scale hit-.and-run landing operations, Approved For Release 2000/08/29 : CIA 1A000600010031-9 ,Approved For Release ?0 /08/29 : CIA- S0101lA000600.01(031-9 p repar a on than would be required for a large scale invasion operation of the Chia nese mainland? 5. In a relatively short time certain selected divisions of the Chinese Nationalist Army could be made affective for rotational service on the Korean peninsula. The Chinese Nationalist Army as a whole could be employed effectively in Korea after a lesser amount of ti Approved For Release 2000/08/29 : CIA-RDP79S0101lA000600010031-9 Approved For Release ~00P/08/29 : CIA-RDP79S0101lA00060001100031-9 ESTIMATE OF TIE PitESIIT STRIIoTH 1PID CAPABILITTES OF ANTI-COMMUNIST OUkRRILLAS IN CHINA A. Their Strength and Location. 1. The maximum total n*nber of effective guerrillas throughout all China which can with any certainty be said to exist at the present time is approximately 175'000. Dormant or potential guerrillas exist in unknown numbers, but the i litre of this category is and probably will'remain small pending all-.out war or revolution in China, 2Q Active guerrilla forces are located for the most part in inac- cessible areas -= mountainous regions and on Nationalist-held offshore islands. Principal regions of. activity continue to be the Pearl River and Canton area the Kwangsi=weichox border, ,the hwangtung.Fukien_border Szechwan, the Chekiang coast, southwestern Yunnan, and scattered areas in the Mongol and Moslem northwest. B. Their Plyysical Composition and Condition avwcraas r.ir r osrr~r 3. The term "guerrillas" is an elastic one since'these-resistance forces are heterogeneous in nature and vary greatly in composition from one unit to another. Generally speaking, guerrillas fall into the follow- ing catezories: (a) ex-Nationalist-forces, some of whom profess allegi- ance, but most of whom owe no allegiance, to Taiwan; (b) discontented Approved For Release 2000/08/29 : CIA-RDP79S0101lA000600010031-9 CONFIDENTIAL Approved For Release 0 ' /08/29: CIA P79S01011A0006001Q (031-9 landlords and peasants; (c) bandits; (d) members of traditional secret societies, and (e) minority racial and religious groups. The most active and effective units are those in categories (a) and (e). Itq Guerrilla forces suffer from a total lack of central direction and coordination, from a relative lack of organization, quite often from lack of knowledge of proper guerrilla warfare tactics, from serious deficiencies in arms and ammunition, and, perhaps most importantly, from an almost total lack of communication facilities. In addition, guerrilla forces subsist on submarginal food, clothing, and medical levels. Co Their Motivation and Allegiance 5. Economic considerations generally outweigh political, and the basic motivating force behind guerrilla activity at the present time is the struggle for existence and self- reservation? 6o Despite Nationalist and independent claims, the Chinese guer- rillas are likely for the most ':art to follow whatever leader and what ever political group can support and maintain them. 7o Such organization and centralized direction as does exists is primarily that now being exercised by Taiwan, The Chinese Nationalist guerrilla effort, however, remains largely ineffectual because of the hindrances of internal Chinese Nationalist politics,. 8. Independent elements continue to claim a substantial guerrilla potential in Kwangsi and Kwangtung. It is believed that the claims of Approved For Release 2000/08/29cC~ T9S01'0Y174600600010031-9 CONFIDENTIAL Approyed For Release W/08/29: CIA-RDP79S01011A000600 1031-9 one of these elements-to sizeable guerril',a assets in being are valid,, but this group does not have the resources to maintain itself without outside support. Their Continuing deolinein Stren h and Ef "activeness 9. Chinese Communist countermeasures against dissident elements have been moat successful; and, with the further'consolidation of control by Peiping and the forming by Peiping of an effective anti.guerrilla militia throughout China, guerrilla strength and activity under present circumstances will probably continue to decline. lop The perhaps' surprisingly low figure of only 1750000 guerrillas should not be ascribed wholly to the successes of the Chinese Communist anti guerrilla program becatuse this figure is the result also of more accurate US knowledge concerning anti-Communist resistance in China. E. Their Present Ca abilities no Anti-Communist guerrillas have at the present time the capability (a) Sporadic raids; ,(b) Occasional sabotage operations; (o) Raids? feints, and diversions against the mainland from the Nationalist held offshore islands; (d) (e) Providing intelligence concerning Communist China, and Providing a nucleus for a resistance movement in mainland Chinas 12 - Approved For Release 2000/08/29 : DP79S01011A NO ONFIDENTIAL Approved For Release 2000/08/29 : CIA P79S01011A00060031-9 NFIDENTIAL 12. The guerrillas at the present time do not have the capability (a) Delay'or disrupt the movement from one front to another of the Chinese Communist armies; (b) Seriously interdict Chinese ComA#aist lines of communi~ cati_)ns or logistic support; (c) Attract to their ranks substantial numbers of defectors from the Communists; (d) Significantly aid military operati,.,ns should a Nationalist invasion be launched in the near future. 130 Guerrilla capabilities are unlikely to increase without sizeable outside support and a :revitalizat.Jon of the Chinese Nationalists, 13 CONFI U ENT1At Approved For Release 2000/08/29 : CIA-RDP79S0101lA000600010031-9