COMMUNIST CHINA'S FOREIGN TRADE IN 1951

• Document Type: CREST
• Collection: General CIA Records
• 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
• Publication Date: December 19, 1951
• Content Type: REPORT

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