CHINA USES FOREIGN EXCHANGE TO BUY STRATEGIC MATERIALS; PORTS OPEN FOR NEUTRAL SHIPS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700090145-0
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: August 11, 2011
• Sequence Number: 145
• Publication Date: October 17, 1952
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/08/11: CIA-RDP80-00809A000700090145-0
CLASS IFICATIONRESTMICTED
SECURITY INFORMATION
CENTRAL INTELLIGENCE AGENCY
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS
COUNTRY China
SUBJECT Economic - i'rade
HOW
PUBLISHED Daily newspaper
WHERE
PUBLISHED Hong Kong
DATE
PUBLISHED 1 Sep 1952
LANGUAGE
REPORT
CD NO.
DATE OF
DATE DIST. /7 Cit 1952
NO. OF PAGES 2
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
CHINA USES FOREIGN EXCHANGE TO BUY STRATEGIC MATERIALS;
PORTS OPEN FOR NEUTRAL SHIPS
The new economic plans of the Chinese Communists require that all foreign
credit earned will be spent for the purchase of strategic mate-vials.
In an attempt to accumulate a surplus of foreign exchange, the Communists
ruled that no foreign credits could be spent during the last quarter of 1951
and the first quarter of 1952 except for the purchase of strategic materials.
During this period large quantities of domestic products were exported but the
accumulated exchange was still insufficient and the Three Antis and Five Antis
Movements were initiated to make up the needed credits.
As of July 1952, the new policy required that a balance be maintained in ex-
ports and imports and that al.j, roreign credits be spent on strategic materials.
The methods to be used in the trade are as follows:
1. Large amounts of domestic products such as tung oil, hemp, raw silk,
hop, bristles, feathers, and hides will be shipped to the Satellite countries of
Eastern Europe where they will be transshipped in sales to Wectern countries
for English pounds or American dollars. These credits will be used to purchase
raw materials for the metal Industries, liquid fuels, etc.
2. Neutral countries and countries not fully accepting the conditions of
the blockade will be approached for barter of goods. Beans, rice, and other
foodstuffs will be exchanged for Indian tires, rubber, printed cloth, tobacco,
etc. Coke will be exchanged for Japanese metals and medicines; rice and bar-
ley will be exchanged for Ceylon rubber and aluminum. Goods to be imported
under this plan must be transported by means of neutral ships to the ports of
the Chu Chiang in South China, Tientsin in North China, and Chin-huang-tao in
the Northeast. These ports have recently been designated as the ports of un-
loading for neutral ships. Previously with the exception of Soviet, Polish,
and Indian vessels, all neutral ships were required to anchor outside of Chinese
territorial waters.
STATE
ARMY
NAVY
AIR
- 1 -
CLASSIFICATION ? RESTRICTED
NSRB DISTRIBUTION
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3. Goods will be imported from Hong Kong and Macao directly or indirectly
through four methods: (a) payment upon receipt of goods arranged by repreaenta-
tivesof the Cocaunist Ban-being Export Trade Company; (b) barter of domestic
products from the ports of Canton, Chiang-mer,, Shih-ch'i, and Shan-t'ou; (c)-by
bills'oi exchange; (d) by using the buying power of private merchants in Hai-yu
and Kov..oon to purchase such items as aviation gasoline, lead, tin, radio, equip-
ment, photography equiiment, etc., most of which falls in the category of smug-
gling.
One other common form of trade which China is now carrying on is known as
ghost trading. In ghost trading, China makes big contracts with the USSR, Eng-
land, Japan, or any other country, knowing full well. that it will be impossible
to fulfill the terms of the contracts, but using the contracts as big propaganda
themes and for clouding international conditions.
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