RECOVERY OF COMMUNIST SHINA'S COAL INDUSTRY FROM THE CULTURAL REVOLUTION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001600010096-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 22, 2016
• Document Release Date: October 1, 2009
• Sequence Number: 96
• Publication Date: November 1, 1968
• Content Type: IM

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25X1
Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Recovery of Communist China's Coal Industry
from the Cultural Revolution
Secret
ER IM 68-146
November 1968
Copy No.
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WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.'
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by le.w.
GROUP 1
Excluded from outomalk
downgrading and
declocrificol;on
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
November 1968
Recovery of Communist China's Coal Industry
from the Cultural Revolution
Summary
The Chinese Communist coal industry is recover-
ing from the low levels of production of late 1967
and early 1968 and now may be operating at a level
approaching that of 1966. Production of coal de-
clined substantially in 1967, perhaps from 220 mil-
lion metric tons in 1966 to 190 million tons in 1967.
If present trends continue, total production may
reach 200 million tons in 1968.
A variety of evidence indicates that coal pro-
duction has been increasing since April 1968.
Industrial shortages are mentioned much less fre-
quently than during the winter of 1967-68. The
political situation has stabilized to some extent,
and workers have probably returned to their jobs in
most mines. In addition, recent Chinese claims of
large increases in production at the major mines and
complexes, while somewhat ambiguous and propagandis-
tic, suggest that coal production has been recover-
ing.
Although the coal mining industry has been set
back by the disruptions of the Cultural Revolution,
there is little evidence of damage to production
facilities. The facilities are capable of sustaining
production rates higher than those attained in 1966.
Moreover, the completion of new facilities since
August 1968 indicates that construction, which had
been halted in 1967 and early 1968, has been resumed.
Note: This memorandum was produced solely by CIA.
It was prepared by the Office of Economic Research.
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Therefore, with political stability, growth in the
coal industry may be quickly resumed.
Recovery in the coal industry provides a strong
impetus for the regaining of lost levels of produc-
tion in other parts of industry. The key electric
power, chemical, and metallurgical industries,
whose operations have been handicapped by the coal
shortages of the past two years, will particularly
benefit from the return of the coal industry to
more normal levels of production.
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Recovery from the Cultural Revolution
1. It has been reported that Vice Premier
Hsieh Fu-chih said, in late November 1967, that
coal production in 1967 would be 190 million tons.
Using this figure as a base, production for 1966
and 1968 can be roughly calculated from fragmentary
information available. The evidence indicat
h
es t
at
production declined sharply in 1967 and has recovered
t
o some extent in 1968.
2. The Chinese Communists recently claimed that
und
th
..lam
er
e
Ministry of the Coal Industry increased by 39 percent
numerous others claiming large increases at individ-
l
i
ua
m
nes and mine complexes indicate the extent of
th
d
e
ecline of production in late 1967 and early
1968. Most of the reports on individual mines
claim that monthly production has increased over
various periods of time but do not relate cu
r
t
r
en
production to production in previous years. However,
in a few irs
4- it is claimed that production
has surpassed the level of 1966 or has reached an
alltime high. The overall implication of these
claims is that total production has not attained
the level of 1966 and is still far below the peak
level of 300 million tons attained in 1959.
3. Some evidence for the decline of coal pro-
duction in 1967 is provided t.y trade data. Coal
exports -- which constitute only about 1
percent of
total production -- held up in 1967, but have fallen
in 1968
. Exports of coking coal to Japan in the
first half of 1968 were only 61
000 ton
,
s, compared
with 467,000 tons in the first half of 1967. Anthra-
to 79,000 tons during the same period. v+1Onvthevother
h
d
an
, coal exports to Pakistan may increase from
about 200,000 tons t:iroughout 1967 to 400,000 tons
in 1968.
4. In late 1967 and early 1968 reduced coal
output caused a decline in the generation of electric 25X1
power.* These reductions in coal and electric mower
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output also had an adverse effect on the important
chemical and iron and steel industries of Communist
China. These adverse effects were heightened by
sporadic disruptions in the systems of transporting
and distributing coal to industry.
Level of Output in 1966
5. By the end of 1966 the Chinese coal industry
had almost fully recovered from the Leap Forward
disaster. Most of the small, uneconomic mines had
been closed, and improvements had been made in
techniques of coal mining and coal cleaning. More-
over, the detrimental effect of the general disregard
for normal maintenance and developmental practices
during the Leap Forward had been largely overcome.
Also, new mines with a combined capacity of about
30 million tons were completed between 1962 and 1966.
Production in 1966 was about 220 million tons, and,
while only about 70 percent of the peak production
in 1959, it was of a higher average quality. The
rate of utilization of mines was also probably much
more conducive to long-term growth than it had been
in 1959.
1967 -- Revolution in the Coal Mines
6. In early 1967 the factional strife associated
with the Cultural Revolution strongly affected the
coal mining sector. The harassment by Red Guard
elements and the fight for leadership within mining
facilities eventually led to army intervention at
many of the major mining centers. These disruptions
reached their peak in July and August 1967. Factional
strife at it liviaual mines and complexes lasted any-
v.-here from a few months to a year or more. Neverthe-
less, there is ample evidence of low production rates
throughout the last half of 1967 and the first quarter
of 1968.
7. Production is believed to have declined by
about 15 percent, to 190 million tons in 1967. Pro-
duction claims at 18 major mining bureaus which pro-
vided almost half of total coal production in 1966
suggest that production in 1967 fell by nearly 25
percent.* However, roughly 30 other mining bureaus
For estimates of coal production in 1966-68, see
the Appendix.
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and large mines do not appear to have been as greatly
affected by the Cultural Revolution in 1967, and
production at these mines probably fell less -- per-
haps by no more than 10 percent. Although labor
problems and inadequate management at these mines
may have caused a decrease in production, the lack
of publicity suggests that factional struggle was
not as severe at these mines. Production from
locally controlled small mines reportedly increased
in a number of provinces in 1967. Even in those
small mines, where problems are known to have existed,
the slight increases claimed suggest that they suf-
fered smaller declines than did the larger mining
complexes. Thus, it is estimated that their annual
production remained roughly the same through the
three years 1966-68.
Production in 1968
8. After another flurry of violent disruptions
in early 1968, the political situation at many of
the large mine complexes apparently was stabilized,
and production began to rise. Some of those mines
that had major factional strife in 1967 -- for
example, Kai-luan and Ching-hsi -- probably are now
producing at a rate near that of 1966. However, in
other mines the disruptions did not reach their
peaks until 1968, and production, which fell sharply
in the early part of the year, has not fully recovered.
Many of the mines that have not reported production
increases in 1968 may fall into the latter category.
It is estimated,, therefore, that production at the
30 large mines for which detailed estimates could
not be made, fell by another 10 percent in 1968.
Small mines, after slight declines, are probably
operating near the rate attained toward the end of
1966. Overall, it appears that production in 1968
will be above the 1967 level and may reach 200 mil-
lion tons.
Construction
9. Although most of the increase in output in
1968 represents the restoration of previous levels
of production, a part of the increase reflects the
delayed contribution from new mines completed in
1966. No new mines or coal washing facilities are
known to have been completed from early 1967 to
August 1968. However, since the national coal
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conference in May 1968, there has been increased
emphasis on tunneling and new construction. In
August 1968, it was announced that a new hydraulic
mine and.a 3 million-ton coal washing plant had
been completed at,tthe Kai-luan mining complex in
Hopeh province. In October two new mines with
individual capacities of "hundreds of thousands of
tons" went into operation, one at Hsing-t'ai in
Hopeh and the other in Sinkiang.
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Estimates for Coal Production in 1966-68
Estimating the level of coal production for any
year since 1957 is extremely difficult. The offi-
cial data for 1958 and 1959 were greatly inflated
and no official data have been announced since. The
present estimate of coal production was derived as
described below.
According to a Red Guard newspaper, Vice Premier
Hsieh Fu-chih stated, at the end of November 1967,
that coal production would be 190 million tons in 1967.
This figure was used as the point of departure. It
was assumed that small mines produced 25 percent of
total production in 1967, which seems reasonable in
light of past performance. Production was then esti-
mated for 18 individual mining bureaus in 1966. Re-
ported changes during 1967 and 1968 indicate that mines
under these mining bureaus, which produced 101 million
tons in 1966, produced 75 million tons in 1967 and 94
million tons in 1968 (see Table 1). At those large
mining bureaus for which calculations could not be
made, production probably fell by about 10 percent in
1967 and by another 10 percent in 1968. Small mines
are believed to have produced about the same amount
in all three years. Table 2 shows the resulting pro-
duction series for 1966-68.
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Estimated Production of Coal
at Selected Mining Bureaus in Communist China
1966-68
Million Metric Tons
Mining Bureau
Fu-shun
Liaoning
15.0
11.9
14.0
Kai-luan
Hopeh
13.8
9.3
12.6
.`Fou-hsin
Liaoning
.13,0
11.5
12.0
Ta-t' ung
Shansi
.10.0
5.6
9.4
Huai-nan
Anhwei
10.0
7.9
8.4
Chi-hsi
Heilungkiang
9.0
7.5
8.4
Ping-ting-shan
Honan
6.6
4.0
5.4
Shuang-ya-shan
Heilungkiang
3.3
4.2
4.5
Ching-hsi
Peking Shih
4.6
3.2
3.8
Hao-pi
Hon an
3.8
2.0
2.9
P'ing-hsiang
Kiangsi
3.0
1.9
2.5
Liao-yuan
Kirin
1.5
1.6
2.0
Wu-ta
Inner Mongolia
1.7
1.3
1.9
Ching-hsing
Hopeh
1.3
1.4
1.5
Tsao-chuang
Shantung
1.4
0.8
1.4
Hsien-kang
Shansi
0.8
0.5
1.2
A-kan-chen
Kansu
1.2
0.5
0.9
Kuei-yang
Kwei ch ow
0.6
0.2
0.9
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Estimated Production of Coal in Communist China
1966-68
Million Metric Tons
1966
1967
1968 a/
Large mining bureaus
for which detailed estimates
were possible b/ 101
75
94
Large mining bureaus for which
reporting was insufficient to
make detailed estimates 74 c/
67 d/
60 e/
Small mines and mining bureaus
(less than 1 million tons
each) 48 f/
48 g/
48 f/
223 190 202
a. Preliminary estimate based on current trends.
b. See Tab Ze 1.
c. Based on the estimate that production declined by 10
percent in 1967.
d. Residual.
e. Based on the estimate that production declined by 10
percent in 1968.
f. Based on the estimate that total production was un-
affected in 1967 and 1968.
g. Twenty-five percent of the total production.
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