SOVIET-SINKIANG ECONOMIC TIES/TRADE AGREEMENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000500090102-6
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 27, 2016
• Document Release Date: March 13, 2013
• Sequence Number: 102
• Publication Date: June 24, 1953
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2013/03/14: CIA-RDP80-00809A000500090102-6
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CENTRAL iNTELL:GENCE AGENCY
INFORMATION REPORT
Chi (Sinkinnz)
Sovlet-3inktanz Lconoz.j..c Agree.ments
-e:s IS UNEVALUATED r:F0AYAT:ON
CAE DISTR. olg
C r: PAGES 5
NO OF ENCLS.
REPORT
Jur= 53
1. Aft*' the Zolehovis revolution, ..he Soviets found it rather diSfloult to ro-ostabIlsh
the prosperous trade that existed bet.esom Tsarist husela and Sir...taag. 1=1921,
hcr.over, agants of Sibvmoshtork were su:comeful in negotiating several trads
contracts fox Sizkicng ttt1., wcol, hides and casing.. In 1922 Ilrvalsatort
rftplated Sibvmeehtorg as tto prl.tary Soviet trade accacy in S5nislang and ccuattlutac
to operate :bore until 1924. Fron 1524 -z 1929 Vneentorg and Vein:ars (Vaic
Solt:laze Aktennernos COsneetvo - All Ualon Czoparative 7'ra4e Agency) operated in
Sinkiang In 192 Sheretitor,7 (Wool T:a4im4 Igetti) tool: :Nur Srast trade interests
in Sinklani and t=ntinurA to -ncrAtts there xlt1.1 Sovnintorg (Soviet-5;nlisrig Trade
Ationzi) was estatlisnfl: in 1931. ::saa.wr.Ile, another So7ie, trade agoncy, Neltnuly
Sindisat (Petroleaz. Symaicale), :pertitt,din SInklang fra= 192t. to 1929 in the field
of supplying Staxic.n.? with petrc1e'...z. proaarts and allieu wanufacturad it such as
earopene lantarao, Lti eta. After 1332, anu up to ouatinti of the
Soviets fro,: Zink:lam,.in Crtrner 2,cvnintdz, wa- the vole Zoviet trade Agency
in vii^xInn..,
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Provincial -:railinK: Cc.:tty, a dovarn....ent
organization which dealt ai t.. cvsintorg. thi:
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Z41.11-tai in Nay 1935 concluded a treaty with the 1.;.7.3n, allcwin the Soviets :lany
special privileges in Sinkiang "1.-1-d4.g the establishment cf eil;ht Soviet agencies.
The USSR,:' in return gave tne 3inkiar. :;ovcrnment a =edit of ilve million gold
rublaa, to his aana OT Anrnrrlina te, .......: sc.
negotiated O7 Sovaintorg and the Provincial Trading Company. :his credit was not
established through the exchange of currency, but was actuall- a barter agreement.
Tho Soriets, through Sovsintorg, credited the Provincial T.radin Company with five
millio- gold rubles wo:th of their 7.anufactured ?;ood: and soieLtific end technical
knowledge. The Provinr.inl 'n....Alnv Company, in turn, wan ohar:,:ed with aeeing that
the terms of thie treaty and Its sub-agreements were fully complied with by the
Sirilrianc aovarnment and wan responsible to repay Sovsintori:, with. Sinkiang ram and
manufactured products, this credit, or 9.omn", of five million old rubles plus four
D ar cent intr.:root. The Provincial Trading ComFany wac also obligated to make a
full accoUnting and settlement cf 7nis credit within five year:, of the initial signing
of the treaty, by 194o.
4. 6.s .tantiched pret-'-ously, the tradtr treaty specified tbat each sab-agreement under
the five Million cld ruble =edit was tc he nectisted aeparatelv. BY 3.940, some
30 of these sub-ag.reeent: had been negotiated and comple-ed As each of these yap
extremely cr-pli-a?ed the detalla of two leap onmplicated sub-
agreement*. They are:
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kiggLitgAlgjag_ggigaigliamigingstl Under tale sob -agreement Sovsintorg vas to
supply passenger eara, basses, trucka, and road bailding equipment, It was
else agreed to have Soviet engineering and speoialist anpervision in this field
and that all salaries of Daretray (Sinkiang Main Beam g Ageney) employees
warn to .1:+e paid by the Sinkiang Government. Aside from the not vahielts and
anparyieion
of the Incilding program, Sovainterg was also to ',apply tarime
Soviet manufaotured goods such as lewelry, trinkets, rea0k.made-olothirg, etc.
The Provincial lrading Company was to then sell these 'coeliac and give the money
to Destroy for purToess of meetints. ita payroll. Dut, as thm ProTlasiAl Trading
Company had no outlets for this -lerchaneise, another sub-agreement was made with
Swesimterg. This called for llovaintor,; tc dispose of the meroh&ndiss in Sinkiang,
for the havineitl Trading ;empani, for a &mall bernantaza of tta_mrofit and to
tarn the balanca of the profit over to :iorstroy.
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6. In 1937 Governor 3heng instituted the first three-year reconstruction plan we,
negotiated a thi..-d treaty with the UlaR, through Sovsintore, far euelticnal
credit of fifteen million gold ruble. In 1')36 the local currency was devaluated,
with the reorganization of the Provincial Commercial Bank as the Sinkleng Commercial
Bank. Umn-chi fflamea were elinina+Pd an replaocd by S'ekieng dollars, with paver
ourrezdy of 1G dollars. nn ly41 (-serve:mar oten g instituted his second,
and last, throe-year reconstruction plan, without any further trade agzeement with
the USSR. In 1948 one Siekieng dollar was equal to CNC $ four.
7. In addition to the barter trade that was carried on between Sitkieog and the USSR,
under the afore mentioned three trade treaties, Soyeinta-g also vackod with the
Provincial Trading Comparry and local merchants by giving an advance oftzede against
future delivery of mercteneiee, in ttu nmo-.-It of 25% of their =dere. Towards the
onang's reign ever SI,e,feeg, approximately .1941 to October 1943,
and especially after the arrest of meet large marchante, prect4cally all of this
trade passed into tho hands of the Provincial Trading Company. The Provincial
Trading Compaq,- also did some buying on its own Ann tracing vita Saraintorg
according to common local business practices.
8. The Provincial Trading Compaey delivered to Sovaintcrg, an specified by them, the
following SiWciang producCe in compliance with the sub-agreements of the trade treatiee:
a. Ilmjklaat lemb (karakul), sable, fox, marten, squirrel, wolf, ermine, wild
cats, marmot, banger and bear
b. Gettig: harness, camela, cows, sheep, goats, pigs and OXAZ
c. 2gx.412Agg: horses, oow, pig, sheep and oxen
d. Araggo camel, sheep and goat
0. iiktuaw
eheop, goat and pig
f. /aacelliNgualal hog hriatlea, cotton, grain, Ehotam rugs, gold,
platinum, petroleum products gna various minarels
and ores that the Sinkiang Soviet ?ftelg impedition
unceveree and mined.
9. The three Soviet-Sinkiang trade treaties negotiated and implemented by Soveintarg
and the Provincial Trading Company totaled tm 22 million gold rubles 'worth of
trade between the USSR And 5:4tklang from NEy 1935 to 0:tcracr 1943. This Wads
had the following result on the development of Sinkimagt
a. e4eotric generating plants were set up in Urunclli (Tihwa), Ladle. (Liming),
Chugachak (Tahetang), LashgAr (Shu.fa), and Aqsu (Akosa). There wire two
electric generating stations built in Euldja, one for aity lighting and the
other, ? smaller station, vas inatelled at the lo:al military headquarters.
The latter was later traodiferred to Sttiting foe vas in lighting that pity.
The Station in Chugachak was A small one, only furnInhing light to the
rdgional gcvernarts Zeman emu several other government buildings. Zaoh of
these electric generating plants was installed under ? separate sub.agreement.
The planning and construction of all stations was done under the supervision
of Soviet engineers. In Euldja there was an electric flour mill conAtruated
next to the electric generating plant. This was arranged for underA separate
nab-agreement.
b. The installation of telephone ltations in Uru=chi, Xuldja, Chaguobak and Labor
was also covered 'y eeparate aub-airreamente. Each telephone station had 10C
units. In Uramchi, in addition to the oity teleph,no station, there was a
second station consisting of 25 units. This station was loceted in the
Governor's Yemen and con.lected it with all of the hilitary ahd'oechrrity offices
of the city. A total or about 1,11)0 miles of telepoone line we- laid in
Sinkiang.
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c. Radio transmitting stations were installed in all the, larger oettlents
Sinkiang, the two mcst powerful stations being in Urttchi aid Kashgar. Three
mobilo radio transmItting stations were brought to Urumchi and en equsl rmber
ware se: up in th Aqsu Region, or dintrict.,
d. Typorapnic offices were esta'-11i0-.ed in Urunohi, Kuldja, Chaguchak and liasi.zar.
In Urumabl, the Soviets also installed a supplementary typcgraphic office for
their publication 'Pioneer". A lithographic,: office: for th-e orinting of paper
carreacy, was set up in Jr-chi. Special machinery was also installed at the
lithographic office for offset printimc.
e. In Ure.--c,14, sciceduled bus service was established for passenger travel within
the city. Machine shops farmarsifaztur?eg4 and repairing weapons Were uet up
at the Fimagu A..-r-.nal; northeast cf Uramchi. A wool and far washi:ag plant and
canir.gs plant was built by Sovsintarg an thencrthveetarn Urumchi.
Oa this sane estate Sovnintorg also built a garr.ge which rbpaired and serviced
not only their cwm truckL, but also the -ruck CW17CyC which passed through
Urumcni carrying military supplies and equipient to the Chineae Army.
f. In Tartan, Scesintorg construstod oil 7r. sing factory and a cotton and wool
cleaning ;lent. This :quip:sent was originally ordered by BadJa K.tam Hadji, c
wealthy Mcclem ler, but &Star his arrest Were confiscated by. government.
Oil pressing factories were'alse set up'in Uras111, Ktildja, Suitin an4 two in
Chuguchak.
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6. Pharmacies and hospitals were ,Jstablinht.1 inUramohi, Kuldja, Suiting, Chuguehak,
Turf an, Aquu and Kaabgar. SoTiot doctors tsck over all hospitals and Fharmacioa.
Experimental st_ations were ant up in Urumahl, Kuldja, ChugaChal. and Shareeame,
dealing with a.7-isulture_ agronomy and Oni-Al husbandry. All the exporimenta
and activities of these experimental station were ouporvised by Soviet ociontiota
and specialists.
The Sinkiang Soviet :lining Expedition surveyed tha entire j=ovioce in 1935 to 50X1-FiUM
1936-and then r.ommeaced to mine minerals and hares?neeled by the USSR. I heard
that they wore mining wolfran are Jn 'dors Talasnd wore exploiting the gold
mines in Altai,ia.t,t 6.114:1 Umzrh1. 7bey (IL...AU/shed eAliay oficou in most of
- ',,chn,1:fanc for thete laboratories.
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,in Utiachi vt1s1 ma: headed by a Scmict. The invostigstors and abentaworealso
Soiiets, but were sent into Sinkiang disguised as Russians who had escaped from
thelrolS4 From 2935 on, wham:kale arrests of Snap/one, Moslems, and Chineof
thronghont the proyistee began. kran people wholevre very fame to the Governor,
wmpsmace, AnA 1nuidted b.,- the Soviets.
The hiviete, witmeat queer...tea, lucre the
reelAmlers of $inkieng trkna My 2.935 to the tine of their famed departure' in
Ontoba, 1943.
CONFIDENT:AL/LO CFFICIA.Z om.y/sw.uarry trzromorrioN
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