CURRENT INTELLIGENCE BULLETIN - 1955/02/09

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03157465
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: February 9, 1955

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CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS
[ DECLASSIFIED
CLASS. CHANGED TO: IS S C
NEXT REVIEW DATE: 42'
AUTH: HR 70-2
PATE:j bi 14 REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
88
3.5(c)
3.3(h)(2)
TOP
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SUMMARY
FAR EAST
1. Indians foresee Communist attacks on Matsus and Quemoys
(page 3).
SOUTHEAST ASIA
2. French plan joint corporations with Viet Minh (page 3)
3. Burmese minister says country must expand trade with Commu-
nist China (page 4).
NEAR EAST - AFRICA
4. Egyptian premier stresses opposition to pact with West (page 5).
WESTERN EUROPE
5. Adenauer's supporters criticize his policies on German unity
(page 6).
6. Comment on French government crisis (page 6).
LATE ITEM
7. Comment on Malenkov's resignation (page 7).
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FAR EAST
1. Indians foresee Communist attacks on Matsus and Quemoys:
The Chinese Communists intend, at a
time of their choosing, to attack the
Nationalist-held Matsu and Quemoy
island groups,
Comment: Peiping could undertake an
amphibious operation against the Matsus and Quemoys at any time,
Moreover, the Chinese Communists are apparently readying air
bases in Fukien Province which will give them a large complex '
of fields from which they could mount air attacks on the Matsus
and Quemoys as they did on the Tachens.
As Peiping is probably in doubt about
American intentions regarding the defense of the offshore islands,
the Chinese Communists seem most likely first to undertake prob-
ing operations against the Matsus and Quemoys with limited artil-
lery, naval and air attacks.
SOUTHEAST ASIA
2. French plan joint corporations with Viet Minh:
France is planning to turn over to the
Viet Minh a controlling interest in French
industrial installations in the Haiphong
perimeter after the Communists take
over that city in May, according to the director of economic af-
fairs for the French Foreign Ministry. He told American officials
in Paris on 7 February that under arrangements now being con-
sidered, France will retain possibly a 40-percent interest which
will be divided between the present owners and a French govern-
ment agency. No formal agreement has yet been reached with the
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Viet Minh, but Jean Sainteny, French delegate general to North
Vietnam, has been authorized to negotiate.
The French official added that Paris be-
lieves the maintenance of French interests could have a "moderat-
ing" effect on "extremist elements" in North Vietnam, The Amer-
ican embassy in Paris believes that Viet Minh officials have al-
ready been consulted on the plan,
Comment: The Viet Minh would profit
from the technical know-how and capital gained through such an
arrangement, but could be expected to support it only as long as
they find it advantageous.
While much of the impetus for the Sainteny
mission stemmed from Mendes-France's desire to experiment in
"coexistence," it is unlikely that any new French premier will cur-
tail Sainteny's activities immediately. The proposed plan will
probably be explained on the grounds that no alternative gives hope
of salvaging anything when the Communists take over.
3, Burmese minister says country must expand trade with Communist
China:
Burmese minister of trade development
Raschid told an American embassy offi-
cer he is convinced that under present
circumstances Burma has no alternative
ut to expand trade Communist China. He admits some basis
for the fears of Burma's traditional suppliers of manufactured
goods--Japan, India and the United Kingdom--that consummation
of the proposed trilateral trade arrangement between China, Ceylon
and Burma would result in Peiping's capture of a large share of the
Burmese market, He considers this unavoidable, however, be-
cause of the lack of other markets for Burmese rice,
Comment: Burma's efforts to negotiate a
trade agreement with the Soviet Union, by means of which it hoped
to find a market for surplus rice, recently ended in failure,
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Japan, India and the United Kingdom
furnished Burma with imports valued at $122,000,000 in 1953,
a representative year. These were 69 percent of Burma's total
Imports. Communist China furnished only $2,000,000 worth of
goods to Burma in 1953.
Burma's traditional pattern of trade
would be seriously disrupted by the importation in 1955 of as
much as $50,000,000 worth of Chinese goods which it would be
obligated to take under existing and proposed agreements with
Peiping. A large Burmese mission is presently in Communist
China charged with securing Chinese goods as payment for
Burma's rice.
Greatly expanded trade relations with
China would further disincline the Burmese to abandon their neu-
tral foreign policy in favor of closer ties with the West.
NEAR EAST - AFRICA
4. Egyptian premier stresses opposition to pact with West:
In discussing with Ambassador Eric
Johnston the proposed Iraqi-Turkish
defense agreement, Egyptian prime
minister Nasr restated his opposition
e pac an � emp asized his belief that the "internal front" in
the Arab states must be solidified before any action is taken on
the "external front:'
Nasr appeared convinced that his stand
had earned him strong support among nationalists in Egypt and
other Arab states.
Comment: Narrow nationalism and the
avoidance of any formal ties outside the Arab League is a gen-
erally popular policy with most Arabs. In his relations with the
West, Nasr has always been sensitive to popular reaction, real
or imagined. His present position probably reflects his concern
over his own "internal front" in Egypt and popular opposition to
the regime.
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WESTERN EUROPE
5. Adenauer's supporters criticize his policies on German unity:
There appears to be widespread dis-
satisfaction in the Bonn coalition with
Chancellor Adenauer's summary re-
jection of the Soviet proposals of 15
-January on German unification, American officials in Germany
report.
Christian Democratic leaders feel that
Adenauer must make some positive move during the Bundestag
debate on the Paris accords to prove that he "takes the unity
problem seriously." They also consider it important to defer
final adoption of the defense legislation necessary to implement
the accords until the public is convinced that no serious negotia-
tions with Moscow on the unity question are possible.
Comment: Adenauer's Bundestag posi-
tion is being undermined by the cumulative effect of Moscow's
recent unity overtures and ratification uncertainties in France.
Unless a French government favorable to the Paris accords is
formed before the Bundestag debate scheduled for 24 February,
the chancellor may have difficulty in pushing through final ap-
proval at that time. To assuage coalition opinion during the
debate, he may make public his recent request to the Allies for
joint consultation on approaching Moscow for a four-power con-
ference.
6. Comment on French government crisis:
French premier-designate Antoine
Pinay has a fair chance of forming a
government acceptable to the National
Assembly. He seems to have the sup-
port of the bulk of the right, including the Social Republicans
and the Rene Mayer faction of the Radical Socialists. The key
Popular Republican Party is not committed as yet, but Pinay is
expected to offer it major cabinet posts. According to a high
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Foreign Ministry official, Pinay would name Popular Republican
Robert Schuman foreign minister and press for early action on the
Paris accords.
Pinay is a personal friend of the Tunisian
premier, and he has already,taken steps looldng toward continua-
tion of negotiations on Tunisia. Political observers in Paris be-
lieve that new negotiations with Tunisia must in any case follow
the lines already proposed by Mendes-France.
LATE ITEM
7. Comment on Malenkov's resignation:
The resignation of Malenkov as chairman
of the Council of Ministers of the USSR
climaxed a six weeks' period of indica-
tions of controversy over domestic policy
questions probably related to a reappraisal by the Soviet leaders
of the international situation. Despite Bulganin's appointment to
the premiership there is little doubt that IChrushchev is now the
most influential leader in the USSR.
Malenkov's statement that he will be as-
signed "other duties" suggests that he retains some stature and
political strength, and, for political reasons, is not to be destroyed
immediately. The resignation is reminiscent of the demotions in the
1920's, which were followed by purges when opposition continued.
The parallel which Khrushchev drew in his address to the 25-31
January central committee plenum between well-known victims of
the 1930 purge trials and those individuals recently favoring too
heavy an emphasis on consumers' goods appears to be a warning
that further opposition would indeed result in a purge.
There is still no reason to consider
Krushchev the indisputable master Stalin was. The designation
of Marshal Bulganin as premier appears to be an attempt :to con-
tinue the facade of collectivity in Soviet leadership and a reminder
of the military power behind the regime. Despite Bulganin's lack
of professional military background, his appointment to the top
position in the government emphasizes to the Soviet public, and
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especially to the Western world, the importance of the current
Soviet increase in defense allocations.
In public speeches and private conversa:-.
tions, Krushchev has tended to take a more dogmatic and trucu-
lent view of problems of foreign and domestic policy than Malenkov.
Available evidence suggests that Khrushchev, for the time being
at least, will continue basic post-Stalin tactics designed to isolate
the United States and weaken the unity of the Western powers. His
5 February interview with Hearst and Kingsbury Smith suggests
continued Soviet use of "coexistence" policies, although within
this context there is likely to be a greater stress on the dangers
of general war, which the USSR portrays as implicit in US policy.
Molotov's foreign policy speech before
the Supreme Soviet on 8 February was cast in terms reminiscent
of Khrushchev's speeches in 1954, which tended to be more bellig-
erent than those of other leaders without differing notably in sub-
stantive policy.
Some of the imagination and flexibility
of the Malenkov regime may be lost. The emphasis on heavy in-
dustry and agriculture, Khrushchev's specialty, will undoubtedly
be maintained.
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