(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79S01011A000600010020-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 8
• Document Creation Date: December 15, 2016
• Document Release Date: May 25, 2004
• Sequence Number: 20
• Content Type: REPORT

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1. C mist ms's Seaborne Trade during 1951.
C mun ,st China's imports from nor orbit countries reached
a record high of US $360 million in the first half of 1951 and then
fell sharply in the third quarter of 1951. China's exports in the
first half of 1951 fell nearly 50,%, however, from the high reached
in the preceding period. Merchant ship traffic in trade with
Commm ist China (which includes some orbit trade) generally in-
creased during the first seven months of 1951, declining since
then This decline in try with the West has been due in large
part to Western export controls, increased imports from the Soviet
bloc, Institution of a system of selective buying and selling by
the Chinese, and a shortage of foreign exchange resulting from
heavy buying since mid-l950
2 Most of the goods Imported are strategic commodities es-
sential to the war effort. Rubber,, chemicals (including pharmaa.
ceuticals ), and minerals and their manfactures accounted for two- r
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tide of total Impo through Hong Kong (ccludii g Hong .
o trade) both in the second balk of 1950 and
Naft the first ham
of 1951. He Ko 's trade pstte is significant because d>riug
the. first half of 1951 Hong Kong handled tvo-thirdb to three-
fourths of Chin's trade with the West. Hover, the trade
pattern for direct trade is similar, Although Macao and other
ports have assutaed increasing importance. as transshipment points
for goods destined to C nunist China since expanded trade controls
were introduced in Hong Kong in June 1951, Hong Kong continues as
the single most Important source of Cariun1st China's seaborne
Imports. The latest data shows ,that Cammunist China is M741,09
mare and more on the Orbit for her supply of metals, trucks,
machinery, petroleum, and various steel products. Imports from
the West have been largely for 1nduet and transportation in an
effort to build an economy capable of supporting the armed forces,
3. Ccmmiu st China's exports of raw materials of animal
and vegetable origin - such as soybeans, rice, wheat, oils ac-
counted for two-thirds of her total t half of
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1951, ToxtileI sccoMted for 1 mote. Cessation of these
exports would not eez i iy affect the Wester econ since subs-
sttitt s or Western supplies are generally available.
The main. aon-Cam mist trading countries involved in trade
with C aunist China are the Western European countries, and the
United states as an iaporter. India and Pakistan are important
(also as trans-.shipment points) while talaya, a major trading
partner in the lot quarter of has reduced Its trade with
China Considerably since further controls were added in May,
A ~Uwge portion, probably 5O%, of the value of China a s
try with the orbit is seaborne, of the total China trade,
prribabiy two-thirds is carried by ship, It is likely th&t the
orbit seaborne trade is composed largely of non-military goods
while most of the military equipment for Korea goes by lid, As
China imports mainly (other than military goods) machinery, chemicals,
petroleum and metals from the orbit and? ezporta raw materials to
the orbit, overall seaborne trade e bits much the awe pattern
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as deaar$bed fm. nose t
? In tea of tonnap, parobab y-
of the total treide :ied T agpt
Nearly an of Gh da seaborne trade has been carried
in Westem-registered shipdo Probasb7y Teas then 10 Is carried
Soviet and Polish vessej,e, Hr r, another 10% or
aOW
tons Per mon m i.s carried a"a C st c w ned ships that arg
regimtOred nn the Writ?
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IIIc, Communist Ability to Circumvent an Economic Embargo and/or
a Naval Blockade.
U The Chinese Communist ability to continue sea-borne trade
in the face of a U imposed export and shipping would vary with the
extent of enforcement of the controlo As indicated in section I
most of Communist China s sea-bone imports originate in non-
Communist states and are carried in non-Communist shippingd It
is doubtful if the Communist bloc could make available from their
own resources goods and shipping to replace more than a small
fraction of those now supplied to the China trade by non-Communist
states However,, it is probable that a substantial quantity of
goods originating in the west would become available for purchases
by the Chinese Communists in non-cooperating countries and through
trans-shipments of goods sent in normal trade from cooperating
countries to other Communist or .non-Communist countrieso In ad-
dition to the limited amount of Communist bloc shipping that
might be diverted from other routes to carry these goods to Communist
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Chinaa,,, the Comanu mum uQ611T
u e a ar ear aua build
sufficient ships to offset substantially the effect of the
shipping embargo,
loo It Communist ChiaoaOs seaborne imports were greatly
reduced or out off as a result of on economic embargo or a
naval blockade, the Chinese Communists would be forced to depend
on overland routes for all imports The major existing overland
routes into China from the vast are the Trans-Siberian ra1lroaado with
an estimated daily eastbound capacity of 229500 tons? part of which
must be used for railroad supplies (the paralleling BADI; railroad is
not yet completed) truck and caravan routes through Mongoliaaa,, which
could probably handle about 200 tons a day; truck and caravan routes
from Russian Turkestan through the Kanau corridor, about 300 tone ' as
d*yE and the Burma road, not over 500 tons per day and probably in
practise muab lass, Routes from Indo-China could probably not be
utilisesd ~,
15. It is estimated that Communist China received a minimum of
208000 tons of supplies a day vim ship during 1951, Tf'. shipping were
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 embargoe4 i wou impossible for China to receive more than a
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very small part of this tonnage by overland routes from the USSR,
because 1) the Trans-Siberian railroad, with an estimated not capacity
of 22,5OO tons per day eastbound, is already operating near capacity.
in transporting military and industrial goods to the Soviet Par East
and to Chinap A large part of this moves to the Soviet Par East, It
is therefore unlikely that this line would be able to handle more than
a few thousand tonne of additional traffioo 2) The lines in Manchuria
loading from Manchouli to Harbin and from Suifeuho to Harbin have a
eombined capacity of about %4,000 tons a days These lines are not
being utilized to ? full capacity at all tii esa and would be able to
absorb the few thousand tons additional traffic which the Trans-Siberian
might be able to deliver to theme However, this would probably require
the suspension of non-military traffic from time to time as has occurred
periodically in the pact yoara and this would affect unfavorably the
eoouomy of the regiono Even at full capacity these lines can carry only
sa small part of the present total waterborne and overland imports of
Chinao
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