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TOP SECRET
ECONOMIC ESTIMATE
Denial of Far Eastern resources to the US or the USSR would not seriously jeopard-
ize either power's war-making capacity in the early stages of the conflict. Both the
US and the USSR are, in fact, now less dependent on the strategic materials of the
Far East for the operation of their civilian and military economies than they were
before World War II. During and following that war, alternative and less distant
sources of some materials have been developed, and substitutes or synthetics have
been devised. Stockpiling programs have been instituted for those materials not readily
available elsewhere and for which no satisfactory or practicable substitutes exist.
There are, however, some economic objectives in the Far East which, as the war
was prolonged, would assume increasing importance to the US and the USSR and
which would influence strategic planning for the region. These objectives could be
threefold: first, to build a potent self-sufficient war-making complex in the Far East;
failing that, to assure access to those strategic materials necessary for full-scale func-
tioning of the domestic war economy; and in any event to deny both the components
of a self-sufficient war economy and key strategic materials to the enemy.
Self-Sufficient Far Eastern War Economy.
That the Far East possesses the potential for a self-sufficient war economy was
amply illustrated by the Japanese in World War II. If either the US or the USSR
consolidated its control over those areas needed to make up such an economy, realiza-
tion of the region's potential could be decisive in a prolonged war. At the outbreak of
hostilities, the US, through its control of Japan, would hold the key area in any such
regional economic system. The USSR, with Korea and China added to its own Far
Eastern holdings, would possess much of the most important remaining area. It
is
pertinent to note, however, that while the US could establish a limited, albeit costly,
Asiatic war economy without access to Korea and China, the USSR would be unable
to establish any large-scale war economy in the Far East without access to Japan.
Japan now is and will probably long continue to be the most important industrial
country in the Far East. Despite war damage, postwar deterioration and uncertainty
with respect to Allied reparations policy, Japan possesses a greater industrial capacity,
in terms of existing plant and reservoir of trained industrial manpower, than all other
countries in the region combined.
The value of Japan as the industrial center of a potent war economy, however,
would depend largely on the extent to which other areas in the region could furnish
those raw materials needed by Japan's industry. Without an adequate and assured
supply of food, coking coal, iron ore, steel alloying minerals, tin, natural rubber, and
petroleum, Japan would be an economic liability rather than an asset to any controlling
power.
If the US were to exploit the Japanese war potential fully, it would be necessary to
supply Japan, over long lines of communications, with many materials which the US
itself must obtain from the Far East-tin, steel-alloying minerals, rubber, fibres, and
9
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"ocrText": "TOP SECRET\nECONOMIC ESTIMATE\nDenial of Far Eastern resources to the US or the USSR would not seriously jeopard-\nize either power's war-making capacity in the early stages of the conflict. Both the\nUS and the USSR are, in fact, now less dependent on the strategic materials of the\nFar East for the operation of their civilian and military economies than they were\nbefore World War II. During and following that war, alternative and less distant\nsources of some materials have been developed, and substitutes or synthetics have\nbeen devised. Stockpiling programs have been instituted for those materials not readily\navailable elsewhere and for which no satisfactory or practicable substitutes exist.\nThere are, however, some economic objectives in the Far East which, as the war\nwas prolonged, would assume increasing importance to the US and the USSR and\nwhich would influence strategic planning for the region. These objectives could be\nthreefold: first, to build a potent self-sufficient war-making complex in the Far East;\nfailing that, to assure access to those strategic materials necessary for full-scale func-\ntioning of the domestic war economy; and in any event to deny both the components\nof a self-sufficient war economy and key strategic materials to the enemy.\nSelf-Sufficient Far Eastern War Economy.\nThat the Far East possesses the potential for a self-sufficient war economy was\namply illustrated by the Japanese in World War II. If either the US or the USSR\nconsolidated its control over those areas needed to make up such an economy, realiza-\ntion of the region's potential could be decisive in a prolonged war. At the outbreak of\nhostilities, the US, through its control of Japan, would hold the key area in any such\nregional economic system. The USSR, with Korea and China added to its own Far\nEastern holdings, would possess much of the most important remaining area. It\nis\npertinent to note, however, that while the US could establish a limited, albeit costly,\nAsiatic war economy without access to Korea and China, the USSR would be unable\nto establish any large-scale war economy in the Far East without access to Japan.\nJapan now is and will probably long continue to be the most important industrial\ncountry in the Far East. Despite war damage, postwar deterioration and uncertainty\nwith respect to Allied reparations policy, Japan possesses a greater industrial capacity,\nin terms of existing plant and reservoir of trained industrial manpower, than all other\ncountries in the region combined.\nThe value of Japan as the industrial center of a potent war economy, however,\nwould depend largely on the extent to which other areas in the region could furnish\nthose raw materials needed by Japan's industry. Without an adequate and assured\nsupply of food, coking coal, iron ore, steel alloying minerals, tin, natural rubber, and\npetroleum, Japan would be an economic liability rather than an asset to any controlling\npower.\nIf the US were to exploit the Japanese war potential fully, it would be necessary to\nsupply Japan, over long lines of communications, with many materials which the US\nitself must obtain from the Far East-tin, steel-alloying minerals, rubber, fibres, and\n9\nfor OLCRET"
}