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NATIONAL ARCHIVES AND RECORDS SERVICE
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CORRESPONDENTS OR TITLE
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RESTRICTION
Memo
Re Statement of Policy by N.S.C. on Southeast Asia
12-29-51
A
DECLASSIFIED
Memo
For Senior NSC Staff from James S. Tay, Jr. re
1-18-64
Southeast Asia
DECLASTIFIED, 6/2011
2-1-52
A
Report
C.I.A. Report re Indochina, Burma, & Thailand (SE-22) 3-4-52
A
Memo
For Socy. of State & Defense from James S Tay, Jr.
DECLASTIFIED
1-18-24
re Southeast Asia
3-13-52
A
-Memo
For N.S.C. from James S. Lay, Jr. re Southeast Asia
4-15-52
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Memo
For the N.S.C. from James S. Tay, Jr. re Southeast
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Asia (attachment)
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SANITIZES, 11/2007
Report
C.I.A. Report on Communist China (SE-27)
6-5-52
A
Report
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6-19-52
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Report
N.S.O. Sucks Status of Projects as of 6-23-52 Declarefied 1/2014
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Memo
For the N.S.C. from James S. Tay, Jr. re NSC 124/1
6-24-52
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DECLASSIFIED
Memo
For the N.S.C. from James S. Lay, Jr. re NSO 124/1
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1-14-d4
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GENERAL SERVICES ADMINISTRATION
GSA DC 73-495
GSA FORM 7122 (7.72)
—
CONFIDENTIAL
COPY NO.1
FOR THE PRESIDENT
TOP- SECRET
OF THE UNITED STATES
SECURITY INFORMATION
029443
SPECIAL ESTIMATE
PROBABLE EFFECTS OF VARIOUS POSSIBLE
COURSES OF ACTION WITH RESPECT
TO COMMUNIST CHINA
INTELLIGENCE
ACENCY CENTRAL
LUNITED STATES OF AMERICA
SE-27
Published 5 June 1952
CENTRAL INTELLIGENCE AGENCY
DECLASSIFIED IN PART
E.O. 13526
Authority LP.HST 2012.008 #32
DOWNGRADED TO CONFIDENTIAL
NARA PMH Date 12/17/2015
Project NLT 81-15
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0 HC NARS, D 11-10-12
WARNING
This material contains information affecting
the national defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
TOP SECRET
SECURITY INFORMATION
SPECIAL ESTIMATE
PROBABLE EFFECTS OF VARIOUS POSSIBLE
COURSES OF ACTION WITH RESPECT
TO COMMUNIST CHINA
SE-27
The intelligence organizations of the Departments of State,
the Army, the Navy, the Air Force, and the Joint Staff
participated with the Central Intelligence Agency in the
preparation of this estimate. All members of the Intelli-
gence Advisory Committee concurred in this estimate on 29
May 1952.
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PROBABLE EFFECTS OF VARIOUS POSSIBLE COURSES OF
ACTION WITH RESPECT TO COMMUNIST CHINA
THE PROBLEM
To analyze the current status and effectiveness of controls on trade with Commu-
nist China, to examine the probable effectiveness of certain additional pressures which
could be applied against Communist China, and to estimate Communist reactions to
these measures.
ASSUMPTION
A continuation of the present situation or an intensification of the fighting in
Korea.
CONCLUSIONS
1. Present free world controls on exports
pel Communist China to rely on overland
to Communist China have not prevented
shipments from the USSR for virtually
the build-up of Chinese Communist mili-
all its imports. Such a blockade would
tary strength. However, these controls
not be effective unless it included Port
have somewhat retarded the development
Arthur and Dairen.
of Communist China's economic poten-
tial.
4. This blockade would subject Commu-
2. Even if present controls were extended
nist China to considerable economic
and strengthened so as to effect a total
strain. We do not believe that, in the
embargo on non-Communist trade with
short run, there would be any significant
Communist China, the Soviet Bloc would
reduction in Chinese Communist military
probably assume the costs of meeting
capabilities or in the stability of the
Communist China's most important non-
regime. A blockade would, however, seri-
military requirements without curtailing
ously interfere with the execution of Chi-
the delivery of military items so long as
nese Communist long-term plans for eco-
Western ships remained available for
nomic development and would make it
charter and transfer to meet Soviet Bloc
more costly for the USSR to underwrite
shipping needs elsewhere.
an expansion of present Chinese Com-
3. Imposition of a naval blockade in con-
munist military capabilities or new mili-
junction with a total embargo would com-
tary ventures.
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1
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2
5. In conjunction with an embargo and a
chant ships into Port Arthur and Dairen,
naval blockade, effective and sustained
by attempting to force the blockade at
aerial interdiction of key elements in the
other points, or by waging mine and sub-
Chinese Communist rail and waterways
marine warfare against the blockading
system could have an extremely serious
forces. Blockading forces might also be
effect on Chinese Communist military
subject to attack by the Chinese Commu-
capabilities, and the problems of main-
nist Air Force.¹ However, the Kremlin
taining the regime's political and eco-
nomic controls would be greatly aggra-
would make its decision with regard to
vated. Achievement of these significant
the blockade in the light of the global
results, however, would require a large-
policy of the USSR, and probably would
scale and sustained air bombardment
not make a determined effort to break
campaign.
the blockade unless the USSR was pre-
pared to accept a major extension of hos-
6. Imposition of a total embargo on non-
Communist trade with China would prob-
tilities with greatly increased likelihood
ably have no significant effects on Chi-
of general war.
nese Communist or Soviet military
9. The Chinese Communists could be ex-
courses of action.
pected to react to air attacks on their
7. Since a naval blockade would aggra-
lines of communications by making a
vate the logistical problems of Communist
maximum air defensive effort which
forces in the Far East, overland military
might include air attacks against US/UN
ventures would be somewhat more diffi-
bases and aircraft carriers. Soviet air
cult to undertake and overseas ventures
units would probably participate in the
much more difficult. On the other hand,
air defense effort ostensibly as a part of
imposition of a blockade would cause the
the Communist Air Force in China. In
Communists to reappraise Western inten-
this event, there would be an extension
tions and might possibly impel them to
of the de facto air war between the US
accept new risks in Korea, Indochina, or
and the USSR which we have grave rea-
elsewhere.
son to believe already exists in Korea.
8. The USSR might react to a naval
blockade by attempting to escort mer-
¹See footnote to paragraph 41, page 9 below.
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3
DISCUSSION
EXTENT OF PRESENT CONTROLS ON TRADE
rest of the Soviet Bloc. These restrictions,
WITH COMMUNIST CHINA
however, have not prevented the circumven-
tion of controls and the transfer of at least
10. Most of the nations outside the Soviet
27 vessels to Soviet Bloc flags since October
Bloc apply some form of export controls
1950. Chartering controls and controls on
against Communist China. The US has main-
ship construction, repairs, and bunkering are
tained a total trade and shipping embargo
practically non-existent. Although thegreater
against Communist China ever since Decem-
percentage of chartered vessels do not touch
ber 1950, while Canada and Japan have im-
a Communist Chinese port, many of these
posed restrictions almost as complete. The
vessels are employed in Western European,
UK has blocked or restricted the shipment of
South Atlantic, and Indian Ocean trade, there-
a wide variety of strategic items, and, since
by releasing Communist flag vessels for direct
July 1950, most of the Western European
service to Communist China. The US alone
countries, as members of the Coordinating
prohibits vessels of its own registry from en-
Committee (COCOM)2 on East-West trade,
tering the Communist Chinese supply line.
have applied to Communist China the selec-
Such controls, however, do not affect vessels
tive controls put into effect against the rest
of foreign registry which are owned and oper-
of the Soviet Bloc at the beginning of that
ated by persons residing within the US.
year. A great number of other nations have
taken action to restrict shipments to Commu-
THE EFFECT OF PRESENT CONTROLS
nist China in accordance with the UN Addi-
ON COMMUNIST CHINA
tional Measures Resolution of May 1951.
Effect on Foreign Trade
11. There has been a wide variation, however,
in the contraband lists and enforcement
13. Imports from non-Soviet Bloc Countries.
measures being used by individual countries.
The value of the goods imported from non-
Although the controls imposed by the UK and
Communist countries by Communist China
the continental COCOM countries are fairly
rose above the 1950 level in the first half of
comprehensive, they fall far short of the total
1951, but dropped sharply below 1950 levels
embargo imposed by the US. Other nations
in the second half of 1951. (As against the
have shown little uniformity in their inter-
estimated 1950 figure of US $414 million,
pretation of the UN resolution, which covers
these imports were estimated at US $382 mil-
transport supplies and equipment of strate-
lion during the first half of 1951 and at US
gic value and items useful in war production
$148 million in the second half for a 1951
as well as petroleum and purely military
total of US $530 million.) In categories of
items. A number of Middle Eastern and
goods which most countries control, such
Southeast Asian countries have made no more
as strategic materials, the decline in imports
than a general commitment to deny strategic
was far greater than in other categories.³
materials to Communist China, while India,
Fragmentary information for the first four
Pakistan, Burma, and Ceylon have taken no
months of 1952 indicates that Communist
action under the UN resolution.
China's imports from the West have con-
tinued to decline: current imports are prob-
12. Shipping controls have been particularly
ably less than half the rate estimated for the
weak. All the COCOM countries prohibit sales
last six months of 1951.
of ships to Communist China and have agreed
to impose restrictions on sales of ships to the
14. Trade controls have probably deprived
Communist China of a high percentage of cer-
2 Participants in the COCOM include Belgium,
tain items which it might have otherwise
Denmark, France, West Germany, Italy, Luxem-
obtained from non-Communist sources. Such
bourg, the Netherlands, Norway, and Portugal as
well as the US, the UK, and Canada.
3 See Annex A, Tables I and II.
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4
controlled items as Communist China has suc-
Bloc as a consequence of the necessary diver-
ceeded in obtaining from non-Communist
sion of resources to Communist China.
sources have been purchased at higher prices,
owing to the risks attendant on smuggling or
Economic Effects
to the greater cost of indirect importation
17. Industrial Effects. The restriction of im-
methods. Even for those items which only a
ports into Communist China as a result of
few countries have subjected to export con-
present controls has not curtailed its indus-
trol, Communist China has been confronted
trial output. In fact, because the Soviet Bloc
with substantially increased prices as a con-
has compensated for the most critical com-
sequence of a tighter supply situation. For
modities included in the embargo and because
example, the forced shift from the US to
of more effective use of available equipment
Pakistan as the major supplier of raw cotton
and stocks in China, industrial output has
has been very expensive to the Chinese Com-
continued to expand. However, shortages of
munists. Finally, the loss of markets in non-
lubricants, industrial chemicals, and capital
Communist countries, especially the US and
goods for maintenance have almost certainly
Japan, has reduced Communist China's for-
hampered the Chinese in achieving produc-
eign exchange earnings from exports and
tion goals and expanding capacity.
thereby its total import capabilities.
18. Effect on the Railroads. The railroad
15. Imports from Soviet Bloc Countries. On
transportation system of Communist China,
the basis of fragmentary and unconfirmed
while not expanding to the extent it would
data, it is estimated that exports to Commu-
have without present Western controls, has
nist China from the Soviet Bloc in 1951 were
steadily improved in capacity and perfor-
of the general order of magnitude of US $1
mance. Chinese railroads are now in better
billion. This compares with a corresponding
over-all condition than at any previous time
estimate for 1950 of slightly over US $100
since 1945. Control measures have stopped
million. The composition of the 1951 imports
imports of locomotives, freight cars, rolling
can be only very roughly estimated, but it
stock parts, and rails from the West. Because
appears that a major part of these imports
of Communist China's low capacity for the
consisted of military equipment and supplies,
manufacture of freight cars, these controls,
petroleum products, machinery, vehicles, and
together with losses in Korea, have substan-
metal manufactures. Military equipment and
tially retarded expansion of the freight-car
supplies almost certainly accounted for most
park, but this deficiency has been more than
of the increase in 1951 imports over 1950.
offset by increased efficiency in use of present
16. The adverse effects on Communist China
facilities and equipment. Present Western
of the curtailment of imports from the West,
controls on rails have apparently delayed com-
particularly with respect to China's essential
pletion of some new lines already under con-
requirements for petroleum and transport
struction and may have prevented work being
equipment, as well as some other critical ma-
undertaken on other new lines. Although in
terials, have apparently been increasingly off-
the long run, the adverse effect of present con-
set by imports from the Soviet Bloc. However,
trols will almost certainly increase, minimum
the Soviet Bloc has been unable or unwilling
replacement requirements for rolling stock
to compensate in full for the reduction in im-
and rails are likely to be met with Soviet
assistance.
ports from the West of raw cotton, lubricants,
and other items of lesser importance such as
19. Effect on Other Internal Transportation.
paper and gunny bags. It is not known to
Because of the relative insignificance of non-
what extent the Soviet Bloc has met Commu-
military motor transport in China, the de-
nist China's requirements for heavy machin-
terioration in the civilian motor vehicle park
ery and other capital goods embargoed by the
resulting from present controls has had no
West. It is evident that Western trade con-
serious effect on the economy. (The large im-
trols have imposed some burden on the Soviet
ports of Soviet motor vehicles have gone al-
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5
most exclusively into military uses.) While
hindered the Chinese Communists in their
Western trade controls have to some extent
efforts to put back into service and maintain
restricted Chinese Communist capabilities for
their naval vessels. As far as is known, the
ship construction and repairs, such measures
USSR has supplied at most only a few small
do not appear to have hampered Communist
warships to the Chinese Communists, forcing
China's own coastal or inland water trans-
them to rely almost entirely on those ships
portation capabilities. Moreover, gaps in
taken over from the Nationalists.
Western shipping controls have permitted
Communist China to add significantly to its
Internal Political Effects
coastal and inland water transport by charter
24. Economic strains in Communist China,
or indirect purchase of Western vessels.
to which trade controls have probably con-
20. Other Economic Effects. Western trade
tributed to only a minor degree, have created
controls have contributed somewhat to the
no new problems but have intensified existing
Chinese Communist regime's financial diffi-
problems. The government has been forced
culties by adding to the strong inflationary
to take strong anti-inflationary measures, en-
pressures caused by the Korean war. The
tailing some loss in popular support and some
non-industrialized segments of Communist
increase in its administrative burden. Never-
China's economy have few requirements for
theless, the regime has continued to consoli-
imported materials and have, therefore, been
date its political position.
little affected by the embargo.
PROBABLE EFFECT OF A TOTAL EMBARGO
ON NON-COMMUNIST TRADE
Military Effects
WITH COMMUNIST CHINA
21. Ground Forces. The Chinese Communist
Ground Forces have not been adversely
Introductory Note
affected by Western controls. Communist
25. The imposition of a total embargo by the
China produced the bulk of its own require-
entire non-Communist world would presum-
ments for light ground force equipment and
ably extend to both trade and shipping. The
supplies. The materials required for China's
implementation of such an embargo would
munitions industry are relatively small in
presumably include measures to prevent the
tonnage and are for the most part produced
transfer or charter of non-Communist ship-
domestically. The only important import re-
ping to Communist China or the transship-
quirements are for copper and zinc, which are
ment of non-Communist goods directly or
supplied in adequate quantities for the most
indirectly to Communist China from other
essential uses by the USSR. In addition, the
countries in the Soviet Bloc.⁴ By definition,
USSR is providing most of the heavy military
such an embargo would cut off Communist
equipment, virtually all POL, and some light
China's trade (except smuggling) with all
equipment and supplies.
countries outside the Soviet Bloc. It would
22. Air Force. Since the USSR provides Com-
It should be noted in this connection that
munist China with virtually all aviation
present trade controls with Communist countries
equipment and supplies including avgas, pres-
other than China are considerably less rigid than
ent Western controls on strategic materials
those applying to China. To the extent that the
have not affected the capabilities of the Chi-
measures taken to enforce a total embargo were
nese Communist Air Force. The Air Force has
ineffective in preventing either the direct or in-
direct transfer of non-Communist shipping of
continued to expand in aircraft strength and
goods to Communist China from other Commu-
capabilities throughout the period of present
nist countries, the effects of this embargo would
Western controls.
be negated. (For example, by chartering or
clandestine purchase of non-Communist ship-
23. Navy. Since a large part of the Chinese
ping the other Communist countries could ob-
Communist Navy is composed of former for-
tain enough chartered shipping to fulfill their
eign naval vessels, present Western controls
requirements in the other areas and permit as
on strategic materials have almost certainly
many Communist flag vessels as necessary to
enter the China trade.)
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6
represent the strongest form of economic
a. Under present controls, Communist Chi-
pressure that could be brought to bear against
na's legitimate imports from the non-Commu-
Communist China short of a general East-
nist world during 1952 would be of the order
West trade and shipping embargo.
of 450,000 metric tons, with a total value of
26. The means by which such an embargo
some US $270 million. This, then, represents
would be implemented is beyond the scope of
the theoretical annual loss of imports result-
this paper. Whether or not such an embargo
ing from a total embargo.
would be politically feasible or even desirable
b. It is unlikely that the present rate of
in the light of its economic repercussions on
smuggling could be increased significantly
the non-Communist world is also beyond the
inasmuch as a complete embargo would nec-
scope of this estimate.
essarily involve a general strengthening of
controls. Clandestine imports would tend in-
Short-Run Effects
creasingly to consist of items of small bulk
27. Effect on Imports. The direct impact on
and high value, such as drugs, motor vehicle
imports of a total embargo would depend on
parts, and chemicals, but the total volume
the volume and importance of the materials
may be assumed to be about 50,000 tons, the
Communist China would otherwise obtain
level projected for 1952 under the assumption
from the non-Communist countries, and on
of present controls.
the extent to which the Chinese Communists
29. The degree to which the Soviet Bloc will
would be capable of making up this loss
compensate for the loss of imports from the
through smuggling and through compensat-
West will depend in general on the Soviet ap-
ing shipments from the Soviet Bloc. This last
praisal of the relative advantages of using re-
factor in turn would depend on the extent to
sources in Communist China as opposed to
which the Soviet Bloc was able and willing to:
the resources elsewhere in the Soviet Orbit,
(a) make up for the loss of Western shipping
including the USSR itself. Transport facilities
(including that now chartered by the Com-
and the supply of commodities within the Bloc
munists) now serving the China trade; (b)
are not likely to impose an absolute limit on
supply the specific commodities denied by the
Soviet exports to China. However, in the case
West; and (c) advance goods to Communist
of commodities considered by the Soviet Union
China in excess of the latter's immediate abil-
to be less essential to Communist China, the
ity to pay in goods or foreign exchange.
volume of Soviet exports may be limited by the
28. The lack of reliable data on Communist
amount of grants or credits the Soviet Union
China's foreign trade and on the Soviet Bloc's
is willing to extend to Communist China.⁶
economic capabilities makes it impossible to
a. The Soviet Union has a strong interest
estimate with precision the impact of a total
in maintaining Chinese Communist strength
embargo on Communist China. The following
and for this reason would probably assign a
projection is based on the estimated level of
high priority to those Chinese Communist
trade during the last half of 1951.⁵
import requirements that have a significant
effect, directly or indirectly, on Chinese Com-
The last half of 1951 was used as the basis for
munist military capabilities. Much lower
projecting Communist China's imports from the
West in 1952, assuming a continuation of present
controls, because it is the most representative
See Annex B for a discussion of the Soviet Bloc's
period for which complete data are available.
ability and willingness to replace various types of
Annex A, Table III, shows this projection. How-
imports which Communist China would lose as
ever, fragmentary data indicate that the rate of
the result of a total embargo.
Communist China's imports from the West during
the first four months of 1952 was probably less
too high. On this basis the adjustments that
than half the rate estimated for the last six
the Soviet Bloc would have to make as a result
months of 1951. To the extent that this trend
of the imposition by the West of a total embargo
continues, this projection of Communist China's
on its trade with Communist China would be less
imports from the West under present controls is
than is indicated in this paper.
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7
priorities would be assigned to supplying the
thus be about 2,500,000 metric tons. The net
remaining commodities Communist China
reduction of imports estimated in paragraph
formerly imported from the West. It is prob-
29-a above — about 100,000 metric tons —
able, therefore, that such commodities would
would thus represent about 13 percent of es-
be supplied only to the degree that the burden
timated non-military imports during 1952 and
thus imposed on the rest of the Soviet Orbit
only about 4 percent of over-all imports. Even
would be relatively small. On this basis, it
allowing for a considerable margin of error
is estimated roughly that the Soviet Bloc
in the estimate of 1952 Soviet Bloc imports
would make up for the loss of virtually all
under present controls, it is evident that im-
the iron and steel and much of the machinery
position of a complete embargo would not
and metal products, industrial chemicals,
effect a major reduction in the present total
ammonium sulfate fertilizer, dyes, drugs, and
volume of imports.
paper which otherwise would have come from
non-Soviet countries. However, because of
31. A total embargo on non-Communist trade
shortages within the Bloc and because the
with Communist China would not affect the
commodities concerned would be considered
flow of purely military items and petroleum,
less essential to Communist China, the Soviet
all of which (except for limited quantities
Union probably would not compensate for
brought in by smuggling) now come from the
more than a small portion of the raw cotton
Soviet Bloc. Military considerations would al-
and cotton cloth, rubber, gunny bags, and
most certainly determine the relative priority
sugar which Communist China otherwise
of compensating shipments from the Soviet
would have obtained from the West. In over-
Bloc and, consequently, goods related to mili-
all magnitude, the Soviet Bloc could probably
tary operations would probably be least
increase its annual rate of exports to Commu-
affected by a complete embargo.
nist China by about $200 million in value and
32. Economic Effects. The most important
about 350,000 metric tons in volume, reducing
effect of the estimated loss of imports upon
the net import loss to about 100,000 metric
the current industrial output of Communist
tons.
China would probably be concentrated in the
b. Movement from Eastern Europe of these
textile industry. Curtailment of raw cotton
additional shipments from the Soviet Bloc
imports could be expected to reduce textile
- which would equal the capacity of 15 to
mill output by roughly 10 percent. The loss
20 Liberty-type ships on the basis of three
of other imports, such as natural rubber and
round trips a year — is believed well within
various types of machinery and raw materials,
the capabilities of the Soviet and Polish mer-
would also reduce output of some other con-
chant fleets, so long as Western ships remain
sumers' goods. This limited reduction in con-
available for charter to meet Soviet Bloc ship-
sumer goods output might increase inflation-
ping requirements elsewhere. Moreover, some
ary pressures. In other lines, production
additional shipments could be made overland
would probably continue at approximately
if the Soviet Bloc were willing to bear the costs
present levels, although the dislocations re-
involved. (See paragraph 43 below.)
sulting from the embargo might prevent, in
30. The effect on total volume of Chinese
some fields, the attainment of projected out-
Communist imports from all sources would
put expansion. The loss of ammonium sul-
also be relatively small. On the basis of the
fate fertilizer would not have serious effects
meager data now available, it appears prob-
in view of the availability of domestic organic
able that, given continuation of present con-
fertilizers, which are in far more general use.
trols, Soviet Bloc shipments to Communist
Finally, with imports and production of some
China during 1952 would be of the order of
consumer goods reduced and non-Communist
2,000,000 metric tons - possibly 85 percent of
markets virtually eliminated, the government
it military in character — and that Commu-
would be confronted with a sizable loss of
nist China's total imports for the period would
revenue.
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8
33. Military Effects. A total embargo by non-
plete embargo on non-Communist trade with
Soviet Bloc countries would probably have no
Communist China on output in Communist
significant short-run effect on the capabilities
China would probably decrease rather than
of the Chinese armed forces.
increase with the passage of time. The loss
34. Internal Political Effects. A total embar-
of cotton and other raw materials, for exam-
go by the non-Soviet Bloc would increase the
ple, could and probably would be made up in
Chinese Communist regime's difficulties, but
large part through the development of do-
it is unlikely that this additional strain would
mestic-production or of domestically produced
seriously impair Communist control.
substitutes. Industrial output could probably
equal or exceed present levels, although the
35. Burden on the Rest of the Soviet Bloc.
strains on existing plant and the competing
A total embargo would increase the economic
demands of the military might result in some
burden that Communist China imposes on the
failure to replace worn-out equipment, with
rest of the Soviet Bloc. This burden cannot
a consequent decline in output, unless such
be precisely estimated, but the following fac-
worn-out equipment (particularly that of
tors may be noted:
US, British, or Japanese origin) were replaced
a. Available trade data, based largely on
from the Soviet Bloc. Despite capital goods
Chinese Communist sources, suggest that in
shortages in the Soviet Bloc, the Bloc would
1951 Communist China had an import surplus
probably accept the costs of meeting Com-
of approximately $500 million with the rest
munist China's major capital replacement
of the Bloc, which is presumed to have been
needs. However, the embargo would almost
financed for the most part by Soviet grants
certainly interfere with Chinese Communist
or credits. Under a total embargo against
plans for reconstruction and economic de-
Communist China, the level of Soviet grants
velopment.
or credits would tend to increase, since the
37. Continued denial of Western sources of
estimated rise in Soviet exports to Communist
China could not be fully compensated for by
supply would pose a severe problem for the
an increase in imports from Communist
Chinese Communist railway system, which
China.
would almost certainly decline in capacity
and efficiency unless steps were taken to off-
b. The rest of the Soviet Bloc would, to a
set the progessive deterioration of equipment.
greater extent than before, be exporting to
This would place some burden on the Soviet
Communist China many commodities that it
Bloc, whether it sought to supply the nec-
normally imports for its own use, and would
esssary rails, locomotives, and freight cars
be receiving from Communist China commod-
itself, or attempted to restore Manchurian
ities that are less essential to its needs.
capacity for rolling steel rails and to expand
c. The increase in traffic over the Trans-
the production of freight cars and locomotives
Siberian railroad since the beginning of the
in China. However, it is probable that the
Korean war has required a noticeable diver-
USSR would be able to supply minimum Chi-
sion of rolling stock from other railroads in
nese Communist requirements without ser-
the Soviet Union. However, so long as the
ious repercussions in other portions of the
Bloc had access to sufficient shipping capac-
Soviet Bloc economy.
ity to carry the estimated increase in exports
to Communist China, a total embargo would
38. Military Effects. Over a longer period, a
presumably impose no further strain on the
total embargo would not reduce present Chi-
Soviet rail system.
nese Communist military capabilities but it
might hinder an expansion of those capabil-
Long-Run Effects
ties.
36. Economic Effects. Assuming that im-
39. Internal Political Effects. Over a longer
ports from the Soviet Bloc are maintained at
period, the embargo would probably not sig-
least at the level projected in paragraph 20
nificantly reduce the effectiveness of the re-
above, the adverse economic effects of a com-
gime's control over the Chinese people.
TOP SECRET
ToΓ SECRET
9
40. Effect on Sino-Soviet Relations. A total
42. A naval blockade would also presumably
embargo would tend to increase the possibili-
operate against Communist China's coastal
ties of Sino-Soviet friction. Should the Soviet
trade. Although a blockade would not be
Union be unwilling to continue to accept in-
very effective against local inshore coastal
definitely the increased burden required to
shipping, it would virtually eliminate Com-
support Communist China under a total em-
munist China's substantial ocean-going coast-
bargo, the adverse effect of the embargo on
al traffic. The most important component of
Communist China would be increased. Even
this trade is that between Shanghai and the
under the projected level of Soviet exports
northern ports of Chinwangtao (from which
to Communist China, the Chinese Commu-
Shanghai gets coal) and Dairen (from which
nists might feel that their needs should be
it obtains industrial raw materials in return
given higher priority.
for manufactured goods). The shipping now
engaged between Shanghai and these ports
PROBABLE EFFECTIVENESS OF A NAVAL
has an annual capacity of more than one
BLOCKADE IN INCREASING THE
million metric tons each way.
PRESSURE ON COMMUNIST CHINA
43. Against the loss of seaborne imports pro-
jected above (totalling somewhat less than
Including Port Arthur and Dairen
900,000 metric tons) must be balanced the
41. Effect on Chinese Communist Trade.
likely increases in imports from the Soviet
Whereas an embargo would operate only
Bloc by overland routes. Overland shipments
against non-Communist trade and ship-
from the USSR to Communist China in 1952
ping, a naval blockade would interdict smug-
under present controls are projected at 1,600,-
gling and Soviet Bloc seaborne shipments as
000 metric tons, or the level tentatively esti-
well, thus restricting Communist China's im-
mated to have been shipped in 1951. This
ports almost entirely to those which could be
level of traffic represents considerably less
brought in overland from the USSR.⁷ On the
than the theoretical maximum capacity of the
overland routes which could be used to supply
basis of our tentative projection of Chinese
Communist China and North Korea; it is
Communist imports under present controls,
probable that, if the need were great enough,
the resultant direct loss in imports as a result
these overland routes could carry, in addition
of a naval blockade would amount to 450,000
to their present traffic, all of the cargo that
metric tons in legitimate imports from non-
would otherwise have come in by sea - mak-
Communist countries plus up to 400,000 met-
ing a total of some 2,500,000 tons on the basis
ric tons in shipments which would otherwise
of our present projection.⁸ In this event, how-
have come in by sea from Soviet Bloc sources
or through smuggling.
During World War II the Trans-Siberian Railway
carried Lend-Lease materials westward at a rate
It is estimated that a naval blockade of the
of six million tons a year over certain periods.
China coast, including the Soviet-controlled
This level would probably represent a close ap-
Manchurian ports of Dairen and Port Arthur,
proximation of the theoretical maximum east-
would cut off 75-90 percent of the tonnage which
bound capacity, although its attainment would
would otherwise have come in through smuggling
necessitate a very considerable sacrifice in
and Soviet Bloc seaborne shipment. It is be-
diverting scarce rolling stock from other rail lines
lieved that such a blockade could be set up so
in the USSR. In the recent US-UK study, EIC-
as to avoid effective Chinese Communist air and
R1, Status and Effectiveness of Trade Controls
naval counteraction. If Soviet or other Commu-
against Communist China, considerably lower
nist shipping attempted to run the blockade un-
estimates were made of the amounts which the
der Soviet naval escort — a possibility discussed
Trans-Siberian could deliver to the Manchurian
in Section VI- achievement of the interdiction
border, the US specialists presenting a figure of
effect estimated here would obviously depend on
3.3 million tons a year and the British a figure
the willingness of the US and other blockading
of 1.7 million tons. Both these estimates, how-
powers to risk an open clash with the Soviet
ever, assumed prior fulfillment of the needs of
escort vessels.
(Footnote continued on page 10)
TOP SECRET
TOP SECRET
10
ever, the cost to the Soviet Bloc of supplying
elimination of a large part of coastal shipping
these commodities would be substantially in-
and the fact that all imports would have to
creased. Additional rolling stock would have
enter via Manchurian entry points would in-
to be diverted from other railroads in the
crease the already serious strain on the rail-
Soviet Union and a reduction might have to
roads, curtailing internal trade and limiting
be made in the volume of commodities mov-
total production. Over the long run, indus-
ing to the Soviet Far East. Moreover, it is
trial production would probably decline.
also probable that the increased strain which
While this over-all reduction in production
a blockade would impose on Communist
would probably not be large, it would add
China's internal transport facilities would
significantly, in the context of existing eco-
make it difficult if not impossible for the Chi-
nomic strains, to the inflationary pressures
nese Communists to distribute from Man-
confronting Communist China and would
churia some of the imported commodities re-
seriously interfere with execution of Chinese
quired in China proper. For these reasons,
Communist plans for economic development.
it is estimated that Soviet exports to Com-
These pressures would necessitate increasingly
munist China under a blockade would be sub-
vigorous economic and political controls.
stantially less than under a total embargo but
45. Political Effects. Internal controls, al-
that they almost certainly would at least cover
ready strong in Communist China, could pre-
Communist China's essential military import
vent any serious increase in overt political
requirements.
opposition to the regime. However, the ad-
44. Economic Effects. Any substantial reduc-
ministrative burden of these controls would
tion in over-all Chinese Communist imports
increase, and the failure of the regime to
would probably entail a drastic reduction in
make progress in its economic program would
commercial imports from the level projected
foster disillusionment with the Chinese Com-
for 1952 under present controls. This reduc-
munist leadership.
tion in commercial imports would probably
46. Military Effects. A naval blockade would
result in industrial output being held at or
below 1951 levels instead of attaining the
not directly affect the movement of military
supplies from the USSR, most of which are
presently projected expansion. Increasing
maintenance and repair difficulties would be
being brought in by overland routes. Never-
theless, the denial of seaborne imports and of
experienced as a result of the denial of re-
placement capital goods. The necessary sub-
coastal shipping facilities would probably im-
stitution of domestic materials for such items
pose some curbs on the importation and in-
as imported paper, chemicals, gunny bags,
ternal distribution of military supplies be-
and metals would tend to lower the quality
cause of congestion of land routes. Mean-
and increase the costs of production. The
while, the impact of a naval blockade on the
economy as a whole would reduce the totality
(Footnote continued from page 9)
of domestic resources which could be mobi-
the Soviet Far East and thus involved judgments
lized in support of the war effort. The reduc-
as to the relative priorities of USSR and Chinese
tion in Chinese Communist military capabili-
requirements; they would presumably have to be
ties would not be great enough to force a
revised upwards if new conditions such as the
reduction of the Chinese Communist military
blockade increased Chinese requirements for
shipments over the Trans-Siberian Railway. It
commitment in Korea at least for some time.
may be noted that the strain on the Trans-
It would, however, make more difficult offen-
Siberian Railway could be reduced by an increase
sive operations requiring large expenditures
in seaborne shipments to Vladivostok. The US
of materiel, either in Korea or elsewhere.
and the UK intelligence authorities estimated
respectively that the capacity of the Manchurian
47. Effect on Sino-Soviet Relations. A naval
rail system to accept imports at Manchouli and
blockade would tend to increase the possibili-
Suifenho was 2.4 million tons and 2.0 million tons
annually. Additional shipments could be made
ties of Sino-Soviet friction to a greater extent
by river, by road, and possibly by a reported rail
than would an embargo. Although Soviet
connection between Vladivostok and Tu-Men.
exports to Communist China would be re-
TOP SECRET
TOP SECRET
11
duced under a blockade as compared with an
communications with the outside world as
embargo, the cost of providing these com-
perforce to remain largely self-sufficient. In
modities, because of transport difficulties,
general, however, the maintenance of the
would be greater and the possibility of obtain-
present level of Chinese Communist military
ing increased imports from Communist China
and economic activities depends on continued
would be less.
availability of a heavily utilized rail and water
network which contains a number of bottle-
Excluding Port Arthur and Dairen
necks and lacks a supplementary road system
capable of carrying heavy traffic on an all-
48. A naval blockade would almost certainly
weather basis. These bottlenecks, all within
be ineffective if Dairen and Port Arthur were
bombing range of US land and carrier-based
excluded. These ports together are believed
aircraft, provide some 200 rail targets for
capable of handling about 45,000 tons a day,
bombing and some 26 water targets for aerial
or many times the estimated total daily sea-
mining.
borne imports of all of Communist China at
present. The readjustment of internal distri-
50. These potential targets can be divided into
bution necessitated by the blockade of all
five general categories, as follows: 9
other seaports would impose additional strains
a. Rail and water links with the Trans-
on the Chinese Communist railway system but
Siberian Railway. At present there are only
these strains would probably not be critical.
three routes by which heavy overland ship-
With regard to rail and road capacity out of
ments from the USSR can be brought into
Dairen and Port Arthur, the Port Arthur-
China: (1) the rail line from Man-chou-li on
Mukden railway has a present estimated
the western border; (2) the rail line from Sui-
capacity of about 15,000 tons a day each way,
fen-ho on the east to the rail net around
while highways from Dairen to Harbin and
Harbin in central Manchuria; and (3) the
Antung have estimated capacities of 4,800
Sungari River, which links Harbin with a
tons each way. Although these combined rail
Trans-Siberian railway spur on Manchuria's
and road capacities are far below the rated
northern border. An additional rail line is
capacities of the ports themselves, they are
reported to be in operation from the Trans-
still far more than sufficient to handle Com-
Siberian Railway near Vladivostok into North
munist China's present total seaborne im-
Korea, where it joins the Korean rail net,
ports.
which in turn has a connection at Tu-Men
with the Manchurian rail system. In the
PROBABLE EFFECTS OF BOMBARDMENT
event of a naval blockade of the China coast,
OF LINES OF COMMUNICATIONS
these already important routes would obvi-
IN CONJUNCTION WITH THE BLOCKADE
ously be of critical significance. No alternate
rail routing is possible over the first 400 miles
Vulnerable Elements of the Chinese
from Man-chou-li to Harbin, while the first
Communcations System
junction point on the Sui-fen-ho - Harbin line
49. Communist China is heavily dependent on
is 50 miles from the border.
certain critical rail and inland waterways
b. The rail link between Dairen and Port
facilities for the execution of military move-
Arthur and central Manchuria. The rail line
ments and the maintenance of the indus-
linking Port Arthur and Dairen with Mukden
trialized and cash crop sector of its economy.
and Harbin would be of critical importance
This dependence is less within Manchuria,
in the event that a naval blockade was estab-
where the existence of a well-integrated and
lished excluding these ports. Although a sup-
fairly diversified rail net and of a number of
plementary road system is available, this road
good highways provides some flexibility in
system accounts for less than a quarter of
transportation arrangements, and at the
the haulage capacity out of these two ports,
other extreme, in vast areas of rural China,
notably in the west, which have such poor
" See attached map.
TOP SECRET
114
120
126
132
138
54
RAILROADS IN CHINA
H
E
September 1951
U.
S.S.R.
<
U
S.S.R.
cars
Operable
Inoperable
w
Under construction
Service
-
or reconstruction
A
N
-
48
H
S
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Legin
.
Major redair show
No.
International boundary
I
Minor repair shop
International boundary
in dispute or indefinite
48
Check materials
Major intend waterway
Province boundary
HOKIANO
-
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BASE CHINA 1.6.310,000 CIA No. 11098 September 1949
N
-
SCALE 1:10,000,000
Har
5
©
100
200
100
402
500
600
MILES
50
100
200
100
400
100
600
MILOMETERS
LIAOP
-
SECRET
96
102
108
3
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SINKLANG
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ONGOLIA
CHAHAR
42
42
II
Dowland
]
H
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CRITICAL LINKS IN THE
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CHINESE COMMUNIST
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B)U M
Ding Card
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I Connections with Trans-Siberian Railway
II Port Arthur-Harbin line
L
O
C.
III Manchuria-North China link
S
IV Te-hslen-Tsinan link (includes Yellow
River bridge north of Tsinan)
VIETN
V Chu-chou-Hang-yang link
HAINAN
VI Yellow River bridge near Cheng-hsien
18
18
Pala
NA
VII Railroad ferry at Pu-chen-Nanking
Saniya
VIII Yangtze River crossing at Wuch'ang
THAILAND
108
114
120
126
102
12335 CIA, 5.52
SECRET
SECUDITY INFORMATION
TOP SECRET
12
all of which would be required to compensate
Potentialities and Difficulties of a
for the blockade of other Chinese seaports.
No alternate rail routes are available for the
Bombing Campaign
first 150 miles from the terminus at Port
51. In the event of a sea blockade of the China
Arthur.
coast including Port Arthur and Dairen, effec-
c. The rail link between Manchuria and
tive interdiction of even part of this target
North China. All rail traffic between Man-
system would have an extremely serious effect
churia and the rest of China must travel over
on Communist China's military and economic
a 275-mile stretch of coastal trackage between
potential. It is probable that a prolonged dis-
Chin-chou and Tientsin. Effective interdic-
ruption of the main routes of entry from the
tion of this route would sever the only heavy-
USSR into Manchuria would critically reduce
duty transportation link between Manchuria
Chinese Communist offensive capabilities in
and the rest of China.
Korea and seriously reduce their defensive
capabilities in Korea, even though some sup-
d. The Chu-chou-Heng-yang rail link in
plies could be sent from the USSR directly
South China. All rail traffic into south China
into North Korea. Interdiction of the key
from the rest of the country must pass over
Chu-chou-Heng-yang rail link into south
a 75-mile stretch of railroad between Chu-
China would gravely handicap military oper-
chou and Heng-yang. Effective interdiction
ations in Southeast Asia. Effective, sustained
of this stretch would not only sever the major
attacks on the vital rail link between Man-
inland transport route between Canton and
churia and China proper, coupled with at-
central and northern China but would also
tacks on selected targets within central China
cut the only rail line which would permit the
would put severe pressures on the Chinese
movement of supplies from north and central
economy. Taken together, effective and sus-
China in support of the Viet Minh forces in
tained interdiction of all these routes would
Indochina.
progressively undermine Communist China to
e. Rail and water targets in central China.
a point where its military capabilities would
be critically reduced and the difficulties of
There are a number of important rail and
water transport targets in central China. A
maintaining the regime's economic and politi-
cal controls would be aggravated.
70-mile stretch of trackage between Ta-Hsien
and Chinan, including an important raii
52. Actual achievement of such results, how-
bridge over the Yellow River, is used by east-
ever, would involve serious difficulties. Com-
west traffic as well as by the main coastal
munist China already possesses a substantial
railway. Other rail targets include the Yel-
air defense potential, particularly against
low River bridge north of Cheng-hsien on the
the type of operations which would be re-
Peiping-Hankow-Kowloon route, the Pu-chen-
quired for a program of the scope and nature
Nanking railroad ferry on the Peiping-Shang-
discussed above. In addition, the USSR
hai route, and the Yangtze River ferry cross-
could bolster Chinese Communist air defenses
ing at Wu-chang. The most important water-
in a very short time by committing Soviet
way targets are along the Yangtze and Hsi
air units which could operate ostensibly as
(West) Rivers, which together with the Sun-
an integral part of the Chinese Communist
gari River in Manchuria are estimated to
Air Force. Therefore, either prior to or on
carry three-quarters of the 25 to 35 million
the initiation of a large-scale interdiction
tons of cargo carried annually on Chinese
campaign it undoubtedly would be necessary
waterways. Although these targets are not
for the US/UN Air Forces to direct a large-
scale air campaign against Chinese Commu-
individually as important as those noted pre-
nist air defenses. Even if these air defenses
viously, their effective interdiction would
were reduced to relative impotency, it would
place a heavy strain on an already overloaded
be necessary to continue heavy attacks on
transportation system, with serious economic
air bases to prevent reinforcement by the
and possible military results.
USSR.
TOP SECRET
TOP SECRET
13
53. In addition to the necessity for an air
ading forces might also be subject to attack
campaign against the enemy air defenses,
by the Chinese Communist Air Force. How-
a successful interdiction of Communist Chi-
ever, the Kremlin would make its decision
nese lines of communications would require
with regard to the blockade in the light of
a very large-scale and long-sustained bomb-
the global policy of the USSR, and probably
ing effort. On account of the relative rapid-
would not make a determined effort to break
ity with which rail targets can be repaired,
the blockade unless the USSR was prepared
continuing attacks would be needed to effect
to accept a major extension of hostilities
anything more than a temporary delay. The
with greatly increased likelihood of general
effectiveness of the mining of inland water-
war.
ways would be seriously limited by the fact
that most of the traffic is carried in small
56. Imposition of a naval blockade, by re-
shallow draft wooden vessels.
stricting Chinese Communist imports to
those which could be brought in over the al-
PROBABLE COMMUNIST REACTION TO THE
ready heavily burdened overland routes from
IMPLEMENTATION OF THESE MEASURES
the USSR, would undoubtedly place a con-
siderable burden on Communist China but
Complete Embargo
would not necessarily impose any significant
54. Over the short run, a complete embargo
restraints on Chinese Communist military
on non-Communist trade with Communist
operations. A blockade might result in some
China would probably have no significant
interference with military shipments and
effect on Communist China's military capa-
might discourage the Chinese Communists
bilities and only limited effects on its civil-
from undertaking new military operations
ian economy. Such an embargo would there-
with high logistical requirements, while de-
fore probably have little or no influence,
ployment of the blockading force along the
either as a deterrent or a stimulant, on Chi-
Chinese coast would incidentally provide a
nese Communist military policies with re-
further deterrent to a Chinese Communist
spect to Korea, Taiwan, and Southeast Asia.
invasion of Taiwan. On the other hand, im-
The Chinese Communists might, however,
position of a blockade would cause the Com-
retaliate by seizing Hong Kong and Macao,
munists to reappraise Western intentions
since the advantages afforded to the Peiping
and might possibly impel them to accept new
regime by the present status of those ports
risks in Korea, Indochina, or elsewhere.
would be virtually ended by imposition of a
total embargo. They would probably rec-
Air Bombardment of Lines
ognize, however, that such actions would en-
of Communications
tail risks of expanded hostilities and that the
continued existence of these colonies might
57. It would extremely difficult, if not im-
induce influential British and Portuguese
possible, to limit air bombardment of Com-
interests to seek a relaxation of the embargo.
munist China solely to attacks on lines of
communications, since such action would
Naval Blockade
necessarily involve air operations against all
55. A naval blockade of Communist China
elements of the Chinese Communist air
would be a blow to the prestige of the Soviet
defense system. The Chinese Communists
Bloc, particularly if the blockade included
could be expected to react by making a max-
Port Arthur and Dairen, since the USSR has
imum air defensive effort which might in-
special rights in these ports. The USSR
clude air attacks against US/UN bases and
might react to a naval blockade by attempt-
aircraft carriers. (Thus, the existing limited
ing to bring merchant ships into Port Arthur
air operations between the US and the Far
and Dairen under Soviet naval escort, by
Eastern Communist Air Forces, now confined
attempting to force the blockade at other
to Korea, would be considerably expanded
points, or by waging mine and submarine
geographically, increased in size and in in-
warfare against the blockading forces. Block-
tensity, and broadened in concept.) Because
TOP SECRET
TOP SECRET
14
of the USSR's interest in preserving the sta-
of the Communist Air Force in China. In
bility of Communist China and in line with
this event, there would be a considerable ex-
the commitments which the USSR has al-
pansion in the geographical scope, scale, and
most certainly made to the Peiping regime,
intensity of the de facto air war between the
Soviet air units would probably participate
US and the USSR which we have grave rea-
in the air defense effort ostensibly as a part
son to believe already exists in Korea.
TOP SECRET
,
TOP SECRET
15
ANNEX A
SELECTED TABULAR DATA
TABLE 1
Chinese Communist Imports from Non-Communist
Countries, 1951 1
(in millions of US dollars)
COUNTRIES
Europe and Western
Hemisphere
JAN.-JUNE
JULY-DEC.
TOTAL
Canada
.1
.1
US
2.9
2.9
UK
7.4
2.8
10.2
France
2.2
.5
2.7
Belgium-Lux.
9.3
6.2
15.5
Switzerland
5.2
4.0
9.2
West Germany
9.6
.3
9.9
Italy
1.2
.1
1.3
Netherlands
.3
.1
.4
Sweden
.9
.7
1.6
Norway
.5
.3
.8
Adjustment for C.I.F. 4.0
1.5
5.5
(cost, insurance,
and freight)
(10 percent)
Subtotal
43.6
16.5
60.1
COUNTRIES
Near East, Asia,
Oceania
Egypt
3.4
.6
4.0
India
6.3
6.0
12.3
Pakistan
22.8
12.7
35.5
Japan
5.1
.8
5.9
Malaya
40.9
.6
41.5
Australia
1.0
.3
1.3
Ceylon
7.8
7.8
Philippines
.5
.1
.6
Hong Kong
187.8
68.7
256.5
Macao
21.1
14.8
35.9
Adjustment for
14.5
5.6
20.1
C.I.F. (5 percent)
Subtotal
303.4
118.0
421.4
TOTAL
347.0
134.5
481.5
Add 10 percent for all 34.7
13.5
48.2
other including
smuggling
GRAND TOTAL
381.7
148.0
529.7
3.3(b)(1)
TOP SECRET
TOP SECRET
16
TABLE II
TABLE III
SUMMARY OF HONG KONG'S EXPORTS (BY
ESTIMATED CHINESE COMMUNIST IMPORTS
VALUE) TO COMMUNIST CHINA, 1951
FROM THE NON-SOVIET BLOC IN 1952 ASSUMING
(millions of US $
A CONTINUATION OF CURRENT CONTROLS
Commodity Group
Jan.-
July-
Oct.-
Total
Volume
Value
June
Sept.
Dec.
1951
CIF Price
(metric
(US $
Food. feed, bever-
3.1
1.2
0.4
4.7
Item
metric ton
tons)
million)
ages & tobacco
Raw cotton
$1,667
30,000
$50
Chemicals (in-
27.7
10.9
5.9
44.5
Crude rubber
1,200
10,000
12
cluding pharma-
Iron & steel
300
30,000
9
ceuticals)
Machinery, metal
400
35,000
14
Dyeing, tanning
16.2
5.2
1.4
22.7
mfrs.
& coloring sub-
Ammonium sulfate
150
60,000
9
stances
Industrial chemicals
800
20,000
16
Fertilizers
4.1
1.9
2.0
8.0
Dyes
1,500
10,000
15
Rubber & its man-
55.3
55.3
Pharmaceuticals
3,000
6,000
18
ufactures
Paper
200
75,000
15
Pulp & paper
5.0
5.3
3.2
13.5
Sugar
200
75,000
15
Textile raw mate-
2.6
1.1
0.8
4.5
Gunny bags
400
30,000
12
rials, yarns &
Cotton cloth
2,500
12,000
30
threads
Other
102,000
64
Textiles (exclud-
6.8
4.7
7.3
18.8
Total, legitimate
450,000
270
ing clothing)
Footwear
1.9
Smuggled
1.9
50,000
30
Products for heat-
1.0
0.1
1.2
GRAND TOTAL
500,000
300
ing, lighting &
power
thirds in 1951) of such imports, its export statis-
Non-metallic min-
1.7
0.5
0.3
2.5
ties, to a considerable extent, provide an account
erals & their
of them. If a similar table could be constructed
manufactures
for Communist China's imports from all non-
Iron & steel
28.8
0.9
0.1
29.8
Communist countries, the relative importance of
Non-ferrous base
2.1
2.1
the various commodity categories would differ
metals
markedly from Hong Kong's exports in only a
Manufactures of
4.5
1.6
0.5
6.6
few respects: (1) Direct shipments to Chinese
non-ferrous
ports of raw cotton from Pakistan and gunny
base metals
bags from India would increase the annual total
Machinery & appa-
6.3
3.4
1.7
11.4
for textile raw materials by approximately US
ratus other than
$37 million and that for textiles by about US $13
electrical
million; (2) Direct imports of rubber from
Electrical machin-
4.9
0.8
0.3
6.0
Malaya, all during the first half of the year,
ery & apparatus
would add roughly US $43 million to total rubber
Vehicles & trans-
6.6
0.2
6.8
imports; (3) The relative importance of chemi-
port equipment
cals, metals, and metal manufactures would be
Miscellaneous $
9.0
4.3
2.7
16.1
somewhat greater than in Table II, as a conse-
quence of the fact that Western European export
TOTAL
187.8
42.0
26.6
256.5
controls on these categories are generally less
stringent than those of Hong Kong.
3.3(b)(1)
page 17. It is not possible, owing to the incom-
: Currency conversions have been made at average
pleteness and lack of uniformity of the export
market rates of exchange. Minor discrepancies
statistics published by the various countries con-
in addition are due to rounding.
cerned, to compile a detailed table of Communist
China's imports from non-Communist countries
3 Includes some items more properly attributable
by commodities and by countries of origin; but
to one of the specific categories above, but the
as Hong Kong provided a large part (about two-
necessary details are not readily calculable.
TOP SECRET
TOP SECRET
17
ANNEX B
THE SHORT-RUN EFFECTS ON SPECIFIC COM-
imports of rubber. In any event, the Bloc
MODITIES OF A TOTAL EMBARGO OF ALL
cannot be expected to supply much rubber
IMPORTS FROM ALL NON-SOVIET COUNTRIES
to Communist China. Like Communist
NOTE: This annex briefly considers the Bloc's abil-
China, the other Bloc countries must import
ity and willingness to replace the imports
all the crude natural rubber they consume.
which Communist China would lose as the
Moreover, crude natural rubber has a much
result of a total embargo by non-Bloc coun-
higher strategic value in the rest of the Bloc
tries. It is assumed in this discussion that
than in Communist China, where the rubber
such an embargo would be set up SO as to
fabricating industry produces primarily foot-
prevent increased transshipment via the
Bloc of commodities originating in non-
wear and rickshaw tires. Hence, Communist
Communist countries. These estimates are
China's rubber industry would almost certain-
based upon sketchy information, sketchy
ly be sharply curtailed whenever current
both for Communist China and for the rest
domestic stocks were depleted.
of the Bloc. The reliability of the individ-
ual estimates is therefore not high. Never-
theless, the annex probably gives a reason-
Minerals, Metals, Machinery, and
ably accurate general picture of the Bloc's
Other Metal Manufactures
supply position with regard to these com-
modities.
3. Western export controls have already great-
ly reduced the amounts of minerals, metals,
Raw Cotton and Cotton Cloth
machinery, and metal manufactures which
1. Under present controls Communist China's
Communist China can import. Imports from
imports of raw cotton and cotton cloth during
non-Bloc countries under present controls are
1952 are projected at about 30,000 metric tons
projected at $23 million in 1952. Although
(valued at US $50 million) and 12,000 metric
the Bloc could eventually replace most of
tons (US $30 million), respectively. Because
these commodities, there are certain specific
of cotton shortages in the Bloc, the Soviets
items which could not be supplied in the short
would probably be reluctant to supply more
run and others which would involve prohibi-
than a small portion of Communist China's
tive costs. The existing stock of capital goods
import requirements for raw cotton or cotton
is almost entirely of American, British, and
products. The present cotton shortage in
Japanese design. It would be extremely dif-
China would thus be aggravated. However,
ficult to obtain replacement components from
strenuous efforts (even, it is believed, at the
Bloc sources for existing machinery and other
metal manufactures, such as motor-vehicle
expense of food crops) have already been
undertaken to overcome the shortage. These
parts, machine-tool components, textile and
flour-mill equipment, railroad locomotives and
efforts have already produced results, and it
is likely that within a few years self-sufficiency
cars, bearings of all types, and copper
products.
in cotton will be achieved.
Crude Rubber
Fertilizers (Ammonium Sulfate)
2. Communist China's situation with respect
4. All ammonium sulfate currently imported
to imports of crude rubber is unclear. In
by Communist China comes from non-Bloc
1950 and in the first half of 1951, imports of
sources. These imports are projected at 60,-
rubber were several times the highest possible
000 metric tons (US $9 million) for 1952. The
consumption rate. While a considerable pro-
USSR and East Germany are exporters of am-
portion of these purchases was probably for
monium sulfate and could replace non-Bloc
transshipment to the USSR, accumulated
sources. However, ammonium sulfate is a
stocks in Communist China may be high. If
low-priority, bulk item which the Bloc might
so, Communist China can temporarily forego
not deliver if shipping space were scarce.
TOP SECRET
TOP SECRET
18
Industrial Chemicals (including dyes)
d. There is a wide variety of miscellaneous
5. Imports of industrial chemicals from non-
industrial chemicals consumed in Communist
Bloc sources for 1952 are projected at 20,000
China which, because the Bloc's supply is low,
metric tons of industrial chemicals (US $16
would not be replaced in full in the event of a
million) and 10,000 metric tons of dyestuffs
Western embargo. These include such items
(US $15 million). These imports of indus-
as paints and pigments, chlorates, bichro-
trial chemicals, although small in value and
mates, bleachery powder, and cyanides.
volume, comprise a wide variety of products.
If they were cut off, the Bloc would probably
Paper
replace most of them. Specifically:
6. Communist China's imports of paper are
a. Chinese demands for rubber chemicals
projected at 75,000 metric tons (US $15
are quite small and probably would be met to
million) for 1952. Paper is one of the major
the extent necessary to maintain production.
exports of the Soviet Bloc and Communist
b. Although the supply of caustic soda, soda
China's demand could easily be met so far as
ash, and certain organic products is tight in
availability in the Bloc is concerned. How-
the Soviet Bloc, the Bloc would probably sup-
ever, paper is a bulk item on which shipments
ply China's needs for military purposes and
might be reduced or withheld during a period
might supply China's small civilian needs as
of transport stringency.
well.
c. Communist China uses substantial quan-
Gunny Bags
tities of dyestuffs and textile chemicals, in-
7. Communist China's imports of gunny bags
cluding aniline oil, dinitrochlorobenzene,
from non-Bloc countries are projected at 30,-
dinitrotoluene, nitrobenzene, and sodium hy-
000 metric tons (US $12 million) for 1952.
drosulfite. Uses include textile dyeing and
If Communist China were denied access to
the manufacture of explosives. For the
these sources, it is improbable that the rest
former use the Bloc would probably supply
of the Bloc, which is dependent on external
the necessary chemicals; for the latter it
sources for gunny bags, would make up for
would probably prefer to supply finished ex-
the loss. It is probable, however, that Com-
plosives rather than to supply the necessary
chemicals.
munist China could make use of domestically
produced substitutes.
TOP SECRET
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"ocrText": "NATIONAL ARCHIVES AND RECORDS SERVICE\nWITHDRAWAL SHEET (PRESIDENTIAL LIBRARIES)\nFORM OF\nDOCUMENT\nCORRESPONDENTS OR TITLE\nDATE\nRESTRICTION\nMemo\nRe Statement of Policy by N.S.C. on Southeast Asia\n12-29-51\nA\nDECLASSIFIED\nMemo\nFor Senior NSC Staff from James S. Tay, Jr. re\n1-18-64\nSoutheast Asia\nDECLASTIFIED, 6/2011\n2-1-52\nA\nReport\nC.I.A. Report re Indochina, Burma, & Thailand (SE-22) 3-4-52\nA\nMemo\nFor Socy. of State & Defense from James S Tay, Jr.\nDECLASTIFIED\n1-18-24\nre Southeast Asia\n3-13-52\nA\n-Memo\nFor N.S.C. from James S. Lay, Jr. re Southeast Asia\n4-15-52\nA\nDECLARIFIED\n1-10-84\nMemo\nFor the N.S.C. from James S. Tay, Jr. re Southeast\nAsia (attachment) DECLASSIFIED 1-10-14\n4-30-52\nA\nMemo\nFor the N.S.C. from James S. Lay, Jr. re Southeast\nDECLARIFIED\n1-18-24\nAsia (attachment)\n5-21-52\nA\nSANITIZES, 11/2007\nReport\nC.I.A. Report on Communist China (SE-27)\n6-5-52\nA\nReport\nTo the N.S.C. on Southeast Asia (NSC 124/1) NLTFI-14 SANITIZED\n6-19-52\nA\n-\nReport\nN.S.O. Sucks Status of Projects as of 6-23-52 Declarefied 1/2014\nA\nMemo\nFor the N.S.C. from James S. Tay, Jr. re NSC 124/1\n6-24-52\nA\nDECLASSIFIED\nMemo\nFor the N.S.C. from James S. Lay, Jr. re NSO 124/1\n6-25-52\n1-14-d4\nMomo\nFor the N.S.C. from James B. Iny, Jr. re NSC 124/1\n6-25-52\nA\nAgenda\nFor the N.S.C. Meeting 6-25-52\nDECLARIFIED\n6-20-52\nA\nMinutes\nOf the N.S.C. Meeting 6-25-52\n4-26-63\nA\nMemo\nFor the President from James S. Lay, Jr. re NSC 124/1 6-25-52\nA\nDECLASSIFIED 1-18 -Py\nFILE LOCATION\nTRUMAN PAPERS - P.S.F. - SUBJECT FILE\nN.S.C. - MEETINGS\nFOLDER: MEETING NO. 120\n6-25-52\n[Box 217]\nRESTRICTION CODES\n(A) Closed by Executive Order 11652 governing access to national security information.\n(B) Closed by statute or by the agency which originated the document.\n(C) Closed in accordance with restrictions contained in the donor's deed of gift.\nGENERAL SERVICES ADMINISTRATION\nGSA DC 73-495\nGSA FORM 7122 (7.72)\n—\nCONFIDENTIAL\nCOPY NO.1\nFOR THE PRESIDENT\nTOP- SECRET\nOF THE UNITED STATES\nSECURITY INFORMATION\n029443\nSPECIAL ESTIMATE\nPROBABLE EFFECTS OF VARIOUS POSSIBLE\nCOURSES OF ACTION WITH RESPECT\nTO COMMUNIST CHINA\nINTELLIGENCE\nACENCY CENTRAL\nLUNITED STATES OF AMERICA\nSE-27\nPublished 5 June 1952\nCENTRAL INTELLIGENCE AGENCY\nDECLASSIFIED IN PART\nE.O. 13526\nAuthority LP.HST 2012.008 #32\nDOWNGRADED TO CONFIDENTIAL\nNARA PMH Date 12/17/2015\nProject NLT 81-15\nTOP SECRET\n0 HC NARS, D 11-10-12\nWARNING\nThis material contains information affecting\nthe national defense of the United States\nwithin the meaning of the espionage laws,\nTitle 18, USC, Secs. 793 and 794, the trans-\nmission or revelation of which in any manner\nto an unauthorized person is prohibited by law.\nTOP SECRET\nSECURITY INFORMATION\nSPECIAL ESTIMATE\nPROBABLE EFFECTS OF VARIOUS POSSIBLE\nCOURSES OF ACTION WITH RESPECT\nTO COMMUNIST CHINA\nSE-27\nThe intelligence organizations of the Departments of State,\nthe Army, the Navy, the Air Force, and the Joint Staff\nparticipated with the Central Intelligence Agency in the\npreparation of this estimate. All members of the Intelli-\ngence Advisory Committee concurred in this estimate on 29\nMay 1952.\nTOP SECRET\nTOP SECRET\nPROBABLE EFFECTS OF VARIOUS POSSIBLE COURSES OF\nACTION WITH RESPECT TO COMMUNIST CHINA\nTHE PROBLEM\nTo analyze the current status and effectiveness of controls on trade with Commu-\nnist China, to examine the probable effectiveness of certain additional pressures which\ncould be applied against Communist China, and to estimate Communist reactions to\nthese measures.\nASSUMPTION\nA continuation of the present situation or an intensification of the fighting in\nKorea.\nCONCLUSIONS\n1. Present free world controls on exports\npel Communist China to rely on overland\nto Communist China have not prevented\nshipments from the USSR for virtually\nthe build-up of Chinese Communist mili-\nall its imports. Such a blockade would\ntary strength. However, these controls\nnot be effective unless it included Port\nhave somewhat retarded the development\nArthur and Dairen.\nof Communist China's economic poten-\ntial.\n4. This blockade would subject Commu-\n2. Even if present controls were extended\nnist China to considerable economic\nand strengthened so as to effect a total\nstrain. We do not believe that, in the\nembargo on non-Communist trade with\nshort run, there would be any significant\nCommunist China, the Soviet Bloc would\nreduction in Chinese Communist military\nprobably assume the costs of meeting\ncapabilities or in the stability of the\nCommunist China's most important non-\nregime. A blockade would, however, seri-\nmilitary requirements without curtailing\nously interfere with the execution of Chi-\nthe delivery of military items so long as\nnese Communist long-term plans for eco-\nWestern ships remained available for\nnomic development and would make it\ncharter and transfer to meet Soviet Bloc\nmore costly for the USSR to underwrite\nshipping needs elsewhere.\nan expansion of present Chinese Com-\n3. Imposition of a naval blockade in con-\nmunist military capabilities or new mili-\njunction with a total embargo would com-\ntary ventures.\nTOP SECRET\n1\nTOP SECRET\n2\n5. In conjunction with an embargo and a\nchant ships into Port Arthur and Dairen,\nnaval blockade, effective and sustained\nby attempting to force the blockade at\naerial interdiction of key elements in the\nother points, or by waging mine and sub-\nChinese Communist rail and waterways\nmarine warfare against the blockading\nsystem could have an extremely serious\nforces. Blockading forces might also be\neffect on Chinese Communist military\nsubject to attack by the Chinese Commu-\ncapabilities, and the problems of main-\nnist Air Force.¹ However, the Kremlin\ntaining the regime's political and eco-\nnomic controls would be greatly aggra-\nwould make its decision with regard to\nvated. Achievement of these significant\nthe blockade in the light of the global\nresults, however, would require a large-\npolicy of the USSR, and probably would\nscale and sustained air bombardment\nnot make a determined effort to break\ncampaign.\nthe blockade unless the USSR was pre-\npared to accept a major extension of hos-\n6. Imposition of a total embargo on non-\nCommunist trade with China would prob-\ntilities with greatly increased likelihood\nably have no significant effects on Chi-\nof general war.\nnese Communist or Soviet military\n9. The Chinese Communists could be ex-\ncourses of action.\npected to react to air attacks on their\n7. Since a naval blockade would aggra-\nlines of communications by making a\nvate the logistical problems of Communist\nmaximum air defensive effort which\nforces in the Far East, overland military\nmight include air attacks against US/UN\nventures would be somewhat more diffi-\nbases and aircraft carriers. Soviet air\ncult to undertake and overseas ventures\nunits would probably participate in the\nmuch more difficult. On the other hand,\nair defense effort ostensibly as a part of\nimposition of a blockade would cause the\nthe Communist Air Force in China. In\nCommunists to reappraise Western inten-\nthis event, there would be an extension\ntions and might possibly impel them to\nof the de facto air war between the US\naccept new risks in Korea, Indochina, or\nand the USSR which we have grave rea-\nelsewhere.\nson to believe already exists in Korea.\n8. The USSR might react to a naval\nblockade by attempting to escort mer-\n¹See footnote to paragraph 41, page 9 below.\nTOP SECRET\nTOP SECRET\n3\nDISCUSSION\nEXTENT OF PRESENT CONTROLS ON TRADE\nrest of the Soviet Bloc. These restrictions,\nWITH COMMUNIST CHINA\nhowever, have not prevented the circumven-\ntion of controls and the transfer of at least\n10. Most of the nations outside the Soviet\n27 vessels to Soviet Bloc flags since October\nBloc apply some form of export controls\n1950. Chartering controls and controls on\nagainst Communist China. The US has main-\nship construction, repairs, and bunkering are\ntained a total trade and shipping embargo\npractically non-existent. Although thegreater\nagainst Communist China ever since Decem-\npercentage of chartered vessels do not touch\nber 1950, while Canada and Japan have im-\na Communist Chinese port, many of these\nposed restrictions almost as complete. The\nvessels are employed in Western European,\nUK has blocked or restricted the shipment of\nSouth Atlantic, and Indian Ocean trade, there-\na wide variety of strategic items, and, since\nby releasing Communist flag vessels for direct\nJuly 1950, most of the Western European\nservice to Communist China. The US alone\ncountries, as members of the Coordinating\nprohibits vessels of its own registry from en-\nCommittee (COCOM)2 on East-West trade,\ntering the Communist Chinese supply line.\nhave applied to Communist China the selec-\nSuch controls, however, do not affect vessels\ntive controls put into effect against the rest\nof foreign registry which are owned and oper-\nof the Soviet Bloc at the beginning of that\nated by persons residing within the US.\nyear. A great number of other nations have\ntaken action to restrict shipments to Commu-\nTHE EFFECT OF PRESENT CONTROLS\nnist China in accordance with the UN Addi-\nON COMMUNIST CHINA\ntional Measures Resolution of May 1951.\nEffect on Foreign Trade\n11. There has been a wide variation, however,\nin the contraband lists and enforcement\n13. Imports from non-Soviet Bloc Countries.\nmeasures being used by individual countries.\nThe value of the goods imported from non-\nAlthough the controls imposed by the UK and\nCommunist countries by Communist China\nthe continental COCOM countries are fairly\nrose above the 1950 level in the first half of\ncomprehensive, they fall far short of the total\n1951, but dropped sharply below 1950 levels\nembargo imposed by the US. Other nations\nin the second half of 1951. (As against the\nhave shown little uniformity in their inter-\nestimated 1950 figure of US $414 million,\npretation of the UN resolution, which covers\nthese imports were estimated at US $382 mil-\ntransport supplies and equipment of strate-\nlion during the first half of 1951 and at US\ngic value and items useful in war production\n$148 million in the second half for a 1951\nas well as petroleum and purely military\ntotal of US $530 million.) In categories of\nitems. A number of Middle Eastern and\ngoods which most countries control, such\nSoutheast Asian countries have made no more\nas strategic materials, the decline in imports\nthan a general commitment to deny strategic\nwas far greater than in other categories.³\nmaterials to Communist China, while India,\nFragmentary information for the first four\nPakistan, Burma, and Ceylon have taken no\nmonths of 1952 indicates that Communist\naction under the UN resolution.\nChina's imports from the West have con-\ntinued to decline: current imports are prob-\n12. Shipping controls have been particularly\nably less than half the rate estimated for the\nweak. All the COCOM countries prohibit sales\nlast six months of 1951.\nof ships to Communist China and have agreed\nto impose restrictions on sales of ships to the\n14. Trade controls have probably deprived\nCommunist China of a high percentage of cer-\n2 Participants in the COCOM include Belgium,\ntain items which it might have otherwise\nDenmark, France, West Germany, Italy, Luxem-\nobtained from non-Communist sources. Such\nbourg, the Netherlands, Norway, and Portugal as\nwell as the US, the UK, and Canada.\n3 See Annex A, Tables I and II.\nTOP SECRET\nTOP SECRET\n4\ncontrolled items as Communist China has suc-\nBloc as a consequence of the necessary diver-\nceeded in obtaining from non-Communist\nsion of resources to Communist China.\nsources have been purchased at higher prices,\nowing to the risks attendant on smuggling or\nEconomic Effects\nto the greater cost of indirect importation\n17. Industrial Effects. The restriction of im-\nmethods. Even for those items which only a\nports into Communist China as a result of\nfew countries have subjected to export con-\npresent controls has not curtailed its indus-\ntrol, Communist China has been confronted\ntrial output. In fact, because the Soviet Bloc\nwith substantially increased prices as a con-\nhas compensated for the most critical com-\nsequence of a tighter supply situation. For\nmodities included in the embargo and because\nexample, the forced shift from the US to\nof more effective use of available equipment\nPakistan as the major supplier of raw cotton\nand stocks in China, industrial output has\nhas been very expensive to the Chinese Com-\ncontinued to expand. However, shortages of\nmunists. Finally, the loss of markets in non-\nlubricants, industrial chemicals, and capital\nCommunist countries, especially the US and\ngoods for maintenance have almost certainly\nJapan, has reduced Communist China's for-\nhampered the Chinese in achieving produc-\neign exchange earnings from exports and\ntion goals and expanding capacity.\nthereby its total import capabilities.\n18. Effect on the Railroads. The railroad\n15. Imports from Soviet Bloc Countries. On\ntransportation system of Communist China,\nthe basis of fragmentary and unconfirmed\nwhile not expanding to the extent it would\ndata, it is estimated that exports to Commu-\nhave without present Western controls, has\nnist China from the Soviet Bloc in 1951 were\nsteadily improved in capacity and perfor-\nof the general order of magnitude of US $1\nmance. Chinese railroads are now in better\nbillion. This compares with a corresponding\nover-all condition than at any previous time\nestimate for 1950 of slightly over US $100\nsince 1945. Control measures have stopped\nmillion. The composition of the 1951 imports\nimports of locomotives, freight cars, rolling\ncan be only very roughly estimated, but it\nstock parts, and rails from the West. Because\nappears that a major part of these imports\nof Communist China's low capacity for the\nconsisted of military equipment and supplies,\nmanufacture of freight cars, these controls,\npetroleum products, machinery, vehicles, and\ntogether with losses in Korea, have substan-\nmetal manufactures. Military equipment and\ntially retarded expansion of the freight-car\nsupplies almost certainly accounted for most\npark, but this deficiency has been more than\nof the increase in 1951 imports over 1950.\noffset by increased efficiency in use of present\n16. The adverse effects on Communist China\nfacilities and equipment. Present Western\nof the curtailment of imports from the West,\ncontrols on rails have apparently delayed com-\nparticularly with respect to China's essential\npletion of some new lines already under con-\nrequirements for petroleum and transport\nstruction and may have prevented work being\nequipment, as well as some other critical ma-\nundertaken on other new lines. Although in\nterials, have apparently been increasingly off-\nthe long run, the adverse effect of present con-\nset by imports from the Soviet Bloc. However,\ntrols will almost certainly increase, minimum\nthe Soviet Bloc has been unable or unwilling\nreplacement requirements for rolling stock\nto compensate in full for the reduction in im-\nand rails are likely to be met with Soviet\nassistance.\nports from the West of raw cotton, lubricants,\nand other items of lesser importance such as\n19. Effect on Other Internal Transportation.\npaper and gunny bags. It is not known to\nBecause of the relative insignificance of non-\nwhat extent the Soviet Bloc has met Commu-\nmilitary motor transport in China, the de-\nnist China's requirements for heavy machin-\nterioration in the civilian motor vehicle park\nery and other capital goods embargoed by the\nresulting from present controls has had no\nWest. It is evident that Western trade con-\nserious effect on the economy. (The large im-\ntrols have imposed some burden on the Soviet\nports of Soviet motor vehicles have gone al-\nTOP SECRET\nTOP SECRET\n5\nmost exclusively into military uses.) While\nhindered the Chinese Communists in their\nWestern trade controls have to some extent\nefforts to put back into service and maintain\nrestricted Chinese Communist capabilities for\ntheir naval vessels. As far as is known, the\nship construction and repairs, such measures\nUSSR has supplied at most only a few small\ndo not appear to have hampered Communist\nwarships to the Chinese Communists, forcing\nChina's own coastal or inland water trans-\nthem to rely almost entirely on those ships\nportation capabilities. Moreover, gaps in\ntaken over from the Nationalists.\nWestern shipping controls have permitted\nCommunist China to add significantly to its\nInternal Political Effects\ncoastal and inland water transport by charter\n24. Economic strains in Communist China,\nor indirect purchase of Western vessels.\nto which trade controls have probably con-\n20. Other Economic Effects. Western trade\ntributed to only a minor degree, have created\ncontrols have contributed somewhat to the\nno new problems but have intensified existing\nChinese Communist regime's financial diffi-\nproblems. The government has been forced\nculties by adding to the strong inflationary\nto take strong anti-inflationary measures, en-\npressures caused by the Korean war. The\ntailing some loss in popular support and some\nnon-industrialized segments of Communist\nincrease in its administrative burden. Never-\nChina's economy have few requirements for\ntheless, the regime has continued to consoli-\nimported materials and have, therefore, been\ndate its political position.\nlittle affected by the embargo.\nPROBABLE EFFECT OF A TOTAL EMBARGO\nON NON-COMMUNIST TRADE\nMilitary Effects\nWITH COMMUNIST CHINA\n21. Ground Forces. The Chinese Communist\nGround Forces have not been adversely\nIntroductory Note\naffected by Western controls. Communist\n25. The imposition of a total embargo by the\nChina produced the bulk of its own require-\nentire non-Communist world would presum-\nments for light ground force equipment and\nably extend to both trade and shipping. The\nsupplies. The materials required for China's\nimplementation of such an embargo would\nmunitions industry are relatively small in\npresumably include measures to prevent the\ntonnage and are for the most part produced\ntransfer or charter of non-Communist ship-\ndomestically. The only important import re-\nping to Communist China or the transship-\nquirements are for copper and zinc, which are\nment of non-Communist goods directly or\nsupplied in adequate quantities for the most\nindirectly to Communist China from other\nessential uses by the USSR. In addition, the\ncountries in the Soviet Bloc.⁴ By definition,\nUSSR is providing most of the heavy military\nsuch an embargo would cut off Communist\nequipment, virtually all POL, and some light\nChina's trade (except smuggling) with all\nequipment and supplies.\ncountries outside the Soviet Bloc. It would\n22. Air Force. Since the USSR provides Com-\nIt should be noted in this connection that\nmunist China with virtually all aviation\npresent trade controls with Communist countries\nequipment and supplies including avgas, pres-\nother than China are considerably less rigid than\nent Western controls on strategic materials\nthose applying to China. To the extent that the\nhave not affected the capabilities of the Chi-\nmeasures taken to enforce a total embargo were\nnese Communist Air Force. The Air Force has\nineffective in preventing either the direct or in-\ndirect transfer of non-Communist shipping of\ncontinued to expand in aircraft strength and\ngoods to Communist China from other Commu-\ncapabilities throughout the period of present\nnist countries, the effects of this embargo would\nWestern controls.\nbe negated. (For example, by chartering or\nclandestine purchase of non-Communist ship-\n23. Navy. Since a large part of the Chinese\nping the other Communist countries could ob-\nCommunist Navy is composed of former for-\ntain enough chartered shipping to fulfill their\neign naval vessels, present Western controls\nrequirements in the other areas and permit as\non strategic materials have almost certainly\nmany Communist flag vessels as necessary to\nenter the China trade.)\nTOP SECRET\nTOP SECRET\n6\nrepresent the strongest form of economic\na. Under present controls, Communist Chi-\npressure that could be brought to bear against\nna's legitimate imports from the non-Commu-\nCommunist China short of a general East-\nnist world during 1952 would be of the order\nWest trade and shipping embargo.\nof 450,000 metric tons, with a total value of\n26. The means by which such an embargo\nsome US $270 million. This, then, represents\nwould be implemented is beyond the scope of\nthe theoretical annual loss of imports result-\nthis paper. Whether or not such an embargo\ning from a total embargo.\nwould be politically feasible or even desirable\nb. It is unlikely that the present rate of\nin the light of its economic repercussions on\nsmuggling could be increased significantly\nthe non-Communist world is also beyond the\ninasmuch as a complete embargo would nec-\nscope of this estimate.\nessarily involve a general strengthening of\ncontrols. Clandestine imports would tend in-\nShort-Run Effects\ncreasingly to consist of items of small bulk\n27. Effect on Imports. The direct impact on\nand high value, such as drugs, motor vehicle\nimports of a total embargo would depend on\nparts, and chemicals, but the total volume\nthe volume and importance of the materials\nmay be assumed to be about 50,000 tons, the\nCommunist China would otherwise obtain\nlevel projected for 1952 under the assumption\nfrom the non-Communist countries, and on\nof present controls.\nthe extent to which the Chinese Communists\n29. The degree to which the Soviet Bloc will\nwould be capable of making up this loss\ncompensate for the loss of imports from the\nthrough smuggling and through compensat-\nWest will depend in general on the Soviet ap-\ning shipments from the Soviet Bloc. This last\npraisal of the relative advantages of using re-\nfactor in turn would depend on the extent to\nsources in Communist China as opposed to\nwhich the Soviet Bloc was able and willing to:\nthe resources elsewhere in the Soviet Orbit,\n(a) make up for the loss of Western shipping\nincluding the USSR itself. Transport facilities\n(including that now chartered by the Com-\nand the supply of commodities within the Bloc\nmunists) now serving the China trade; (b)\nare not likely to impose an absolute limit on\nsupply the specific commodities denied by the\nSoviet exports to China. However, in the case\nWest; and (c) advance goods to Communist\nof commodities considered by the Soviet Union\nChina in excess of the latter's immediate abil-\nto be less essential to Communist China, the\nity to pay in goods or foreign exchange.\nvolume of Soviet exports may be limited by the\n28. The lack of reliable data on Communist\namount of grants or credits the Soviet Union\nChina's foreign trade and on the Soviet Bloc's\nis willing to extend to Communist China.⁶\neconomic capabilities makes it impossible to\na. The Soviet Union has a strong interest\nestimate with precision the impact of a total\nin maintaining Chinese Communist strength\nembargo on Communist China. The following\nand for this reason would probably assign a\nprojection is based on the estimated level of\nhigh priority to those Chinese Communist\ntrade during the last half of 1951.⁵\nimport requirements that have a significant\neffect, directly or indirectly, on Chinese Com-\nThe last half of 1951 was used as the basis for\nmunist military capabilities. Much lower\nprojecting Communist China's imports from the\nWest in 1952, assuming a continuation of present\ncontrols, because it is the most representative\nSee Annex B for a discussion of the Soviet Bloc's\nperiod for which complete data are available.\nability and willingness to replace various types of\nAnnex A, Table III, shows this projection. How-\nimports which Communist China would lose as\never, fragmentary data indicate that the rate of\nthe result of a total embargo.\nCommunist China's imports from the West during\nthe first four months of 1952 was probably less\ntoo high. On this basis the adjustments that\nthan half the rate estimated for the last six\nthe Soviet Bloc would have to make as a result\nmonths of 1951. To the extent that this trend\nof the imposition by the West of a total embargo\ncontinues, this projection of Communist China's\non its trade with Communist China would be less\nimports from the West under present controls is\nthan is indicated in this paper.\nTOP SECRET\nTOP SECRET\n7\npriorities would be assigned to supplying the\nthus be about 2,500,000 metric tons. The net\nremaining commodities Communist China\nreduction of imports estimated in paragraph\nformerly imported from the West. It is prob-\n29-a above — about 100,000 metric tons —\nable, therefore, that such commodities would\nwould thus represent about 13 percent of es-\nbe supplied only to the degree that the burden\ntimated non-military imports during 1952 and\nthus imposed on the rest of the Soviet Orbit\nonly about 4 percent of over-all imports. Even\nwould be relatively small. On this basis, it\nallowing for a considerable margin of error\nis estimated roughly that the Soviet Bloc\nin the estimate of 1952 Soviet Bloc imports\nwould make up for the loss of virtually all\nunder present controls, it is evident that im-\nthe iron and steel and much of the machinery\nposition of a complete embargo would not\nand metal products, industrial chemicals,\neffect a major reduction in the present total\nammonium sulfate fertilizer, dyes, drugs, and\nvolume of imports.\npaper which otherwise would have come from\nnon-Soviet countries. However, because of\n31. A total embargo on non-Communist trade\nshortages within the Bloc and because the\nwith Communist China would not affect the\ncommodities concerned would be considered\nflow of purely military items and petroleum,\nless essential to Communist China, the Soviet\nall of which (except for limited quantities\nUnion probably would not compensate for\nbrought in by smuggling) now come from the\nmore than a small portion of the raw cotton\nSoviet Bloc. Military considerations would al-\nand cotton cloth, rubber, gunny bags, and\nmost certainly determine the relative priority\nsugar which Communist China otherwise\nof compensating shipments from the Soviet\nwould have obtained from the West. In over-\nBloc and, consequently, goods related to mili-\nall magnitude, the Soviet Bloc could probably\ntary operations would probably be least\nincrease its annual rate of exports to Commu-\naffected by a complete embargo.\nnist China by about $200 million in value and\n32. Economic Effects. The most important\nabout 350,000 metric tons in volume, reducing\neffect of the estimated loss of imports upon\nthe net import loss to about 100,000 metric\nthe current industrial output of Communist\ntons.\nChina would probably be concentrated in the\nb. Movement from Eastern Europe of these\ntextile industry. Curtailment of raw cotton\nadditional shipments from the Soviet Bloc\nimports could be expected to reduce textile\n- which would equal the capacity of 15 to\nmill output by roughly 10 percent. The loss\n20 Liberty-type ships on the basis of three\nof other imports, such as natural rubber and\nround trips a year — is believed well within\nvarious types of machinery and raw materials,\nthe capabilities of the Soviet and Polish mer-\nwould also reduce output of some other con-\nchant fleets, so long as Western ships remain\nsumers' goods. This limited reduction in con-\navailable for charter to meet Soviet Bloc ship-\nsumer goods output might increase inflation-\nping requirements elsewhere. Moreover, some\nary pressures. In other lines, production\nadditional shipments could be made overland\nwould probably continue at approximately\nif the Soviet Bloc were willing to bear the costs\npresent levels, although the dislocations re-\ninvolved. (See paragraph 43 below.)\nsulting from the embargo might prevent, in\n30. The effect on total volume of Chinese\nsome fields, the attainment of projected out-\nCommunist imports from all sources would\nput expansion. The loss of ammonium sul-\nalso be relatively small. On the basis of the\nfate fertilizer would not have serious effects\nmeager data now available, it appears prob-\nin view of the availability of domestic organic\nable that, given continuation of present con-\nfertilizers, which are in far more general use.\ntrols, Soviet Bloc shipments to Communist\nFinally, with imports and production of some\nChina during 1952 would be of the order of\nconsumer goods reduced and non-Communist\n2,000,000 metric tons - possibly 85 percent of\nmarkets virtually eliminated, the government\nit military in character — and that Commu-\nwould be confronted with a sizable loss of\nnist China's total imports for the period would\nrevenue.\nTOP SECRET\nTOP SECRET\n8\n33. Military Effects. A total embargo by non-\nplete embargo on non-Communist trade with\nSoviet Bloc countries would probably have no\nCommunist China on output in Communist\nsignificant short-run effect on the capabilities\nChina would probably decrease rather than\nof the Chinese armed forces.\nincrease with the passage of time. The loss\n34. Internal Political Effects. A total embar-\nof cotton and other raw materials, for exam-\ngo by the non-Soviet Bloc would increase the\nple, could and probably would be made up in\nChinese Communist regime's difficulties, but\nlarge part through the development of do-\nit is unlikely that this additional strain would\nmestic-production or of domestically produced\nseriously impair Communist control.\nsubstitutes. Industrial output could probably\nequal or exceed present levels, although the\n35. Burden on the Rest of the Soviet Bloc.\nstrains on existing plant and the competing\nA total embargo would increase the economic\ndemands of the military might result in some\nburden that Communist China imposes on the\nfailure to replace worn-out equipment, with\nrest of the Soviet Bloc. This burden cannot\na consequent decline in output, unless such\nbe precisely estimated, but the following fac-\nworn-out equipment (particularly that of\ntors may be noted:\nUS, British, or Japanese origin) were replaced\na. Available trade data, based largely on\nfrom the Soviet Bloc. Despite capital goods\nChinese Communist sources, suggest that in\nshortages in the Soviet Bloc, the Bloc would\n1951 Communist China had an import surplus\nprobably accept the costs of meeting Com-\nof approximately $500 million with the rest\nmunist China's major capital replacement\nof the Bloc, which is presumed to have been\nneeds. However, the embargo would almost\nfinanced for the most part by Soviet grants\ncertainly interfere with Chinese Communist\nor credits. Under a total embargo against\nplans for reconstruction and economic de-\nCommunist China, the level of Soviet grants\nvelopment.\nor credits would tend to increase, since the\n37. Continued denial of Western sources of\nestimated rise in Soviet exports to Communist\nChina could not be fully compensated for by\nsupply would pose a severe problem for the\nan increase in imports from Communist\nChinese Communist railway system, which\nChina.\nwould almost certainly decline in capacity\nand efficiency unless steps were taken to off-\nb. The rest of the Soviet Bloc would, to a\nset the progessive deterioration of equipment.\ngreater extent than before, be exporting to\nThis would place some burden on the Soviet\nCommunist China many commodities that it\nBloc, whether it sought to supply the nec-\nnormally imports for its own use, and would\nesssary rails, locomotives, and freight cars\nbe receiving from Communist China commod-\nitself, or attempted to restore Manchurian\nities that are less essential to its needs.\ncapacity for rolling steel rails and to expand\nc. The increase in traffic over the Trans-\nthe production of freight cars and locomotives\nSiberian railroad since the beginning of the\nin China. However, it is probable that the\nKorean war has required a noticeable diver-\nUSSR would be able to supply minimum Chi-\nsion of rolling stock from other railroads in\nnese Communist requirements without ser-\nthe Soviet Union. However, so long as the\nious repercussions in other portions of the\nBloc had access to sufficient shipping capac-\nSoviet Bloc economy.\nity to carry the estimated increase in exports\nto Communist China, a total embargo would\n38. Military Effects. Over a longer period, a\npresumably impose no further strain on the\ntotal embargo would not reduce present Chi-\nSoviet rail system.\nnese Communist military capabilities but it\nmight hinder an expansion of those capabil-\nLong-Run Effects\nties.\n36. Economic Effects. Assuming that im-\n39. Internal Political Effects. Over a longer\nports from the Soviet Bloc are maintained at\nperiod, the embargo would probably not sig-\nleast at the level projected in paragraph 20\nnificantly reduce the effectiveness of the re-\nabove, the adverse economic effects of a com-\ngime's control over the Chinese people.\nTOP SECRET\nToΓ SECRET\n9\n40. Effect on Sino-Soviet Relations. A total\n42. A naval blockade would also presumably\nembargo would tend to increase the possibili-\noperate against Communist China's coastal\nties of Sino-Soviet friction. Should the Soviet\ntrade. Although a blockade would not be\nUnion be unwilling to continue to accept in-\nvery effective against local inshore coastal\ndefinitely the increased burden required to\nshipping, it would virtually eliminate Com-\nsupport Communist China under a total em-\nmunist China's substantial ocean-going coast-\nbargo, the adverse effect of the embargo on\nal traffic. The most important component of\nCommunist China would be increased. Even\nthis trade is that between Shanghai and the\nunder the projected level of Soviet exports\nnorthern ports of Chinwangtao (from which\nto Communist China, the Chinese Commu-\nShanghai gets coal) and Dairen (from which\nnists might feel that their needs should be\nit obtains industrial raw materials in return\ngiven higher priority.\nfor manufactured goods). The shipping now\nengaged between Shanghai and these ports\nPROBABLE EFFECTIVENESS OF A NAVAL\nhas an annual capacity of more than one\nBLOCKADE IN INCREASING THE\nmillion metric tons each way.\nPRESSURE ON COMMUNIST CHINA\n43. Against the loss of seaborne imports pro-\njected above (totalling somewhat less than\nIncluding Port Arthur and Dairen\n900,000 metric tons) must be balanced the\n41. Effect on Chinese Communist Trade.\nlikely increases in imports from the Soviet\nWhereas an embargo would operate only\nBloc by overland routes. Overland shipments\nagainst non-Communist trade and ship-\nfrom the USSR to Communist China in 1952\nping, a naval blockade would interdict smug-\nunder present controls are projected at 1,600,-\ngling and Soviet Bloc seaborne shipments as\n000 metric tons, or the level tentatively esti-\nwell, thus restricting Communist China's im-\nmated to have been shipped in 1951. This\nports almost entirely to those which could be\nlevel of traffic represents considerably less\nbrought in overland from the USSR.⁷ On the\nthan the theoretical maximum capacity of the\noverland routes which could be used to supply\nbasis of our tentative projection of Chinese\nCommunist China and North Korea; it is\nCommunist imports under present controls,\nprobable that, if the need were great enough,\nthe resultant direct loss in imports as a result\nthese overland routes could carry, in addition\nof a naval blockade would amount to 450,000\nto their present traffic, all of the cargo that\nmetric tons in legitimate imports from non-\nwould otherwise have come in by sea - mak-\nCommunist countries plus up to 400,000 met-\ning a total of some 2,500,000 tons on the basis\nric tons in shipments which would otherwise\nof our present projection.⁸ In this event, how-\nhave come in by sea from Soviet Bloc sources\nor through smuggling.\nDuring World War II the Trans-Siberian Railway\ncarried Lend-Lease materials westward at a rate\nIt is estimated that a naval blockade of the\nof six million tons a year over certain periods.\nChina coast, including the Soviet-controlled\nThis level would probably represent a close ap-\nManchurian ports of Dairen and Port Arthur,\nproximation of the theoretical maximum east-\nwould cut off 75-90 percent of the tonnage which\nbound capacity, although its attainment would\nwould otherwise have come in through smuggling\nnecessitate a very considerable sacrifice in\nand Soviet Bloc seaborne shipment. It is be-\ndiverting scarce rolling stock from other rail lines\nlieved that such a blockade could be set up so\nin the USSR. In the recent US-UK study, EIC-\nas to avoid effective Chinese Communist air and\nR1, Status and Effectiveness of Trade Controls\nnaval counteraction. If Soviet or other Commu-\nagainst Communist China, considerably lower\nnist shipping attempted to run the blockade un-\nestimates were made of the amounts which the\nder Soviet naval escort — a possibility discussed\nTrans-Siberian could deliver to the Manchurian\nin Section VI- achievement of the interdiction\nborder, the US specialists presenting a figure of\neffect estimated here would obviously depend on\n3.3 million tons a year and the British a figure\nthe willingness of the US and other blockading\nof 1.7 million tons. Both these estimates, how-\npowers to risk an open clash with the Soviet\never, assumed prior fulfillment of the needs of\nescort vessels.\n(Footnote continued on page 10)\nTOP SECRET\nTOP SECRET\n10\never, the cost to the Soviet Bloc of supplying\nelimination of a large part of coastal shipping\nthese commodities would be substantially in-\nand the fact that all imports would have to\ncreased. Additional rolling stock would have\nenter via Manchurian entry points would in-\nto be diverted from other railroads in the\ncrease the already serious strain on the rail-\nSoviet Union and a reduction might have to\nroads, curtailing internal trade and limiting\nbe made in the volume of commodities mov-\ntotal production. Over the long run, indus-\ning to the Soviet Far East. Moreover, it is\ntrial production would probably decline.\nalso probable that the increased strain which\nWhile this over-all reduction in production\na blockade would impose on Communist\nwould probably not be large, it would add\nChina's internal transport facilities would\nsignificantly, in the context of existing eco-\nmake it difficult if not impossible for the Chi-\nnomic strains, to the inflationary pressures\nnese Communists to distribute from Man-\nconfronting Communist China and would\nchuria some of the imported commodities re-\nseriously interfere with execution of Chinese\nquired in China proper. For these reasons,\nCommunist plans for economic development.\nit is estimated that Soviet exports to Com-\nThese pressures would necessitate increasingly\nmunist China under a blockade would be sub-\nvigorous economic and political controls.\nstantially less than under a total embargo but\n45. Political Effects. Internal controls, al-\nthat they almost certainly would at least cover\nready strong in Communist China, could pre-\nCommunist China's essential military import\nvent any serious increase in overt political\nrequirements.\nopposition to the regime. However, the ad-\n44. Economic Effects. Any substantial reduc-\nministrative burden of these controls would\ntion in over-all Chinese Communist imports\nincrease, and the failure of the regime to\nwould probably entail a drastic reduction in\nmake progress in its economic program would\ncommercial imports from the level projected\nfoster disillusionment with the Chinese Com-\nfor 1952 under present controls. This reduc-\nmunist leadership.\ntion in commercial imports would probably\n46. Military Effects. A naval blockade would\nresult in industrial output being held at or\nbelow 1951 levels instead of attaining the\nnot directly affect the movement of military\nsupplies from the USSR, most of which are\npresently projected expansion. Increasing\nmaintenance and repair difficulties would be\nbeing brought in by overland routes. Never-\ntheless, the denial of seaborne imports and of\nexperienced as a result of the denial of re-\nplacement capital goods. The necessary sub-\ncoastal shipping facilities would probably im-\nstitution of domestic materials for such items\npose some curbs on the importation and in-\nas imported paper, chemicals, gunny bags,\nternal distribution of military supplies be-\nand metals would tend to lower the quality\ncause of congestion of land routes. Mean-\nand increase the costs of production. The\nwhile, the impact of a naval blockade on the\neconomy as a whole would reduce the totality\n(Footnote continued from page 9)\nof domestic resources which could be mobi-\nthe Soviet Far East and thus involved judgments\nlized in support of the war effort. The reduc-\nas to the relative priorities of USSR and Chinese\ntion in Chinese Communist military capabili-\nrequirements; they would presumably have to be\nties would not be great enough to force a\nrevised upwards if new conditions such as the\nreduction of the Chinese Communist military\nblockade increased Chinese requirements for\nshipments over the Trans-Siberian Railway. It\ncommitment in Korea at least for some time.\nmay be noted that the strain on the Trans-\nIt would, however, make more difficult offen-\nSiberian Railway could be reduced by an increase\nsive operations requiring large expenditures\nin seaborne shipments to Vladivostok. The US\nof materiel, either in Korea or elsewhere.\nand the UK intelligence authorities estimated\nrespectively that the capacity of the Manchurian\n47. Effect on Sino-Soviet Relations. A naval\nrail system to accept imports at Manchouli and\nblockade would tend to increase the possibili-\nSuifenho was 2.4 million tons and 2.0 million tons\nannually. Additional shipments could be made\nties of Sino-Soviet friction to a greater extent\nby river, by road, and possibly by a reported rail\nthan would an embargo. Although Soviet\nconnection between Vladivostok and Tu-Men.\nexports to Communist China would be re-\nTOP SECRET\nTOP SECRET\n11\nduced under a blockade as compared with an\ncommunications with the outside world as\nembargo, the cost of providing these com-\nperforce to remain largely self-sufficient. In\nmodities, because of transport difficulties,\ngeneral, however, the maintenance of the\nwould be greater and the possibility of obtain-\npresent level of Chinese Communist military\ning increased imports from Communist China\nand economic activities depends on continued\nwould be less.\navailability of a heavily utilized rail and water\nnetwork which contains a number of bottle-\nExcluding Port Arthur and Dairen\nnecks and lacks a supplementary road system\ncapable of carrying heavy traffic on an all-\n48. A naval blockade would almost certainly\nweather basis. These bottlenecks, all within\nbe ineffective if Dairen and Port Arthur were\nbombing range of US land and carrier-based\nexcluded. These ports together are believed\naircraft, provide some 200 rail targets for\ncapable of handling about 45,000 tons a day,\nbombing and some 26 water targets for aerial\nor many times the estimated total daily sea-\nmining.\nborne imports of all of Communist China at\npresent. The readjustment of internal distri-\n50. These potential targets can be divided into\nbution necessitated by the blockade of all\nfive general categories, as follows: 9\nother seaports would impose additional strains\na. Rail and water links with the Trans-\non the Chinese Communist railway system but\nSiberian Railway. At present there are only\nthese strains would probably not be critical.\nthree routes by which heavy overland ship-\nWith regard to rail and road capacity out of\nments from the USSR can be brought into\nDairen and Port Arthur, the Port Arthur-\nChina: (1) the rail line from Man-chou-li on\nMukden railway has a present estimated\nthe western border; (2) the rail line from Sui-\ncapacity of about 15,000 tons a day each way,\nfen-ho on the east to the rail net around\nwhile highways from Dairen to Harbin and\nHarbin in central Manchuria; and (3) the\nAntung have estimated capacities of 4,800\nSungari River, which links Harbin with a\ntons each way. Although these combined rail\nTrans-Siberian railway spur on Manchuria's\nand road capacities are far below the rated\nnorthern border. An additional rail line is\ncapacities of the ports themselves, they are\nreported to be in operation from the Trans-\nstill far more than sufficient to handle Com-\nSiberian Railway near Vladivostok into North\nmunist China's present total seaborne im-\nKorea, where it joins the Korean rail net,\nports.\nwhich in turn has a connection at Tu-Men\nwith the Manchurian rail system. In the\nPROBABLE EFFECTS OF BOMBARDMENT\nevent of a naval blockade of the China coast,\nOF LINES OF COMMUNICATIONS\nthese already important routes would obvi-\nIN CONJUNCTION WITH THE BLOCKADE\nously be of critical significance. No alternate\nrail routing is possible over the first 400 miles\nVulnerable Elements of the Chinese\nfrom Man-chou-li to Harbin, while the first\nCommuncations System\njunction point on the Sui-fen-ho - Harbin line\n49. Communist China is heavily dependent on\nis 50 miles from the border.\ncertain critical rail and inland waterways\nb. The rail link between Dairen and Port\nfacilities for the execution of military move-\nArthur and central Manchuria. The rail line\nments and the maintenance of the indus-\nlinking Port Arthur and Dairen with Mukden\ntrialized and cash crop sector of its economy.\nand Harbin would be of critical importance\nThis dependence is less within Manchuria,\nin the event that a naval blockade was estab-\nwhere the existence of a well-integrated and\nlished excluding these ports. Although a sup-\nfairly diversified rail net and of a number of\nplementary road system is available, this road\ngood highways provides some flexibility in\nsystem accounts for less than a quarter of\ntransportation arrangements, and at the\nthe haulage capacity out of these two ports,\nother extreme, in vast areas of rural China,\nnotably in the west, which have such poor\n\" See attached map.\nTOP SECRET\n114\n120\n126\n132\n138\n54\nRAILROADS IN CHINA\nH\nE\nSeptember 1951\nU.\nS.S.R.\n<\nU\nS.S.R.\ncars\nOperable\nInoperable\nw\nUnder construction\nService\n-\nor reconstruction\nA\nN\n-\n48\nH\nS\nI\nN\nLegin\n.\nMajor redair show\nNo.\nInternational boundary\nI\nMinor repair shop\nInternational boundary\nin dispute or indefinite\n48\nCheck materials\nMajor intend waterway\nProvince boundary\nHOKIANO\n-\no\nBASE CHINA 1.6.310,000 CIA No. 11098 September 1949\nN\n-\nSCALE 1:10,000,000\nHar\n5\n©\n100\n200\n100\n402\n500\n600\nMILES\n50\n100\n200\n100\n400\n100\n600\nMILOMETERS\nLIAOP\n-\nSECRET\n96\n102\n108\n3\n-\nSINKLANG\nM\nONGOLIA\nCHAHAR\n42\n42\nII\nDowland\n]\nH\no\nL\nN.O.\nMukden\nK\nA\nN\nS\nU\nN\nKalgen\nhere\nChing\nName\nIII\nSUIYOAN\n7\nProving\nName\n-\nWas'sh\nYear\nP.\nH\nTYPE\nYeles\n36\nIV\nTable\nNMA\nT\nS\nN\nSHANSI\nTelms O\nyou\nFasher\nLinden\nChange\nK\nVI\nH\nA\nN\nTerring\nS\nU\nChi-mime\nPhone\n/\nCheck\n+\nShe\nH\nN\nA\nN\nFinaling\nCharacter\nI\nS\n/\nE\nC\nH\nW\nPuichen\nA\nN\nNanking\nVII\nS\nI\nK\nTd-c\n30\n30\nA\nN\nH\nU\nP\nB\nG\nl'angize\nHankow\nA\nB\nChip\nVIII\nHapachow\nH\nChunghing\nCHEKT\nNO\nKrign\nor\nhave\nChang\n-\nNan\nIII\nLingu\nknow\n7\nSUIYOAN\nTimeslay\nWELL\nNingres\nTitang ing\nIT\n0\nP\nH\nSharchia\nYellow\nhuans\nTal-mitan\nIV\n36\nTyles\nHamps's\nChange\nT\nFine\nS N\nSHANS\nTeleph\n-\nLinden\nCard\nK\nVI\nH\n4\nA\nN\nTransang\nS\nChildren\nCheque\nTurnemal\nH\nI\nFeeds\nling\nChick\nlies,\nH N\nN\nS\n/\nE C H W A\nPu-chm\nN\n*\nNanking\nS\nKumpshal\nVII\n30\nK\nA\nN\nH\nU\nP\nH\nG\n/\nTanglee\nHankow\nVIII\n^\nB\nE\nof\n3\nVIA\nLampating\nChirging\nCHEKI\nNO\nChecks\nTish\nTHE\n-\nChief\nCharge\nTHE\nNativery\nShanging\nH\nU\nN\nKwhith\nCharges\nTurphanne\nBURM\nMain-eu\nChu-che\nIANGSI\n#\nKWEICHOW\nProblems\nHeng-yang\nTexas\nV\nF\nU\nK\nE\nN\nCh\nhow\nTerms\nHanguse\nChildren\nKarris\n24\nHing\nY\nYong-le\nching\n>\nChildren\nR\nw\nA\nCabples\nO\nUn-cheu\n7\nIWAN\nK\nN\nG\nT\nU\nN\nG\nKums\nthat\nCRITICAL LINKS IN THE\n/\nInstal\nCHINESE COMMUNIST\nI\nRAILROAD SYSTEM\nB)U M\nDing Card\nChecker\nknown\nI Connections with Trans-Siberian Railway\nII Port Arthur-Harbin line\nL\nO\nC.\nIII Manchuria-North China link\nS\nIV Te-hslen-Tsinan link (includes Yellow\nRiver bridge north of Tsinan)\nVIETN\nV Chu-chou-Hang-yang link\nHAINAN\nVI Yellow River bridge near Cheng-hsien\n18\n18\nPala\nNA\nVII Railroad ferry at Pu-chen-Nanking\nSaniya\nVIII Yangtze River crossing at Wuch'ang\nTHAILAND\n108\n114\n120\n126\n102\n12335 CIA, 5.52\nSECRET\nSECUDITY INFORMATION\nTOP SECRET\n12\nall of which would be required to compensate\nPotentialities and Difficulties of a\nfor the blockade of other Chinese seaports.\nNo alternate rail routes are available for the\nBombing Campaign\nfirst 150 miles from the terminus at Port\n51. In the event of a sea blockade of the China\nArthur.\ncoast including Port Arthur and Dairen, effec-\nc. The rail link between Manchuria and\ntive interdiction of even part of this target\nNorth China. All rail traffic between Man-\nsystem would have an extremely serious effect\nchuria and the rest of China must travel over\non Communist China's military and economic\na 275-mile stretch of coastal trackage between\npotential. It is probable that a prolonged dis-\nChin-chou and Tientsin. Effective interdic-\nruption of the main routes of entry from the\ntion of this route would sever the only heavy-\nUSSR into Manchuria would critically reduce\nduty transportation link between Manchuria\nChinese Communist offensive capabilities in\nand the rest of China.\nKorea and seriously reduce their defensive\ncapabilities in Korea, even though some sup-\nd. The Chu-chou-Heng-yang rail link in\nplies could be sent from the USSR directly\nSouth China. All rail traffic into south China\ninto North Korea. Interdiction of the key\nfrom the rest of the country must pass over\nChu-chou-Heng-yang rail link into south\na 75-mile stretch of railroad between Chu-\nChina would gravely handicap military oper-\nchou and Heng-yang. Effective interdiction\nations in Southeast Asia. Effective, sustained\nof this stretch would not only sever the major\nattacks on the vital rail link between Man-\ninland transport route between Canton and\nchuria and China proper, coupled with at-\ncentral and northern China but would also\ntacks on selected targets within central China\ncut the only rail line which would permit the\nwould put severe pressures on the Chinese\nmovement of supplies from north and central\neconomy. Taken together, effective and sus-\nChina in support of the Viet Minh forces in\ntained interdiction of all these routes would\nIndochina.\nprogressively undermine Communist China to\ne. Rail and water targets in central China.\na point where its military capabilities would\nbe critically reduced and the difficulties of\nThere are a number of important rail and\nwater transport targets in central China. A\nmaintaining the regime's economic and politi-\ncal controls would be aggravated.\n70-mile stretch of trackage between Ta-Hsien\nand Chinan, including an important raii\n52. Actual achievement of such results, how-\nbridge over the Yellow River, is used by east-\never, would involve serious difficulties. Com-\nwest traffic as well as by the main coastal\nmunist China already possesses a substantial\nrailway. Other rail targets include the Yel-\nair defense potential, particularly against\nlow River bridge north of Cheng-hsien on the\nthe type of operations which would be re-\nPeiping-Hankow-Kowloon route, the Pu-chen-\nquired for a program of the scope and nature\nNanking railroad ferry on the Peiping-Shang-\ndiscussed above. In addition, the USSR\nhai route, and the Yangtze River ferry cross-\ncould bolster Chinese Communist air defenses\ning at Wu-chang. The most important water-\nin a very short time by committing Soviet\nway targets are along the Yangtze and Hsi\nair units which could operate ostensibly as\n(West) Rivers, which together with the Sun-\nan integral part of the Chinese Communist\ngari River in Manchuria are estimated to\nAir Force. Therefore, either prior to or on\ncarry three-quarters of the 25 to 35 million\nthe initiation of a large-scale interdiction\ntons of cargo carried annually on Chinese\ncampaign it undoubtedly would be necessary\nwaterways. Although these targets are not\nfor the US/UN Air Forces to direct a large-\nscale air campaign against Chinese Commu-\nindividually as important as those noted pre-\nnist air defenses. Even if these air defenses\nviously, their effective interdiction would\nwere reduced to relative impotency, it would\nplace a heavy strain on an already overloaded\nbe necessary to continue heavy attacks on\ntransportation system, with serious economic\nair bases to prevent reinforcement by the\nand possible military results.\nUSSR.\nTOP SECRET\nTOP SECRET\n13\n53. In addition to the necessity for an air\nading forces might also be subject to attack\ncampaign against the enemy air defenses,\nby the Chinese Communist Air Force. How-\na successful interdiction of Communist Chi-\never, the Kremlin would make its decision\nnese lines of communications would require\nwith regard to the blockade in the light of\na very large-scale and long-sustained bomb-\nthe global policy of the USSR, and probably\ning effort. On account of the relative rapid-\nwould not make a determined effort to break\nity with which rail targets can be repaired,\nthe blockade unless the USSR was prepared\ncontinuing attacks would be needed to effect\nto accept a major extension of hostilities\nanything more than a temporary delay. The\nwith greatly increased likelihood of general\neffectiveness of the mining of inland water-\nwar.\nways would be seriously limited by the fact\nthat most of the traffic is carried in small\n56. Imposition of a naval blockade, by re-\nshallow draft wooden vessels.\nstricting Chinese Communist imports to\nthose which could be brought in over the al-\nPROBABLE COMMUNIST REACTION TO THE\nready heavily burdened overland routes from\nIMPLEMENTATION OF THESE MEASURES\nthe USSR, would undoubtedly place a con-\nsiderable burden on Communist China but\nComplete Embargo\nwould not necessarily impose any significant\n54. Over the short run, a complete embargo\nrestraints on Chinese Communist military\non non-Communist trade with Communist\noperations. A blockade might result in some\nChina would probably have no significant\ninterference with military shipments and\neffect on Communist China's military capa-\nmight discourage the Chinese Communists\nbilities and only limited effects on its civil-\nfrom undertaking new military operations\nian economy. Such an embargo would there-\nwith high logistical requirements, while de-\nfore probably have little or no influence,\nployment of the blockading force along the\neither as a deterrent or a stimulant, on Chi-\nChinese coast would incidentally provide a\nnese Communist military policies with re-\nfurther deterrent to a Chinese Communist\nspect to Korea, Taiwan, and Southeast Asia.\ninvasion of Taiwan. On the other hand, im-\nThe Chinese Communists might, however,\nposition of a blockade would cause the Com-\nretaliate by seizing Hong Kong and Macao,\nmunists to reappraise Western intentions\nsince the advantages afforded to the Peiping\nand might possibly impel them to accept new\nregime by the present status of those ports\nrisks in Korea, Indochina, or elsewhere.\nwould be virtually ended by imposition of a\ntotal embargo. They would probably rec-\nAir Bombardment of Lines\nognize, however, that such actions would en-\nof Communications\ntail risks of expanded hostilities and that the\ncontinued existence of these colonies might\n57. It would extremely difficult, if not im-\ninduce influential British and Portuguese\npossible, to limit air bombardment of Com-\ninterests to seek a relaxation of the embargo.\nmunist China solely to attacks on lines of\ncommunications, since such action would\nNaval Blockade\nnecessarily involve air operations against all\n55. A naval blockade of Communist China\nelements of the Chinese Communist air\nwould be a blow to the prestige of the Soviet\ndefense system. The Chinese Communists\nBloc, particularly if the blockade included\ncould be expected to react by making a max-\nPort Arthur and Dairen, since the USSR has\nimum air defensive effort which might in-\nspecial rights in these ports. The USSR\nclude air attacks against US/UN bases and\nmight react to a naval blockade by attempt-\naircraft carriers. (Thus, the existing limited\ning to bring merchant ships into Port Arthur\nair operations between the US and the Far\nand Dairen under Soviet naval escort, by\nEastern Communist Air Forces, now confined\nattempting to force the blockade at other\nto Korea, would be considerably expanded\npoints, or by waging mine and submarine\ngeographically, increased in size and in in-\nwarfare against the blockading forces. Block-\ntensity, and broadened in concept.) Because\nTOP SECRET\nTOP SECRET\n14\nof the USSR's interest in preserving the sta-\nof the Communist Air Force in China. In\nbility of Communist China and in line with\nthis event, there would be a considerable ex-\nthe commitments which the USSR has al-\npansion in the geographical scope, scale, and\nmost certainly made to the Peiping regime,\nintensity of the de facto air war between the\nSoviet air units would probably participate\nUS and the USSR which we have grave rea-\nin the air defense effort ostensibly as a part\nson to believe already exists in Korea.\nTOP SECRET\n,\nTOP SECRET\n15\nANNEX A\nSELECTED TABULAR DATA\nTABLE 1\nChinese Communist Imports from Non-Communist\nCountries, 1951 1\n(in millions of US dollars)\nCOUNTRIES\nEurope and Western\nHemisphere\nJAN.-JUNE\nJULY-DEC.\nTOTAL\nCanada\n.1\n.1\nUS\n2.9\n2.9\nUK\n7.4\n2.8\n10.2\nFrance\n2.2\n.5\n2.7\nBelgium-Lux.\n9.3\n6.2\n15.5\nSwitzerland\n5.2\n4.0\n9.2\nWest Germany\n9.6\n.3\n9.9\nItaly\n1.2\n.1\n1.3\nNetherlands\n.3\n.1\n.4\nSweden\n.9\n.7\n1.6\nNorway\n.5\n.3\n.8\nAdjustment for C.I.F. 4.0\n1.5\n5.5\n(cost, insurance,\nand freight)\n(10 percent)\nSubtotal\n43.6\n16.5\n60.1\nCOUNTRIES\nNear East, Asia,\nOceania\nEgypt\n3.4\n.6\n4.0\nIndia\n6.3\n6.0\n12.3\nPakistan\n22.8\n12.7\n35.5\nJapan\n5.1\n.8\n5.9\nMalaya\n40.9\n.6\n41.5\nAustralia\n1.0\n.3\n1.3\nCeylon\n7.8\n7.8\nPhilippines\n.5\n.1\n.6\nHong Kong\n187.8\n68.7\n256.5\nMacao\n21.1\n14.8\n35.9\nAdjustment for\n14.5\n5.6\n20.1\nC.I.F. (5 percent)\nSubtotal\n303.4\n118.0\n421.4\nTOTAL\n347.0\n134.5\n481.5\nAdd 10 percent for all 34.7\n13.5\n48.2\nother including\nsmuggling\nGRAND TOTAL\n381.7\n148.0\n529.7\n3.3(b)(1)\nTOP SECRET\nTOP SECRET\n16\nTABLE II\nTABLE III\nSUMMARY OF HONG KONG'S EXPORTS (BY\nESTIMATED CHINESE COMMUNIST IMPORTS\nVALUE) TO COMMUNIST CHINA, 1951\nFROM THE NON-SOVIET BLOC IN 1952 ASSUMING\n(millions of US $\nA CONTINUATION OF CURRENT CONTROLS\nCommodity Group\nJan.-\nJuly-\nOct.-\nTotal\nVolume\nValue\nJune\nSept.\nDec.\n1951\nCIF Price\n(metric\n(US $\nFood. feed, bever-\n3.1\n1.2\n0.4\n4.7\nItem\nmetric ton\ntons)\nmillion)\nages & tobacco\nRaw cotton\n$1,667\n30,000\n$50\nChemicals (in-\n27.7\n10.9\n5.9\n44.5\nCrude rubber\n1,200\n10,000\n12\ncluding pharma-\nIron & steel\n300\n30,000\n9\nceuticals)\nMachinery, metal\n400\n35,000\n14\nDyeing, tanning\n16.2\n5.2\n1.4\n22.7\nmfrs.\n& coloring sub-\nAmmonium sulfate\n150\n60,000\n9\nstances\nIndustrial chemicals\n800\n20,000\n16\nFertilizers\n4.1\n1.9\n2.0\n8.0\nDyes\n1,500\n10,000\n15\nRubber & its man-\n55.3\n55.3\nPharmaceuticals\n3,000\n6,000\n18\nufactures\nPaper\n200\n75,000\n15\nPulp & paper\n5.0\n5.3\n3.2\n13.5\nSugar\n200\n75,000\n15\nTextile raw mate-\n2.6\n1.1\n0.8\n4.5\nGunny bags\n400\n30,000\n12\nrials, yarns &\nCotton cloth\n2,500\n12,000\n30\nthreads\nOther\n102,000\n64\nTextiles (exclud-\n6.8\n4.7\n7.3\n18.8\nTotal, legitimate\n450,000\n270\ning clothing)\nFootwear\n1.9\nSmuggled\n1.9\n50,000\n30\nProducts for heat-\n1.0\n0.1\n1.2\nGRAND TOTAL\n500,000\n300\ning, lighting &\npower\nthirds in 1951) of such imports, its export statis-\nNon-metallic min-\n1.7\n0.5\n0.3\n2.5\nties, to a considerable extent, provide an account\nerals & their\nof them. If a similar table could be constructed\nmanufactures\nfor Communist China's imports from all non-\nIron & steel\n28.8\n0.9\n0.1\n29.8\nCommunist countries, the relative importance of\nNon-ferrous base\n2.1\n2.1\nthe various commodity categories would differ\nmetals\nmarkedly from Hong Kong's exports in only a\nManufactures of\n4.5\n1.6\n0.5\n6.6\nfew respects: (1) Direct shipments to Chinese\nnon-ferrous\nports of raw cotton from Pakistan and gunny\nbase metals\nbags from India would increase the annual total\nMachinery & appa-\n6.3\n3.4\n1.7\n11.4\nfor textile raw materials by approximately US\nratus other than\n$37 million and that for textiles by about US $13\nelectrical\nmillion; (2) Direct imports of rubber from\nElectrical machin-\n4.9\n0.8\n0.3\n6.0\nMalaya, all during the first half of the year,\nery & apparatus\nwould add roughly US $43 million to total rubber\nVehicles & trans-\n6.6\n0.2\n6.8\nimports; (3) The relative importance of chemi-\nport equipment\ncals, metals, and metal manufactures would be\nMiscellaneous $\n9.0\n4.3\n2.7\n16.1\nsomewhat greater than in Table II, as a conse-\nquence of the fact that Western European export\nTOTAL\n187.8\n42.0\n26.6\n256.5\ncontrols on these categories are generally less\nstringent than those of Hong Kong.\n3.3(b)(1)\npage 17. It is not possible, owing to the incom-\n: Currency conversions have been made at average\npleteness and lack of uniformity of the export\nmarket rates of exchange. Minor discrepancies\nstatistics published by the various countries con-\nin addition are due to rounding.\ncerned, to compile a detailed table of Communist\nChina's imports from non-Communist countries\n3 Includes some items more properly attributable\nby commodities and by countries of origin; but\nto one of the specific categories above, but the\nas Hong Kong provided a large part (about two-\nnecessary details are not readily calculable.\nTOP SECRET\nTOP SECRET\n17\nANNEX B\nTHE SHORT-RUN EFFECTS ON SPECIFIC COM-\nimports of rubber. In any event, the Bloc\nMODITIES OF A TOTAL EMBARGO OF ALL\ncannot be expected to supply much rubber\nIMPORTS FROM ALL NON-SOVIET COUNTRIES\nto Communist China. Like Communist\nNOTE: This annex briefly considers the Bloc's abil-\nChina, the other Bloc countries must import\nity and willingness to replace the imports\nall the crude natural rubber they consume.\nwhich Communist China would lose as the\nMoreover, crude natural rubber has a much\nresult of a total embargo by non-Bloc coun-\nhigher strategic value in the rest of the Bloc\ntries. It is assumed in this discussion that\nthan in Communist China, where the rubber\nsuch an embargo would be set up SO as to\nfabricating industry produces primarily foot-\nprevent increased transshipment via the\nBloc of commodities originating in non-\nwear and rickshaw tires. Hence, Communist\nCommunist countries. These estimates are\nChina's rubber industry would almost certain-\nbased upon sketchy information, sketchy\nly be sharply curtailed whenever current\nboth for Communist China and for the rest\ndomestic stocks were depleted.\nof the Bloc. The reliability of the individ-\nual estimates is therefore not high. Never-\ntheless, the annex probably gives a reason-\nMinerals, Metals, Machinery, and\nably accurate general picture of the Bloc's\nOther Metal Manufactures\nsupply position with regard to these com-\nmodities.\n3. Western export controls have already great-\nly reduced the amounts of minerals, metals,\nRaw Cotton and Cotton Cloth\nmachinery, and metal manufactures which\n1. Under present controls Communist China's\nCommunist China can import. Imports from\nimports of raw cotton and cotton cloth during\nnon-Bloc countries under present controls are\n1952 are projected at about 30,000 metric tons\nprojected at $23 million in 1952. Although\n(valued at US $50 million) and 12,000 metric\nthe Bloc could eventually replace most of\ntons (US $30 million), respectively. Because\nthese commodities, there are certain specific\nof cotton shortages in the Bloc, the Soviets\nitems which could not be supplied in the short\nwould probably be reluctant to supply more\nrun and others which would involve prohibi-\nthan a small portion of Communist China's\ntive costs. The existing stock of capital goods\nimport requirements for raw cotton or cotton\nis almost entirely of American, British, and\nproducts. The present cotton shortage in\nJapanese design. It would be extremely dif-\nChina would thus be aggravated. However,\nficult to obtain replacement components from\nstrenuous efforts (even, it is believed, at the\nBloc sources for existing machinery and other\nmetal manufactures, such as motor-vehicle\nexpense of food crops) have already been\nundertaken to overcome the shortage. These\nparts, machine-tool components, textile and\nflour-mill equipment, railroad locomotives and\nefforts have already produced results, and it\nis likely that within a few years self-sufficiency\ncars, bearings of all types, and copper\nproducts.\nin cotton will be achieved.\nCrude Rubber\nFertilizers (Ammonium Sulfate)\n2. Communist China's situation with respect\n4. All ammonium sulfate currently imported\nto imports of crude rubber is unclear. In\nby Communist China comes from non-Bloc\n1950 and in the first half of 1951, imports of\nsources. These imports are projected at 60,-\nrubber were several times the highest possible\n000 metric tons (US $9 million) for 1952. The\nconsumption rate. While a considerable pro-\nUSSR and East Germany are exporters of am-\nportion of these purchases was probably for\nmonium sulfate and could replace non-Bloc\ntransshipment to the USSR, accumulated\nsources. However, ammonium sulfate is a\nstocks in Communist China may be high. If\nlow-priority, bulk item which the Bloc might\nso, Communist China can temporarily forego\nnot deliver if shipping space were scarce.\nTOP SECRET\nTOP SECRET\n18\nIndustrial Chemicals (including dyes)\nd. There is a wide variety of miscellaneous\n5. Imports of industrial chemicals from non-\nindustrial chemicals consumed in Communist\nBloc sources for 1952 are projected at 20,000\nChina which, because the Bloc's supply is low,\nmetric tons of industrial chemicals (US $16\nwould not be replaced in full in the event of a\nmillion) and 10,000 metric tons of dyestuffs\nWestern embargo. These include such items\n(US $15 million). These imports of indus-\nas paints and pigments, chlorates, bichro-\ntrial chemicals, although small in value and\nmates, bleachery powder, and cyanides.\nvolume, comprise a wide variety of products.\nIf they were cut off, the Bloc would probably\nPaper\nreplace most of them. Specifically:\n6. Communist China's imports of paper are\na. Chinese demands for rubber chemicals\nprojected at 75,000 metric tons (US $15\nare quite small and probably would be met to\nmillion) for 1952. Paper is one of the major\nthe extent necessary to maintain production.\nexports of the Soviet Bloc and Communist\nb. Although the supply of caustic soda, soda\nChina's demand could easily be met so far as\nash, and certain organic products is tight in\navailability in the Bloc is concerned. How-\nthe Soviet Bloc, the Bloc would probably sup-\never, paper is a bulk item on which shipments\nply China's needs for military purposes and\nmight be reduced or withheld during a period\nmight supply China's small civilian needs as\nof transport stringency.\nwell.\nc. Communist China uses substantial quan-\nGunny Bags\ntities of dyestuffs and textile chemicals, in-\n7. Communist China's imports of gunny bags\ncluding aniline oil, dinitrochlorobenzene,\nfrom non-Bloc countries are projected at 30,-\ndinitrotoluene, nitrobenzene, and sodium hy-\n000 metric tons (US $12 million) for 1952.\ndrosulfite. Uses include textile dyeing and\nIf Communist China were denied access to\nthe manufacture of explosives. For the\nthese sources, it is improbable that the rest\nformer use the Bloc would probably supply\nof the Bloc, which is dependent on external\nthe necessary chemicals; for the latter it\nsources for gunny bags, would make up for\nwould probably prefer to supply finished ex-\nthe loss. It is probable, however, that Com-\nplosives rather than to supply the necessary\nchemicals.\nmunist China could make use of domestically\nproduced substitutes.\nTOP SECRET"
}