CURRENT INTELLIGENCE BULLETIN - 1951/08/19

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02739456
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: April 15, 2019
• Document Release Date: April 22, 2019
• Publication Date: August 19, 1951

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CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO
NO CHANGE IN CLASS.
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CLASS. CHANGED TO TS
NEXT REVIEW DATE: 8 c 20of
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AUT � lin 7 - 42ge
DAT EVIEWER
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
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1, Peiping's Foreign Office reaffirms position on Japariose peace treaty
page 3).
2. French Foreign Office takes pessimistic view of Far Eastern situation
(page 3).
FAR EAST
Communist threat to Indochina seen unabated (page 4
NEAR EAST
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EASTERN EUROPE
7. Tito presses for US aid (page 7).
WESTERN EUROPE
8. French doubtful of ability to contain inflation and maintain rearmament
Program' (page 8).
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GENEPAL
fice reaffirms position on Japanese peace treaty:
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The Netherlands Charge in Peiping informed his
government on 16 August that he had been called
.to the Ministry of Foreign Affairs to receive a
copy of Premier Chou En-lai's 15 August state-.
peace treaty. The ministry's spokesman emphasized
to the charge the importance of the concluding paragraphs of Chou's statement.
Comment: The last three paragraphs of the Chou
statement declare that, if Communist China does not participate in the "prepa-
ration, drafting and signing" of a Japanese peace treaty, Peiping will con-
sider the treaty "illegal" and "null and void. " These paragraphs also ex-
press agreement with the Soviet position that a peace treaty conference should
Include all the states whose armed forces were in conflict with Japan in
World War II, and affirm that Peiping is prepared to "exchange views" on a
japanese peace treaty with all such states.
Chou's speech suggests the possibility that,
after the San Francisco conference, Moscow and Peiping will call a separate
conference of the Soviet bloc and those nations that di) not sign the US-UK
draft treaty at San Francisco.
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2. French Foreign Office takes pessimistic view of Far Eastern situation:
In recent talks with French Foreign Office offi-
cials, US Embassy representatives have dis-
covered "little optimism" with regard to the
Kaesong armistice negotiations and much "des-
pera. e cast ng around" for a solution in Indochina. While the French atti-
tude toward recognition of the Chinese Communist regime and its admission
Into the UN has notchanged, considerablepolitical pressure'is'Inilldim up for
negotiations loolang ta a settlement of all Far Eastern questions in the
event of a successful outcome of the Ka,esong talks. Foreign Office officials,
however, view these talks as part of the Soviet peace offensive and expect
them to be broken off once the ,USSli has achieved maximum propaganda
advantage.
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The Foreign Office is particularly gloomy about
the situation in Indochina, "where France continues to pour out men and
money" with no end in sight. There is some feeling that the US position on
Formosa blocks the possibility of a general political settlement in the Far
East and that the French Government has nothing to offer the Chinese Com-
munists in return for a guarantee.against intervention in Indochina.
Comment The weakness of the new French
Government, resentment against the inflexibility of US policies aimed at
containing the USSR, and fear of worsening internal economic conditions re-
sulting from increasing inflationary pressures form a background to the
pessimism of the Foreign Office,
FAR EAST
Communist threat to Indochina seen unabated;
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Despite the present lull in hostilities in Indochina,
the US Legation in Saigon warns that a prudent
estimate of the situation would indicate that the
Viet Minh, with the close cooperation of Com-
munist China, is preparing for a major effort. In support of this view, the
legation cites several current reports indicating increased Chinese Com-
munist interest in Viet Minh fortunes, as well as the Peiping propaganda
charge that 35, 000 Chinese Nationalist internees in Indochina have been
equipped and trained and are now poised on the border for an invasion of
South China.
Comment: The rainy season in the Tonkin delta
area., which will continue through September, accounts for the present lull
in hostilities. Despite heavy losses suffered by the Viet Minh earlier this
year and a few ambiguous Communist references to a negotiated peace in
Indochina, available evidence supports the US Legation's estimate.
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NEAR EAS.T
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EASTERN EUROPE
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In an interview with US Senator Blair Moody at
Brioni an 12 August, Marshal Tito emphasized
the following points to substantiate his request
for immediate US aid:
a) Although the USSR is not yet ready for war,
it will not wait until the West reaches its peak of preparedness in 1954. The
critical period will be 1952. The US should build up armament production
centers near danger points rather than in the US and other areas "far re-
moved from the likely scene of conflict. "
b) A primary Soviet aim is to bring about the
internal collapse of the Yugoslav regime. A secondary aim is to maintain
tension between Yugoslavia and the Satellites. Satellite-provokedbarder in-
cidents to accomplish these objectives have increased greatly during the past two
months. These incidents could "get out of control" at any time and develop
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into war. Prompt US military aid to Yugoslavia would reduce this possibi-
lity.
c) Titoism will increase in the Satellites in pro-
portion to the deterioration in the Satellite standard of living as compared
with that of Yugoslavia. Any weakening of Yugoslavia's standard of living
will adversely affect the progress of Titoism in the Satellites.
Comment: The interview was apparently
designed to stress the points that would be effective in secun speedy aid
for Yugoslavia without committing Tito to any definite action.
WESTERN EUROPE
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French dOubtful of ability to contain inflation and maintain rearmament
program:
Because of their rapidly deteriorating dollar
reserve, the French have become concerned
about proceeding with the expanded import policy
on which former Finance Minister Petsche based
his anti-inflation program. Although Cabinet views differ on the subject,
the government will probably use available reserves to continue an expanded
level of imports and to maintain the present level of military effort, until
new US-French talks can be held to reassess US aid for French rearmament.
Comment; The French dollar trade balance,
although better than a year ago� is still quite unfavorable to France, More-
over, the French position will probably be aggravated in 1952 due to an ex-
pected drop in current abnormally high steel and sugar exports. The French
expectation of financing an expanded import program was based on a mis-
understanding of the extent of US commitments undertaken in the October
1950 talks on US aid. Both gCA and Paris Embassy officials have frequently
stressed the urgency of additional support if France is to carry out its
military commitments.
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