CURRENT INTELLIGENCE BULLETIN - 1955/05/26

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03194457
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 16
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: May 26, 1955

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W71:34/0 4(
26 May 1955
Copy No. 9.4
CURRENT INTELLIGENCE BULLETIN
DOCUMEN NO. 43
NO CHANGE IN CLASS.
1.1 DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: 20/0
AUTH: HR 70-2
DATE:,�9/ilea REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
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SUMMARY
FAR EAST
1. Japan denies intent to withdraw from GATT negotiations (page 3).
SOUTH ASIA
2. Afghan defense minister says mobilization has been abandoned
(page 3).
NEAR EAST - AFRICA
3.
WESTERN EUROPE
4. Conservatives seen winning British election by narrow margin
(page 6).
5.
* * * *
Comment on establishment of Soviet State Committee of Labor
and Wages (page 7),
26 May 55
THE FORMOSA STRAITS
(page 9)
* * * *
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FAR EAST
1. Japan denies intent to withdraw from GATT negotiations:
An official of the Japanese Foreign
Ministry has stated categorically that
Japan has no intention of withdrawing
from negotiations now being conducted
as a preliminary to Japan's accession to the General Agreement
on Tariffs and Trade (GATT).
The American embassy in Tokyo re-
ports, however, that Japan is concerned and probably resentful
over the large number of countries which may invoke Article 35,
which could deny most-favored-nation treatment to Japan.
Comment: An earlier report reaching
the embassy stated that Japan was planning to abandon its efforts
to join GATT because of domestic opposition to tariff cuts and be-
cause of the large number of nations planning to invoke Article 35
of the agreement.
Japan appears to be assured of the
necessary 23 votes for full membership.
SOUTH ASIA
2. Afghan defense minister says mobilization has been abandoned:
Afghan defense minister Mohammad Arif
stated on 23 May that Afghan troop mobil-
zatton had been abandoned.
Comment: If troops called to active duty
since 4 May are actually being disbanded, it would be an admis-
sion of Afghan inability to maintain a strong front against Pakistan
for any appreciable length of time and would materially weaken
Kabul's international position. It would also further weaken con-
fidence in Daud, since as prime minister and as a former war
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minister he should have been able to estimate more accurately
his country's ability to withstand the strain of mobilization�es-
pecially when mobilization is used as a political weapon.
There have been several reports that
the Afghan administration and economy were disrupted by the re-
tention of conscripts on active duty.
NEAR EAST - AFRICA
26 May 55 CURRENT INTELLIGENCE BULLETIN Page 4
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WESTERN EUROPE.
4. Conservatives seen winning British election by narrow margin:
5.
The consensus in Britain is that the Con-
servative Party will win the general
elections on 26 May with about the same
majority it now holds or with a slight
increase.
According to the American embassy in
London, this estimate is based on the belief that few voters have
switched from their 1951 choices, that any Conservative gains re-
sulting from the redistribution of seats may be balanced by losses
caused by incursions of the Liberal Party, and that Labor absten-
tions due to apathy may be canceled out by Conservative abstentions
resulting from overconfidence.
Comment: A Gallup poll published on
24 May gives the Conservatives a:4-percent lead over Labor, but
also shows 12.5 percent of the people in the "don't know" column.
Judging from past elections, more than half of the "uncommitted"
votes will go Labor. Professional pollsters generally estimate
the Conservatives' actual lead at only 1.5 percent, a margin which
could give them a majority of between 30 and 35 seats.
26 May 55
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* * * *
6. Comment on establishment of Soviet State Committee of Labor
and Wages:
On 24 May the USSR created under
L. M. Kaganovich, one of the top Soviet
leaders and long the foremost industrial
trouble shooter within the Soviet hierarchy, a state committee on
labor and wages. Kaganovich's appointment underscores the
urgency with which Soviet leaders view the labor situation.
There has been a progressive worsening
of the Soviet labor situation since at least the advent of the Fifth
Five-Year Plan. The deterioration of the labor program has
taken the following apparent form: consecutive overfulfillment
of the rate of entry into the labor force; chronic overexpenditure
of the wage fund; until 1954, annual declines in rate of increase
in labor productivity; and failure to undertake prompt revision
of wage and output norms in the presence of major changes in
technology.
More than anything else, the creation of
the Kaganovich committee represents an effort to improve labor
productivity through direct rationalization of the labor force struc-
ture as opposed to 1953 plan revisions which were aimed at im-
proving productivity by indirect incentive measures.
This rationalization may well have the
effect of providing still another anti-inflationary measure.
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TOP-SECRE-T
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WEEKLY SUMMARY
(19-25 May 1955)
THE FORMOSA STRAITS
Report of the IAC Current Intelligence Group
for the Formosa Straits Problem
1. There was no significant air or ground combat activity.
Chinese Communist military training continued and construction
at the five airfields along the East China coast has proceeded.
Communist naval operations near the offshore islands
have been negligible. Increased sightings of lightly armed coastal
patrol craft (YP) in waters between the Foochow area and the
Choushan Islands to the north, however, suggest that there may be
a build-up of these smaller craft in the area north of the Matsus.
2. Estimates based on comparative photography and infor-
mation concerning recent construction of other Chinese Communist
airfields indicate that the airfield at Nantai, near Foochow, may be
completed early in June. A runway at Swatow Northeast is expected
to be completed by 15 June. Runways at Lungtien, Chingyang and
Lungehi are expected to be completed in July and August. These
estimates are concerned with runway construction only and do not
include such items as POL, hangars and other facilities which, ac-
cording to US standards, to go make up a fully operational military
airfield.
Use of.the coastal airfields would permit the simultaneous iauncn-
ing of larger numbers of fighters, greater endurance over target
areas in Formosa, and lower altitude jet fighter operations.
BEAST (IL-10) piston attack bombers operating from the new
coastal airfields would be able to attack some targets on the west
coast of Formosa. BEASTS operating from present Chinese Com-
munist bases cannot carry out attacks against Formosa. (SECRET)
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3. The Chinese Nationalists are preparing six light field
artillery battalions, a medium field artillery battalion and an ad-
ditional battery of 155-mm, guns for shipment from Formosa to
the Quemoy Islands during June. This will bring the artillery
units of the five divisions there to full strength and increase the
artillery there from the present 171 pieces fo 259 pieces.
4. There has been no further clarification of the Chinese
Communist position on negotiations with the United States.
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ANNEX
Following is a summary of significant Chinese Communist
military developments affecting the Formosa Straits area during
the period 22 April - 25 May 1955.
Ground:
Ground combat activity has continued to be slight and in-
significant in the area opposite Nationalist-held territory. The
only known addition to Chinese Communist strength in that area
is the recently accepted 65th AAA Division. Although this unit
probably has been there for some time, it has only recently been
identified in the Foochow area. The expected appearance of Com-
munist artillery on the Peiling Peninsula opposite Matsu has been
confirmed by some shelling of Nationalist vessels in the area as
well as one instance of shelling received by the Nationalists on
one of the Matsu Islands. Interpretation of aerial photography has
shown 12 to 16 artillery pieces in this area.
Air:
the ath Air. Division, equipped with BUTCHER (IL-28) jet light
bombers, into the Hangchow area, has been completed. BUTCH-
ERS operating from Hangchow would be capable of carrying out
both high- and low-level operations against targets in Okinawa,
Formosa, Quemoy and the Matsus. While the actual estimated
division strength is approximately 65 BUTCHERS, only 39 have
been seen on Hangchow airfield at onetime.
There are indications that Chinese Communist jet light
bomber strength has been substantially increased. As of 25 May,
45 BUTCHERS had been flown into Tsitsihar from the Soviet Union.
At least 22 of these aircraft were subsequently transferred to the
Chinese Communist naval air force base at Chiaohsien. In addi-
tion to these aircraft, there is evidence that possibly as many as
84 BUTCHERS may have been turned over to the Chinese Commu-
nist air units in the Port Arthur-Dairen area. Also, there are
fairly firm indications that the Chinese Communists were operating
at least some aircraft in the Port Arthur area. Although the extent
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of these aircraft transfers cannot be ascertained, acquisition of
all the jet light bombers now at Tsitsihar, and also those believed
to be in the Port Arthur/Dairen area, would increase the Chinese
Communist air force strength from an estimated 145 in March to
approximately 275.
Daily fighter coastal patrols apparently were initiated by
the Chinese Communists and were believed to be operating from
the bases at Chuhsien and Luchiao. In the period 12 to 18 May,
three encounters were reported between Nationalist and Commu-
nist aircraft in the area 20 to 50 miles north of the ivlatsus. Al-
though firing occurred, no damage to aircraft on either side was
reported. Otherwise, Communist air activity in the Straits was
nearly nonexistent.
Navy:
Chinese Communist submarine strength has been increased
from five to seven submarines. The two additions, first observed
in March 1955, are both Soviet long-range types. The five boats
previously accepted were two long-range types and three short-
range types; one of the latter is believed nonoperational. These
seven boats, representing transfers from the Soviets, are based
at Tsingtao and are believed manned by Chinese crews. The six
operational boats have the capability of conducting limited war
patrols.
The presence of a Communist PT unit of three to five boats
in the Matsu area has been indicated by the sighting of this type
craft there three times during the past month. This would be a
logical Chinese Communist reaction to the Nationalist interdiction
patrol north of the Matsus.
Logistics and Transportation:
A preliminary interpretation of air photographs on 19 May
covering Foochow and its hinterland indicates that the supply build-'
up in the Nantai-Foochow area continues; backwaters were filled
with barges and many supply compounds were noted near the Min
river.
Other photography has disclosed Chinese Communist efforts
to improve supply, routes in Fukien Province. The major inland
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roads to Foochow and Amoy have been widened and regraded,
and several bridges have been constructed to replace ferries.
In late April, the first evidence of preliminary work on
a rail line in Fukien was observed. �A right of way in central
Fukien, approaching Amoy, has apparently been cleared. None
of the Fukien rail construction is expected to be completed be-
fore 1956.
The coastal road running north from Foochow has been
improved as far north as Loyuan, 30 miles from Foochow. This
road will provide access to the Santu and Loyuan Bays, both of
which could be used as staging areas for an attack on the Matsus,
and as terminals for goods shipped from the north and destined
for Foochow.
The Communists have initiated merchant shipping runs
from Ningpo to Wenchow. This represents a 200-miles southward
extension of regularly scheduled shipping. This shipping could be
significant in supplying military installations along the eastern
coast.
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