REORGANIZATION OF COMMUNIST CHINA'S ECONOMIC MINISTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61S00527A000200120031-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 16, 2016
• Document Release Date: March 21, 2005
• Sequence Number: 31
• Publication Date: March 14, 1958
• Content Type: REPORT

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CSM No. 565
73
Copy No. -
14 March 1958
CURRENT SUPPORT MEMORANDUM
REORGANIZATION OF COMMUNIST CHINA'S ECONOMIC MINISTRIES
OFFICE OF RESEARCH AND REPORTS
CENTRAL INTELLIGENCE AGENCY
This report represents the immediate views of the
originating intelligence components of the Office
of Research and Reports. Comments are solicited.
This document contains information affecting the national defense of
the United States, within the meaning of the espionage laws, Title 18
USC, Sections 793 and 794, the transmission or revelation of which
in any manner to an unauthorized person is prohibited by law.
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REORGANIZATION OF COMMUNIST CHINA'S ECONOMIC MINISTRIES
The Chinese State Council on 11 February 1958 announced a reor-
ganization which abolishes seven ministries and one commission in the
governmental economic control structure. 1/ The current changes rep-
resent the fourth major reshuffling of administrative organization in
Communist China since the regime was established in late 1949. Every
other year new ministries and commissions have been added to the or-
ganizational structure of the State Council by breaking up existing
ministries into more specialized ones. This proliferation of organi-
zations has been particularly noteworthy in the industrial segments of
the economy.
Compared with previous reorganizations, the current changes ap-
pear to represent a consolidation and retrenchment of administration
rather than the proliferation and specialization which characterized
the previous reorganizations. After a period of eight years, the
Chinese Communist administration is attempting to consolidate its or-
ganizational structure and to eliminate over-staffed and overlapping
administrations. The first major governmental consolidation in the
Soviet Union was not taken until 1953, shortly after the death of
Stalin and some thirty-five years after the establishment of the
regime.
The present Chinese reorganization has been publicly related to
the current rectification campaign which has concentrated on reducing
Peiping's inflated bureaucracy and sending "non-productive" personnel
back to the countryside to engage in "production." It is also direct-
ly related to the limited decentralization of industrial administra-
tion announced by the State Council in November 1957. 2/ At that
time Peiping planned to transfer to the administration-of local govern-
ments enterprises under the control of the central Ministries of Food
Industry,* Timber Industry and Light Industry.** At the same time
certain construction units and some enterprises engaged in the pro-
duction of building materials were also transferred from the national
to local administration. These changes obviated the need for separate
central ministries in these fields.
The abolition of the Commission for National Construction has
not been explained. The Commission's responsibilities have never
been clearly defined, but it has been assumed that it planned and
coordinated construction activities undertaken by the many industrial
ministries and the Ministry of Construction and Engineering. Part
of the Commission's planning function has now been transferred to
the two planning commissions, the National Planning Commission and
the National Economic Commission. Some planning responsibility and
all of the Commission's coordination activities have passed to the
Ministry of Construction and Engineering. Originally established
in 1954 to engage in civil (non-industrial) construction, this Minis-
try has become increasingly involved in industrial construction with
every passing year. aMore than 40 percent of the Ministry's 1956
construction plan was devoted to factory production, and it has been
* The jurisdiction of this Ministry included processing of flour,
sugar, oils and fats, wine, tobacco, and salt.
**Industries under this Ministry included: papermaking, pottery
and procelain, leather, consumer goods in the chemical and metal
products field.
14 March 1958 CURRENT SUPPORT MEMORANDUM 565 Page 2
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Ir xmn*r .4 1r
reported that the Ministry is responsible for the construction of more
than one-half of the 1956 Soviet aid projects. 3/ If this trend con-
tinues and the Ministry's responsibility for all capital construction
increases--which seems likely since it absorbed two other construction
ministries--the problem of coordinating construction activities of the
industrial ministries should correspondingly decrease.
The regime has made no announcement on the nature of the changes
made in the machine building industry. The Third Ministry of Machine
Industry has been renamed the Second Ministry of Machine Building and
the responsibility of the First Ministry of Machine Industry (machinery,
automobiles, ships and railroad equipment) has been enlarged to in-
clude power equipment and the defense industry. The incorporation of
the Ministry of Power Equipment is not unusual, for the First Ministry
of Machine Building controlled the production of this equipment prior
to 1956. However, the merger of the defense industry (the former
Second Ministry of Machine Building) with the First Ministry of Machine
Building is significant. A November 1957 announcement said that in-
dustrial enterprises engaged in defense production would produce fifty
types of products for civilian use in 1957. 4/ Among those products
listed were airplanes, busses, trucks, locomotives, bicycles, machinery
equipment for chemical plants, air compressors, hydraulic presses,
electric furnaces, drills, pumps, and optical glass. The head of the
new Ministry is General CHAO Erh-lu, a man with ordinance experience
and minister of-the Second Ministry of Machine Building since its
establishment in 1952. His current appointment as head of the new
First Ministry of Machine Building will doubtless insure the proper
consideration of defense interests within the enlarged responsibility
of the new ministry. _
14 March 1958 CURRENT SUPPORT MEMORANDUM 565 Page 3
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History of the Economic Ministries Affected by the 1958
1952
National Planning
Ca ssio
Reorganization of the State Council
1951s 1956 $
National Planning
Commission
Commission for Na-
tional Construction
National Economic National Economic
Ministry of Con-
struction and En-
gineering
Ministry of City
Construction
Ministry of Bldg.
Ministry of Heavy
Industry
First Ministry Ma-
chine Building
econd Ministry Ma
Nine Building
Material
Minii6try
C~.f' Chem-
dustry
r
Ministry of Power
Equipment
Third Ministry Ma-
chine Building
Ministry of Water
Conservancy
LIMinistry of Forestry
Ministry of Elec-
tric Power
Commission
inistry of Con-
struction and En-
gineering
Ministry of Chem-
ical Industry
Ministry of Metal-
lurgical Industry
First Ministry of
Machine Building
Second Ministry
chine Building
Ministry of Water
Conservancy and
Electric Power
Ministry of Forestry
Ministry of Timber
Industry
Ministry of Light
Industry
Ministry of Foreign
Trade.
Ministry of Domestic
Trade
Ministry of Food
Industry
inistry of Light
Industry
Ministry of Foreign
Trade
Ministry of City
Services
14 March 1958
y of Metal-
lIdustry
CURRENT SUPPORT MEMORANDUM 565
First Ministry of
Commerce
Second Ministry off--(
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Analys t
Coord
14 March 1958 CURRENT SUPPORT MEMORANDUM 565
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