CHINESE INDUSTRY FROM THE AIR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71T00730R000500030021-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 12, 2016
• Document Release Date: September 13, 2000
• Sequence Number: 21
• Content Type: REPORT

0 L`!' D F,,r
- Approved For Rele, se 20(klj0 ;&4ADF,M- l T00t.38R000500030021-2
25X1X7
When the Great Leap Forward collapsed in 1961 a "cone of
silence" descended over China. Mainland newspapers and magazines
ceased to contain meaningful statistics on industrial activity in the
country, radio broadcasts were emptied of all but propaganda, and
travel by foreigners was largely restricted to tours of First Class
Commune No. 1 and the Great Flood Control Dam of the Mangu.
Even on purchases of plants and equipment from abroad there was
often a costly forfeiture of associated guarantees because foreign
technicians were not permitted to install them and the supplying
countries were not even informed of their location. This almost
complete blackout of information would have left the economic-
industrial intelligence officer quite desperate had it not been for the
25X1 DOa
High-altitude photography of course brings important information
to others in the community besides the economist, notably to military
intellige-nce officers, but in this article we are concerned only with
the service it performs for the disciples of Samuelson and Galbraith.
Take:_ , ,one, its information on industrial activity in Communist
China _.,,ves only a minimal foundation for intelligence estimates.
Wier. orrelated with pre-blackout data and the limited current infor-
mation: that comes in from other sources, however, it enables us to
-raw na_iy valuable conclusions about the Chinese economy today.
Though its usefulness with respect to different industries varies from
high to negligible, over-all it is comparable in significance for China
to the annual statistical yearbook for Soviet industry.
The basic store of information on Chinese industry goes back to
before the Communist takeover in 1949; much of the mainland industrial
base was established by then. The huge iron and steel complex at
Anshan and many of the varied industrial activities at Shanghai and
Wuhan and in other widespread areas were developed by the Japanese
Approved For Release 2001/0 71 T00730R000500030021-2
 SECRET
Approved) 1)fel'se 20%V10 qg faA 71 T007?0R000500030021-2
during their occupation. Then many plants damaged in the war
were restored or reactivated, some with U. S. assistance, between
1945 and 1949, so that much information is available on these from
Chinese Nationalist, Japanese, and U. S. sources.
During the first 10 years of the Mao regime, when there was a
great deal of industrial expansion and modernization, the Communists
reported openly about the progress they were making. This informa-
tion was by and large reliable; the achievements of the Communists
in this period, compared with the Nationalists' record, were impres-
sive enough to need no embellishment. A considerable amount of
accurate information thus came out of China up to 1959.
When in 1959 the Communists attempted to make it in one great
leap to the forefront of the industrial nations of the world, they not
only established completely unattainable goals but also reported in-
credible progress towards them. Almost all of the information they
issued at this time was impossibly warped or exaggerated. Even so,
placed against the previous reporting, it gave some insight into actual
accomplishments. When the great silence enveloped the country in
1961, therefore, a good basic reservoir of data on the industrial
establishment was available to the economic intelligence officer.
Aerial Photography: Spotting and Typing
Aerial photography's most obvious and most frequent contribution
to the production of economic-industrial intelligence is in locating
industrial facilities and discovering what they are for. In a somewhat
lee precise way it can help in determining a plant's operational status
a?a in a few cases even in estimating its current rate of production.
It an also follow the progress of new construction from the initial
clearing of ground to the completion of an installation.
It must be kept in mind, however, that for the production of
intelligence a good deal of information must be available from other
sources than aerial photography, and studies in depth are required
to create from it a useful product. The economic-industrial intelli-
gence officer must weave together the photo interpretation of an
installation with information from ground observation of it, reports
Approved For Release 2001 /03/2ffDP71 T00730R000500030021-2
 SECRET
Approves fRf jelgse 209tfO li(gAD ITOO7 R000500030021-2
25X1 D3b
on equipment housed in it, etc. , and apply to all this his knowledge
of the industry in question and the particular practices of the country.
Some industries are readily identified in aerial photos because
of characteristic peculiarities either in the plant itself or in ancillary
facilities. An excellent example of distinctive industrial configuration
is presented by an integrated iron and steel plant, with its easily
recognizable features such as blast furnaces, coke batteries, coke by-
product plant, open-hearth furnace buildings, and rolling mills.
Another easily spotted industrial facility is the petroleum plant: the
tank farm jumps out at the PI on his very first scan. The large pot-
room buildings of a modern aluminum plant with their associated
rectifiers and transformer stations are also easily distinguished even
by the novice PI.
There are other industrial plants, however, that a trained PI can
identify only by a careful scanning of the photograph. Falling into this
category are copper refineries, fertilizer and most chemical plants,
and cement (unless marked by horizontal rotary kilns) and lime plants.
Finally, some industrial activities cannot be identified from aerial
photography at all. A striking example of these is the manufacture of
titanium: in the United States two of the leading titanium plants are
currently housed in old steel works, without any alteration of their out-
ward appearance . An identification of these from aerial photography
alone would be likely to be a false one, as steel mills of some sort.
The correct identification of an installation may depend on getting
accurate measurements of its features. If it is co-located with others,
relative size is often enough of a clue, but otherwise real measure-
Operational Status; New Construction
25X1 130a
Approved For Release 2001 /03/9.RCQIIA=-DP71 T00730R000500030021-2
 SECRET
Approve KRel a 200h/Q3O2icMA ]R1T00 9R000500030021-2
25X160
Approved For Release 2001 /03/6f-'DP71 T00730R000500030021-2
 SECRET
Approvedf6t)ffeI ease 2098/QpgI:CRI Ej1 TO07.BR000500030021-2
An Iron and Steel Plant
The Wuhan iron and steel plant will serve as a good example
from this industry, showing how well it lends itself to identification:
25X1 BOa
SECRET
Approved For Release 2001 /03/Q;EF~.DP71 T00730R000500030021-2
 Approved For elease 206bb~MTCIA-RDP71 T00730R000500030021-2
NO FOREIGN DISSEM
25X1X7
steel it produces into some kind of finished or semifinished product.
What the mix might be cannot be ascertained,
In sum, the following estimates can be made on the Wuhan plant
by evaluating the combined information from all sources:
Pig iron capacity is about 2. 5 million tons per year with all
three blast furnaces operating full time, according to
collateral information. Aerial photography permits the
conclusion that the plant was probably operating at a high
rate throughout 1966, and a reasonable estimate of its pig
iron production in 1966 would therefore be about 2 million
tons.
A crude steel capacity of about 1. 5 million tons is derived from
collateral reporting. Aerial photography leads to the con-
clusion that the open-hearth shop was probably operating near
capacity all through 1966, so well over 1 million tons of crude
steel was probably produced. The excess pig iron is sent to
Shanghai for processing.
Finished steel capacity is not given in collateral reporting, but
the number of rolling mill buildings visible lends confidence
to an estimate that all the crude steel produced here is
probably rolled into some finished or semifinished form.
A~plying the usual rule of thumb that finished steel amounts
to about 75 percent of the crude, we get somewhat near 1
million tons as Wuhan's finished product in 1966.
Probably the second most easily identifiable industrial facility
he modern aluminum plant. Because it recovers the metal by
25X1 130a
Approved For Release 2QD'f 3102T: CIA-RDP71 T0073OR000500030021-2
 SECRET
Approved For Rele de 20 Ad/ inGl/ DP71 TOON0R00059?991-2
25X1 BOa
Although the cement industry is a decentralized one, spread out
25X1 BOa
Approved For Release 2001 /O3/6 aNk DP71 T00730R000500030021-2
 SECRET
Approved For ReI - e 20g8/WP?I: dpi ?j1 T0071WR000500030021-2
25X1X7
High-altitude photography is of great value in determining the
25X1 B0
25X1 130a
e and location of power plants, and it gives reasonably accu-
NO FOREIGN DISSEM
Approved For Release 2001 /03/(FPDP71 T00730R000500030021-2
 25X1 B0
25X1 130a
Approve
Copper
500030021-2
Most of the Chinese copper production is concentrated at four
large combination plants at mine sites. These plants process the ore,
smelt it into blister copper, and then refine this electrolytically into
NO FOREIGN DISSEM
Approved For Release 2001 /1~C1A-RDP71 T00730R000500030021-2
 ? SECRET
Approved For Release 2O1 /.O2G:NCtA
P71 TOO;80R000500030021-2
25X1X7
Aerial photography is of little use in determining the production
of railroad rolling stock, but it is a direct and accurate means of
following the development of the railroad network of a country. It has
been especially useful in application to the more remote areas of
Communist China. From the initial preparation of the roadbed through
the construction of tunnels and bridges to the final laying and aligning of
track, the whole construction process can be watched, Good-quality
photographs even show trains in transit on the completed lines. The
25X1 130a
Some insight into capacities or operational levels of other sectors
of the Chinese industrial base can be gained from aerial photography,
and the purpose of new construction can often be determined if it is
associated with a known installation. Plants pointed out by other
sources can be watched and in some cases their operational status defined.
The over-all level of industrial activity in China can be surmised
by projecting the activity in the key industries discussed above, parti-
cularly the iron and steel industry. Sometimes referred to as the
"bellwether" of an economy, certainly steel output signals the general
trend of economic activity in China, even though its correlation with
GNP, national income, and the index of industrial activity is not perfect.
The more skillful we can become in evaluating high-level photography on
the most photogenic industries the better we will be able to assess the
general economic situation in China.
NO FOREIGN DISSEM
Approved For Release 2001 MtDP BXA-RDP71 T0073OR000500030021-2