SUMMARIES OF TRENDS AND DEVELOPMENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000300020004-3
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: November 9, 2016
• Document Release Date: January 29, 1999
• Sequence Number: 4
• Publication Date: August 22, 1950
• Content Type: SUMMARY

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22 August 1950
SUMMIES OF TRENDS AND DEVELOPMENTS
USSR
1. he Soviet obiect3.vfa, in Ingo-Chinais to elim .hate
Western influence and to extend the control of the pro-SSoviet
regime over all of Vat~Nam. Even failing this, it is to Soviet
advantage to have French troops heavily committed in Indo-Chinas
thus hampering the stabilization of the French economy and
European defense plans. To achieve this goal, wholly or partially,
the Ho forces are expected to launch an offensive against one or
more ixaportant French Viet Namese positions in the near futures
aided by covert Chinese Communist equipment, arms, training.. and
advisors,
(Page 5 )
2. i_at revision of SC records softenitna the USSR's
r2Ao1 s Po sit-on that the Korean roblem and Chinese Communist
rems2cal,, .t iron in the UN are 'rinse -oa:rablk " is as fiur?ther indien,--
t? or that to e` USSR is t to obta.injy cater freedom of action
in dea'.i ~~rithtthe Korean issue. By disentangling itself from
a comtni tmcnt to obtain a seat in the UN for Chinese Communists
before agreeing to a settlement of Korean issue,, the USSR would
be free to agree to a negotiated settlement at the moment most
advantageous to its own interests.
(Page 6 )
3. Wliilc~ recent Soviet actions could foreshadow a
ofsys+e tie encroachment on Austria fs aglitticaI sover-
eir~, yy they may welly be nothing more than probing actions in
the Soviet Union's continuous war of nerves against the Austrian
Government,
(Page 7 )
as rHN
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co
40 The vast_ potash deposits of the Sovzone of Germany
have -provided the USSR with one of its stropgest,bar Innir
media in international trade,
(Page 8 )
5a The USSRhas for some time boon rebuilding and
pyro pr 1 , the direct transport .tion facilities from Moscow to
.
.`w__...-
Smolensk MinskErest~
(Page 9 )
6?,l ~hu?li,lre iinno confirmation re ag Ldinthe
rlamorc d visits of "ire- t ?emier Molotov -be Pekin, ,the various
rc or ou movements, of Soviet and Chinese officials concerned
with i.itical as well as mllitaY _af 'airs indicate that the USSR
maybe conducti hh-level can f renoes in Perking and Miakden,
In this event, conversations probably canter on a x^e-evaluation
of overall policy to accommodate the changed situation developing
from US action in Korea and Formosa, and discussion of Soviet
support to the Chinese Communists whose plans for the attack
on Formosa wore probably blocked by, the initiation of hostilities
in Bc rea? However, lacking firm information, any estimate re-
gnrcling the holding of cionforencea and discussions therein$ is
wholly spectLlative0
EASTERN EUROPE
GENERAL.
7A Hunger and_Poland have submitted to ECE lists of
industrial machine available fore port, which is interpreted
as largely a~maneuver to discourage parallel export control
action.
(Page 10 )
COENTIAL
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gULG4LTA
8. B l riats ddemand that Turkey roj?triate 2 0,000
Btrlgariara city ens of Turkish origin is, yrobablypr Ma , de.
s,~nec b embarasTur, k through inability to comply with
conditions set out in the Bulgarian note. At the same .time,
the move will enable Bulgaria to increase the rate of removal
of this.dissident and potentially dangerous minority.
(Page 11
9.h~ ,Ttze domcs,zc trdedeoree is beingn ei ented
in j"ao7 a with the expansion of free trade facilities and In-
creased supplies of industrial consumerst goods to rural areas.
The latter is particularly emphasized for the purpose of elicit-.
ing larger and quicker deliveries of cereals from the peasants.
HUNGARY
10, Eugene Varga. the USSRs famouseepnosit~wha
has 2~0rs visiting in Fluff ~xo_e ince Junes is rc~ ~e ted to have
bocoma an in stant econan~ic ar lrisor to the Hun Tian Govern-
monk, ?Of Hiungarian origins ho served as Minister of Economics
in the abortive Bela Kun regimen and in 1919 escaped to the
USSR. After World War TIC Varga became the central figure in
a much publicized controversy revolving around certain: of his
unorthodox views; he was forced to recant in 1949 and was given
the comparatively minor task of working on a plan to introduce
scientific techniques into the economy.
If he is now., in fact, serving as an economic
advisor to the H ngarian Government, it would appear as a
combination of circumstances: (1) Varga had lost much prestige
and was no longer permitted freedom in his field; (2) Hungary
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badly needed experienced economists; (3) Varga, now 70 and aware
of his insecure position in the USSR, was probably content to
spend his remaining days in his native country as a relatively
inconspicuous advisor.
114 Si? .Qa' ~Qx~. th4aLe
of Bishops, into aceep;ti s, version o f a Church- tat a. ree--
ment ma _, compel the iun arian Government to stage another
Mird;gent ty trial? Since May, Bishop Petory has been under
constant attack in the press, and recently the Hungarian National
Peace Council demanded that the Government "put an end most
urgently to the Bishop's activities," Accused of being a fascist,
an agent of the imperialists, and an enemy of the people, Petory
is be .ng s?h ectod to the same kind of propaganda preparation
which led to Mndszenty's arrest and trial,
?Petory is not alone among the Bishops in his
recalcitrance, therefore the reason for singling him out for
special berating may be that his national reputation would make
him a more effective scapegoat than the less well-known Bishops.,
The throats against Potery, may, in themselves serve the Govern-
a lent 's purpose of bringing the Church to terms,, although in
view of their continued stubborn opposition, it seems likely
that further pressure must be brought to bear before the Bishops
are completely b roken.
12" Rmiors that osl~zv and?Sovietomissarics met to
seek r ppra h mc'nt tn late uoyorearly Aumst are pro--
fabrication. Not only is evidence to support them lacking but
the disadvantages of such an agreement would tend to militate
against its occurrence.
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Soviet-Communist Plans for VietNam offensive
The Soviet objective in Indo-China is to eliminate
Western influence and to extend the control of the pro--Soviet
regime over all of Viet Nam. Even failing this, it is to Soviet
advantage to have French troops heavily committed in Indo-China,
thus hampering the stabilization of the French economy and European
defense plans. To achieve this goal, wholly or partially, the He
forces are expected to launch an offensive against one or more
important French Viet Namese positions in the near future aided
by covert Chinese Communist equipment, arms, training and advisers.
Simultaneously, increased terrorism and propaganda in the Frenoh-
Viet Nam cities will attempt to intimidate and/or persuade Viet
Natese and overseas Chinese of the advisability of siding with
the Vet Minh and of the inevitability of a "democratic"' victory.
In addition, sabotage of French depots and US arms aids now
arriving in Viet Nam9 can be anticipated.
Soviet aid and advice for this move has' been
delivered primarily through the Soviet Legation at Bangkok and
through the Chinese Communists. It is probable that the Soviet
Legation at Bangkok has provided funds and advice to the Viet
Minh. The French Far Eastern Command has reported that Soviet
advisors and technicians are actually with Viet Minh forces,
Soviet military personnel in South China and Hainan are reported
to be supervising Chinese Communist aid to Viet Minh forces as
well as joint preparations for the fall offensivem,
Closer Chinese Communist-Viet Minh cooperation
apparently dates from early 1950, when Ho Chi-minh was recog-
nized by the Peiping regime and the USSR. Recently Chinese
Communist aid to the Viet Minh is reported to have been greatly
increased. Arms and equipment, and probably advisers and
technicians, have been sent from South China and Hainan,. Roads,
air bases) and training camps have been constructed or repaired
in China near the border. Between 10,000 and 20,000 Viet Minh
troops have been trained and equipped in China and some have
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apparently engaged in joint operations with Chinese Communist
units against anti-Communist guerrillas in China,
The Ho radio has increasingly stressed the role of
Viet Nemeso Chinese in the "liberation movement." Recently it
announced a conference to unify the combat forces of various
Chinese organizations in South Viet Nam and emphasized the
directive of the Peiping Government to all overseas Chinose to
cooperate in the "fight for the liberation" of countries in
which they reside. These moves are probably designed to prepare
public opinion for Chinese Communist-Viet Minh cooperation, as
well as to pressure overseas Chinese into supporting the He
regiz:lo
Despite Chinese Communist propaganda hints that
an excuse for "defensive action" against the French may be
sought open entry of Chinese Communist forces into Viet Nam
is not expected for several reasons. First, the USST. apparent-
ly is desirous of keeping Communist actions localized at this
time, While a Viet Minh offensive would probably not result in
an extension of warfare beyond Indo-China, where fighting has
been contin;aing for several years, the overt participation of
Chinese Communist troops might have widespread repercussions
which would not be sufficiently counterbalanced by the more
rapid Communist conquest of Viet Nara than the Viet Minh could
accomplish with clandestine and d sguised aid, Second, the
Chinese Communists are-already committed to two military tasks
(Taiwan and Tibet) and, in addition, the internal security
situation would discourage the Peiping regime from dispatching
troops to non-Chinese territory, Finally., the Viet Nameso
generally dislike and suspect all Chinese, and the Ho regime
would be handicapped by open alliance and support of Chinese
Connunist troops in Viet Nam, (SECRET)
M~.1;3.k I~,~va.ses Sc~v?.et x~osition
far Socur%ta _,Council reword'
Soviet UN Delegate MalikTs recent efforts to
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revise the records of the SC suggests that the USSR is softening
its previous position that the Korean problem and Chinese Commun-
ist representation in the UN are "inseparable." On 10 August
Malik revised the SO records so that his earlier statements in the
SC with respect to the "close and indissoluble" connection between
representation of China and the peaceful settlement of the Korean
question were amended to read that these two issues are "connected
questions," Previously, the USSR had consistently maintained that
Commanist China must be represented in the SC before any action
could be taken on the Korean question, and in his reply to the
Nehru proposal Stalin made it clear that the USSR considered the
participation of Communist China in the UN "obligatory" for a
settlement of the Korean issue.
Malik?s revision of the SC records is a further
indication that the USSR is trying to obtain greater freedom of
action in dealing with the Korean issue, By disentangling itself
from a comni-tnent to obtain a seat in the UN for the Chinese
Communists before agreeing to a settlement of the Korean issue,
the USSR would be free to agree to a negotiated settlement at
the moment most advantageous to its own interests.
Because the voluntary Soviet return to the SC with-
out the prior admission of Communist China has lessened the
urgency of this problem, the USSR must now realize that the ad-
mission of Communist China will probably have to await a settle-
ment of the Korean issue.. The USSR may hope, however, by
separating the two issues, to utilize more effectively the problem
of Chinese representation as a wedge to divide the non-Communist
world when the Korean issue has been solved. (SECRET)
Recent Soviet actions in Austria
"B"
Soviet officials in Austria have recently made
demands which,, if implemented, would encroach onAustrials
political autonomy. The Provincial Government of Lower Austria
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has boon notified by the Soviet Cor,zaandor of the province that
henceforth a Soviet observer will attend all Provincial Cabinet
sessions. The Provincial Government has replied that such action
would violate the Austrian Constitution and the Allied Control
Agreement, and that the appearance of a Soviet observer at any
session would result in immediate dissolution of the meeting.
The local Soviet Coriiander of Wiener Neustadt9 who
recently prevented the execution of a court order against a
Cor..nuaaistp has notified the court that- he would soon issue a
list of Austrian laws which could be executed without prior Soviet
approval, The execution of all other laws would apparently re-
quire prior approval. Soviet officials have consistently refused
to honor Austrian court orders to evict Coriunists who illegally
occupy ape ri gents and other housing,, but this is the first time
that a Soviet official has assumed the right, of direct control
of a court in its execution of all Austrian laws. The Austrian
Government has decided to convene a special Parlianentary pro-
test session if the Soviet authorities attempt to implement
either of those announced intentions.
'W'hile those actions could foreshadow a Soviet
policy of systematic encroachment on Austriats political sover-
eignuy9 they nay well be nothing more than probing actions in
the Soviet Unionts continuous war of nerves against the Austrian
Govu nnent, The USSR has, in the past, retreated from similar
demands which encountered vigorous reaction on the part of the
Austrian Government. (SECRET)
USSR a?lo to ng East German po .h.
in international trade
The vast potash deposits of the Sovzono of Germany,
with an estimated 19200,000 tons annual production, have given
the Soviet Union with its own production of 4009000 tons control
of nearly 45 percent of the worldIs output of this important
fertilizer and provided the ITS M with one of its strongest bargairn-
ing media in international trade. The present Soviet policy is to
SECRET
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derive every possible immediate advantage from this favorable
export position without regard for future economical working
of the deposits,
Soviet influence in the potash trade is shown in
several instances. Through sales in Canada and the USy normally
supplied by US producers,1the double purpose of breaking existing
prices and also obtaining US dollars without regard to production
costs has been achieved, The normal potash markets in the U.K.
have boon disrupted by prolonged negotiations over terms of sale
and delay in shipping. Soviet relations with Dutch and Belgian
interests have been more cordial and, by barter arrangements,
materials which are in critically low supply in the Sovzono, have
been obtainod,
The potash mines and processing plants are being
exploited at the maximum possible rate with no attempt being
made to modernize ae rehabilitate the installations and, as a
consequence, production is already on the decline. This may be
simply another example of short-sighted production policy, but
it may have a more sinister explanation. In the event of total
war mobil,&t.ony potash production would be curtailed appreciably,
as it was during World War II, in order to divert the manpower
into more direct war use and to conserve the large quantities of
coal used by the potash plants, (SECRET)
U SIt 1
npre!es Moscow-Minsk-Warsaw line
The USSR has for some time been rebuilding and
prcp,,ring the rail, highway, and air transportation facilities
along the Moscow-Smolonol-Minsk-Brest Warsaw route.
"B"
The construction of many airfields along this route
has been reliably reported and an American observer in mid-May
noticed fairly large numbers of air force personnel travelling or
waiting in stations between Moscow and Brest.
The improvement of the Moscow-Smolensk;Minsk high-
way, one of the very few first class Soviet highways, is now
SECRET
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being extended from Minsk.
Railroad service has also been improved, and the
trans--loading yard at Brost is one of the largest in the USSR,
New station facilities are being constructed, notably at
Smolensk, and the roadbed is being improved, An American
traveler in May of this year reported a smooth ride. This is
unusual in the USSR and probably is a result of strengthening
the roadbed to support hoavy.loads, (SECRET)
EASTERN EUROPE
GENERAL
H ,a.rian,_ ,nd Polish d ata subi ,teed to ECE nB11
in manuy2K toforestall stricter effort control
Hungary and Poland have reported to the Industry
and Materials Division of the UN Economic tbmmission for Europe,
a wide variety of engineering products available for export to
Western Europe, Motors, machine tools, steam locomotives, and
combine harvesters, same of which are now being exported in
limited quantities are among the items listed. In furnishing
the lists, the Communists follow their usual practice of with-
holding any data of value - prices, quantities and delivery
dates, The Industries and Materials Committee of ECE has always
received strong Communist support because the Kremlin considers
it a vehicle for undermining the influence of OEEC and EGA.
These lists were probably also submitted with a
view to confusing Western export control negotiations and to
provide a propaganda device. Proclaiming the ability to export
industrial items which appear to fall within the "strategic
commodityo categories would substantiate: (1) the Orbit con-
tention that it is Western not Eastern Europe which is dependent
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upon East-West European trade, and (2) Communist claims that
export controls are useless and may as well. be abandoned. In
spite of the impressiveness of the products itemized, there
has boon no easing of. Orbit effort to acquire similar categories
of commodities from Western Europe. (SEOIIET)
BULGARIA
Btilgt2ri, demands xeriation of m.noriy~o Tore
Constant bickering on the propaganda and diplomatic
fronts between Bulgaria and Turkey, featuring charges and denials
of Crnmminist maltreatment of the Turkish 700,000 racial minority
in Bulgaria, has culminated in a Bulgarian note demanding that
Turkey repatriate 250,000 of its former citizens within the next
three months.
During the past two years Bulgaria has issued
passports to, and the Turks have admitted, at least 15,000'
Bulgarian citizens of Turkish origin. At the present time,
Turkey is admitting about 600 per week. Inasmuch as a Bulgarian
condition of immigration is the confiscation of all property,
even the present influx is taxing Turkish resettlement facili-
ties. The new Bulgarian demand would raise the number to
approximately 20,000 per week.
The Bulgarian note is an admission that the
Communists have found the Bulgarian Turks increasingly rocal-
citrant. Although the urgency implied by the Bulgarian note
might indicate that the Kremlin contemplates Bulgarian aggres-
s'ion' in which event the large and homogeneous Turkish minority
would present a major control problem, it is more likely that
this is a Soviet maneuver to embarrass the Turkish Government
by Turkey's inability to comply within the time set.
Although Turkey is anxious to repatriate its
racial. minorities in Communist controlled territory,, literal
compliance with the demand within the time wt will probably
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be impossible. The fact that all such immigrants will be com-
pletely indigent and that Bulgaria will attempt to infiltrate
the group with Communist agents will necessitate time-consuming
resettlement arrangements and minute individual screening. The
expense involved will be a significant drain on Turkish economy.
Ample justification can be found in this Bulgarian
maneuver for a further strengthening of charges of violation of
human rights. Bulgaria cites as authority for the demands a
Bulgar-Turkish Convention of 1925 covering the rights of
nationals of each of the two countries resident in the other.
However, Bulgaria has always treated these ethnic Turks as
Bulgarian citizens, This mandatory mass emigration and confis-
cation of property constitute violations of fundamental human
rights, if Bulgaria is now contending, as it would appear,
that these Turks are Turkish nationals, Bulgaria has denied to
them the privileges and rights provided for such nationals by
the Convention. (SECRET)
Rumors of yTito?-Krwomlin r proohemcnt discounted "An
Despite persistent rumors emanating from various
European capitals that Yugoslav and Soviet emissaries met in
late July or early August to seek a rapprochement, there is
little ground for believing that such a rapprochement is pos-
sible. The original. sources of the rumors axe tenuous and
the best efforts of US observers to confirm thorn have been
unavailing. Moreover, the logic of the situation is against
such a reconciliation, Although Yugoslav loaders are concern-
ed about Soviet menaces in Yu.goslaviats present plight, the
Yugoslav hierarchy must be well aware that the only conditions
acceptable to the Kremlin would lead to their capitulation and
eventual elimination, It is doubtful if even the imminent
threat of Soviet aggression would prompt Tito to this course of
action.
For its part, the Kremlin would find a volte-face
on Yugoslavia extremely difficult to execute, in view of Soviet
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C0%
pressures on Tito during-the. past two years. Moreover, at the
present period of crisis, when the lines are being more clearly
drawn between the East and West, the Kremlin could ill afford
to allow Satellite Communists in Europe and Asia to assume that
the Kremlin might countenance an equality among sovereign Com-
munist states, such as a rapprochement with Tito would signify.
Any indication that Tito had succeeded in effecting a roconcilia-
Lion, however uneasy, would undermine the Kremlints point that
the Soviet Union will not countenance the least opposition
within its orbit.
Thus it would appear that the rumors are fabrica-
tion, They may have been spread bys (1) Soviet agents in
order to doter the US and other Western powers from bolstering
Tito's economy at a critical stago, (2) Greek representatives
attempting to guarantee a steady flow of US aid to Greece by
raising the specter of a Yugoslav Soviet combination, or (3)
anti-Communist Yugoslavs in an effort to weaken the Tito regime
and thus perhaps strengthen their own position. (SECRET)
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