FAR EAST/PACIFIC BRANCH OFFICE OF REPORTS AND ESTIMATES CENTRAL INTELLIGENCE AGENCY WORKING PAPER WEEKLY INTELLIGENCE HIGHLIGHTS NO. 66

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000500030015-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 9, 2016
• Document Release Date: January 26, 1999
• Sequence Number: 15
• Publication Date: September 6, 1949
• Content Type: PERRPT

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FAR EA3TAACIFIC BRANCIT
OFFICE OF REPORTS AND ESTIMhTES
CENTRAL INTELLIGENCE AGENCY
WEEKLY INTELLIGENCE HIGHLIGHTS
NO. 66
LATE= 6 September 1949
QCUMENT NO.
PACE i?~ CLAS.Si. ^
CCU . I..L
f~l _y'iEWER_ d72,
NOTICE s This document is a working paper, not an official CIA
issuances It has been co-ordinated vdthin ORE, but
not with the IAC Agencies. It represents current
thinking by specialists in CIA, and in designed for
use by others engaged in similar or overlapping studies.
The opinions expressed herein may be revised before
final and official publication. It is Intended solely
for the information of the addressee and not for further
dissemination.
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 25X6A
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~ 31
QIGRET
OFFICE OF REPORTS AND ESTIMATES, CIA
FAR FAST/PACIFIC BRA[)CH
INTELLIGIIbCE HIGHLIGHTS NO. 66
31 AUGUST to 6 SEPTEUBJ1 1949
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SECTION I. SUMMARY OF FAR EAST TRENDS AND DEVELOPMENTS
Substantial Korean forces, trained and equipped in Manchuria
by the Chinese Communists, are reported entering the northern puppet
Republic as reinforcements for the expanding Peraples' Army (p. 3
While the anti-Nationalist: coup in Yunnan has not yet placed that
province in the Communist camp, it is bo1ievad that the author ides in
control of Kunming are at least inclined towards accomodation with the
Chinese Communists (p. 3).
Recent a taterE nts by Ho Chi ! Anh's resistance government, in
Indochina indicate that the days when a compromise aettlemmt for
"independence" within the framework of the lrencht Union might have
been possible are now past (p. 5),
Combined Karen-Kachin military activities in the Shan State
of northeast Burma are meeting little resistance and tipossi-
bility exists that a united minorities' front may be formed in
opposition to the Eu.rmsse Government (pa 6 )
'thp marginal notations used in succeeding sections of this y;eekly
"A" tfB6t
.1 , or i7fC") indicate the importance of the items in B/AE opinion
with "A" repro entin. the most important.
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OR BA
Peoples' _A.rmv reinforced--A .1.r??e,_s c .e movem.e..z t into northern
Korea pby Korean troops, ...trained and equipped by tk?e Chirse Cortatunist.:s
n lVanchuria, appears to have developed during July and Aug+.xst and
probably is continuing, Recent reports state tkx~t twenty to thirty
thousand troops (with equipment incl - ~;xg :apttired US trucks and
ma11 arms) entered northern Korea th .-ough Siraiiju. in a i5-day
p ?.iod. Rumors in northern. Korea rxo I ce the numbW of Chinese
Korean troops In the Peoples' Arne at 50,OO0., While this number
is believed exagger a.ted, it is pr?obabl that the Feoples' AraV is
presently in the proces.:, of expansion .fro, about 56,000 to a
reported aai of 100,000.
The fall signi_fi. ne of the expansion of the Pe,)plesl Army aryl
t_ is coatinuliaft Concentration aea::r? the 38th Parallel i;a not clea.r?.
thou Th tae expansion of the Peoples' Ar.?mzy might, Indicate prepara-
tions for vi early invasion of southern Korea,, there is some evidence
that the rapid ;acparz?iorz o1' southern xiorean .farces, the police dis-
ruption of the Comr>:ae,.niisf, underground in southern Hor?ea, and unrest in
.orfrherrz Korea have forced the pr?esen`i expansli)n of the Peoplas'
f,;rniy as a defensive measure.,
c'Revol.t" in Ycxrgrza-zi-..Press reports from -fong Kong,, attributed to LUNG
z r:, fc~zrrre~,, a#'~.rz~ux governor, state that LU Han, the present ,!,overnor
of Yunnan and a step-brother of LUNG, has issued a i rzifes` z ida
declares his opposition to CHI~l' Kai:-shek; ha.-, reportedly eat.at
fished :Ind-Rper~dent 3 ?~ ? } ? ?a ': o'nt.s of o'b or the Ku ` i a. ' ka y raid
will seek a local settlement with the Ghinese Corm&unists.
:tin's action in Vebelling'" agai.ns t Nationalist. a,zthor i,t:y at
thxis3 time is apparently In answer to increased National is t pressure
on iunnnan, a rear area, to quit straddling the fence in t.IYj Nat:ionalist-
ia.eezmr?.u li3 t shcy5' down. Are:; s such as Yu'`"nary which -er+red as r?ear bases
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for the war against Japan, have more recently been thrust into promi-
nence in the Nationalist's struggle against the Co?m ccanist,s. INationalist
functionaries, including CF TANG Ching-kuo, one of the Generalissi 's
sons, have lately been visiting the province in an attempt to convince
LU not to desert the Nationalist cause. Such renewed Nationalist Interest
is not welcomed in the back area of Yunnan, where there is little evi_.
denc of either the desire or the intention to oppose the Communists'
manifest "mandate of heavens.
At present there are In Yunnan at least four separate military
forces, the realistic bases of political power in China, each opposing
the other: Governor LU Han a s Provincial troops number between ten and
fifteen thousand; the Nationalist 26th Army has a strength of from
sixteen to twenty thousand; Cormnunx 3t guerrillas, bandit and dissident
forces total some forty to fifty thousand; while various minor forces,
loyal to ex-Governor LUNG, probably amount, to no more than three
thousand. The Communist guerrillas and bandit.' forces exercise almost
complete control over about one-third of the province and a lesser degree
of control over another third. Provincial authorities have firm control
over the remaining third, mostly around Kunming.
Reports indicate that LU's regime has lately been gaining in popu-
larity, following a fairly successful. ':bandit suppression" campaign and
an anti-Nat, onal.ist stand which is popular with the independent Yunnan-
ese. Governor LU has issued his own currency, has brougtttlarge numbers
of Nationalist troops in the province under his duminance, and has
discouraged the entry of new NationUist forces.
It is not certain that LU's present action was carried out in the
interests of ex Governor LUNG Yun, who, since his 'AT-engineered escape
from house arrest in Nanking, has tiirown his lot with the Communists
end has denounced CHI1.IM, for rt ich he has had the sat .sfeetion of being
termed "a great democrat" in the Communist press. Althoueh LUNG .hoe
continued to interest himself in Yunnanese affairs, it is doubtful it
his actual power in the province Is anywhere as extensive as it once
was and apparently his authority has been largely displaced by LU Hanle.
For this reason, accurate evaluation of the Hong Kong dispatches is
difficult. If, however, LU and his cohorts believe that the Nationalists
cause is doomed, It Is probable that they soon will seek accomodation
with the Communists. However, late disc: aches state that the situation
in Kunming is quiet but tense and that LU Han has departed for Chungking
to confer with CHI. NG Kai-shek, thus indicating that a reconciliation
may still be possible,
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Ford line farorn Hc---Although French press reports of Vietnamese
broadcasts admitting double-dealing in 1946 have not been substantiated
by recent resistance statements, Ho Chi Minh's regime has taken an
unprecsdentedly defiant tone in Its latest propaganda efforts. Timed
to coincide with the first meetings of French delegates and anti Ho
Vietnamese in Saigon to implement the terms of the Bao Dai-Auriol
March 8 Agreement, latest resistance broadcasts appear to be an cttempt
to deny the assertion of Bao Dai's followers that theb?peror, in the
course of his negotiations with the French, has won more concessions
for Vietnam than were embodied in the earlier agreements signed; between
do and the French.
More than the direct "we did better" statement, the Ho regime
now offers no concessions to the French and demands none?_ "Independence"
is defined by the resistance radio as positively excluding domination
of any kind, direct or indirect, economic, financial or military. On
the question of "independence'" within the French Union, regarding which
Ho has been either conciliatory or non-committal in the past, the
resistance radio now takes a strong negative positl.on. "France," the
broadcasts declare, "has definitely sided with world reactionary
imperialism. R That France, "beaten by a former colonial people, living
from hand to mouth on foreign loans, axed too weak even to defend its
own soil, re should presume to "advise" any country is a notion held up
to ridicule.
ryhether the hardening; of Ho's attitude is a result of the appoint-
ment of Pham. Van Dons possibly a Communist and certainly one of the
most forceful and capable of the Vietnamese revolutionaries--to the
posts both of Vice-President and of Chairman of the National Defense
Council is still a matter for conjecture. It is suspected, though
without confirmation, that a factor of equal importance in the harden-
ing of the resistance government's attitude is the record of Communist
victory in China.
Whether this ComMun.ist triumph has brought about a USSR orienta=:
tion in Vietnam is not yet clear. The Vietnam radio has been at some
pains to explain that the certainty of the Republic of Vietnam's eventual
victory long antedates sweeping Chinese Communist Army successes, and
adds:' "the southward advance of the Chinese Liberation Army may have
a favorable bearing upon the Vietnam situation, but it also will create
many difficulttas." Vice-President Phan Van Dong, in turn, has declared
that "crisis has broken out in a number of imperialistic countries,
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while the democratic movement is-gaining strength everywhere'"?.--.%
comment which conforms with the Communist party line.--but has added
at the same time (echoing Ho's favorite maxim) "However, we only
rely on ourselves for winning the war.'" Ho himself has denied having
negotiated with the Chinese Communists in order to get heavy mortars
for his forces, but has admitted that he would accept such weapons if
they were offered him. i onetheless, Ho has txpressad the opinion,,
contrary to ciao Toe-tung's view, that neutrality is both possible and
desirable between the US and the USSR. Meanwhile, there is some
reason to suppose that Ho's present repudiation of the French Union
may cause confusion in Communist circles, in view of the fact tkat,
as recently as 31 August, Radio Moscow endorsed a ;communist-line
publication calling for a Franco-Vietnamese conciliation within the
framework of the French Union.
Move towards minority coalition--The combined Karen -Kachin force which '+B"
recently captured Taunggyi and Lashio, capitals of the Southern, and
northern Shan States in northeastern Burma respectively, is nom,
reported to have occupied Kengtung, capital of the easternmost Shan
state. No effective opposition to this rebel force is likely to
develop in the Shan States in the near future; first, because there
are few, if any, trained. Shan troops and second, Deoause it is questionable
if Shan troops could be used against the Karens and Kachins in any
case. There are only a few Burman troops in the Shaer States and it
is doubtful if many more can be spared from southern Burma.,
Although the first conclusion to be drawn from this Shan States
campaign is that the Karen rebellion is still strong, of more signi-
ficance is the possibility that the campaign indicates the develop-
ment of greater unity among the ethnic minorities in opposition to
the Burmese Government, It Liao been reported by a US Embassy official
on the spot that despite Shan resentment over current Karen operations,
Karen, Kachin and Shan leaders are unanimous in their low opinion of
the Government and desire for greater autonomy. Leaders of these
three peoples are reported to be considering the fornsation of a
Federation of Hill Peoples and the presentation to the Government
of a unified demand for greater self-government, including the recogni-
tion of a separate Karen state. It is entirely possible that a loose
working arrangement along these lines, ar';3 including the Chins, will
be effected. Government rejection of such a united nai..norities' propo-
sal, when and if put forward, would incurr the risk of an increase in
insurrectionary acLivity simultaneous with a sharp decline in military
potential:.
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