PROGRESS OF THE CONSTRUCTION INDUSTRY IN COMMUNIST CHINA 1953-56

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01093A001200080008-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 44
• Document Creation Date: November 9, 2016
• Document Release Date: March 2, 1999
• Sequence Number: 8
• Publication Date: May 15, 1957
• Content Type: IR

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PROVISIONAL INTELLIGENCE REPORT
PROGRESS OF THE CONSTRUCTION INDUSTRY
IN COMMUNIST ' CHINA
1953 :.. 6
M
CIA/RR PR-159
15 Nay 1957-
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
NO CH MM IN CLASS. Cl
ti LEC.I~ASS~FIE~?
.ASS. CHANGED TO: TS 5 C
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This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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PROVISIONAL INTELLIGENCE REPORT
PROGRESS OF THE CONSTRUCTION INDUSTRY IN COMMUNIST CHINA
1953-56
CIA/RR PR-159
(ORR Project l+7.158O)
NOTICE
The data and conclusions contained in this report
do not necessarily represent the final position of
ORR and should be regarded as provisional only and
subject to revision. Comments and data which may
be available to the user are solicited.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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CONTENTS
Page
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 1
I. Introduction . . . . . . . . . . . . . . . . . . . 2
II. Organization of the Construction Effort . . . . . . . . 3
III. Trends in Construction . . . . . . . . . . . . . . . . 7
A. Acceleration of Construction . . . . . . . . . . . 7
B. Reduction of Construction Time . . . . . . . . . . 9
C. Improvement of Designing and Standardization . . . 10
D. Technology . . . . . . . . . . . . . . . . . . . . 11
E. Mechanization and Construction Equipment . . . . . 11
F. Labor Force . . . . . . . . . . . . . . . . . . . 13
IV. Construction in Selected Sectors . . . . . . . . . . . 15
A. Transport Facilities . . . . . . . . . . . . . 15
1. New Trunk and Branch Railroad Lines . . . . . . 15
2. Highways . . . . . . . . . . . . . . . . 20
B. New Housing . . . . . . . . . . . . . . . . . . 21
C. Water Conservancy . . . . . . . . . . . . . . . 23
D. Agriculture . . . . . . . . . . . . . . . . . . 25
V. Cement Industry . . . . . . . . . . . . . . . . . . . 26
Appendixes
Appendix A. Gaps in Intelligence . . . . . . . . . . . . . 31
Appendix B. Source References . . . . . . . . . . . . 35
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Table
Page
Planned and Actual Investments and Costs in the
Construction of New Railroad Lines in Communist
China, 1953-57 . . . . . . . . . . . . . . . . . . . 19
Following Page
Figure 1. Communist China: Principal Construction
Organizations, 1 January 1957 (Chart) . . 2
Figure 2. Communist China: Major New Railroad
Construction Since 1 January 1953
(Map) . . . . . . . . . . . . . . . . 16
Figure 3. Communist China: Construction of Major
Reservoirs Since 1 January 1953 (Map) ? ? 24
Figure 4. Communist China: Cement Production,
Production Capacity, and Operating
Rates, 1952-57 (Chart) . . . . . . . . . 26
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CIA/RR PR-159 S-E-C-R-E-T
(ORR Project 47.1580)
PROGRESS OF THE CONSTRUCTION INDUSTRY IN COMMUNIST CHINA*
1953-5
Summary
During the first 4 years of the First Five Year Plan (1953-57)
the construction industry of Communist China has shown a rapid rate
of growth both in the volume of output and in the variety of projects
handled, although it has often committed blunders and suffered from
inefficient organizational policies and antiquated working methods.
Progress has been considerable in spite of the fact that China has
had to rely greatly on the Soviet Bloc for assistance in the construc-
tion of the large-scale and complex projects.
Since 1953 the organization of the industry has been modified
along more efficient lines (see the chart, Figure 1**). In 1954 its
financial structure was strengthened by the creation of the Peoples
Construction Bank. The importance of construction materials and
urban development led to the creation of the Ministry of Construction
Materials and the Ministry of City Construction in 1956. Waste, con-
fusion, and duplication of effort were reduced by better coordination
and planning.
During 1955 the construction industry cut back on nonproductive
investment*** projects and stressed economies in construction. The
impetus of the effort provided by construction activity in the first
2 years of the First Five Year Plan was somewhat slowed. A quite
discernible acceleration of construction in all sectors was evident,
however, in 1956 -- many large projects were completed a year or more
in advance of scheduled target dates, and many scheduled to be started
in the Second Five Year Plan (1958-62) were begun. Other trends which
developed in the first 4 years of the First Five Year Plan were as
follows: (1) a reduction of construction time on many projects;
(2) an increased use of standardized designs; (3) an improvement in
* The estimates and conclusions contained in this report represent
the best judgment of ORR as of 15 March 1957.
Following p. 2.
*** All references to investment in this report are to investment by
the state.
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new techniques, particularly in the widespread use of prefabrication
plants; (4) increased mechanization; and (5) a better over-all capa-
bility on the part of the labor force. Initial construction targets
for new railroads and highways have been surpassed, as have targets
for construction of new housing, for water conservancy, and for agri-
cultural projects. Even with these achievements, however, construc-
tion has not been sufficient to keep these sectors from lagging be-
hind the needs of the economy. The production of cement, one of the
most important ingredients for most types of construction, surpassed
its goal of 6 million metric tons* for 1957 by 400,000 tons 1 year
ahead of schedule. In spite of this considerable overfulfillment,
there was a shortage of cement throughout 1956.
The construction industry must continue to grow in 1957 and there-
after if Communist China is to fulfill the goal for capital investment
in the Second Five Year Plan, which provides for doubling the 42.74
billion yuan** planned in the First Five Year Plan.
I. Introduction.
Po I-po, currently head of the National Economic Commission of
Communist China, stated in a speech of 1 July 1955: "Basic construc-
tion is the most important factor in the realization of Socialist
industrialization of our State and in the solution of our economic
problems for a long period of time." /*** The emergence of China
as an industrial power in the Far East will depend as in the past to
a great extent on its construction industry.
During the first 4 years of the First Five Year Plan (1953-57)
the construction industry of Communist China has shown a rapid rate
of growth both in the volume of output and in the variety of projects
handled, although it has often committed blunders and suffered from in-
efficient organizational policies and antiquated working methods. Pro-
gress has been considerable in spite of the fact that China has had to
rely greatly on the Soviet Bloc for assistance in the construction
* Tonnages are given in metric tons throughout this report.
Equivalent to US $17.4 billion at an exchange rate of 2.46 yuan
equal to US $i. This Yuan-dollar ratio has been used in computing
all yuan estimates in this report.
For serially numbered source references, see Appendix B.
- 2 -
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SECRET
COMMUNIST CHINA: PRINCIPAL CONSTRUCTION ORGANIZATIONS*
I JANUARY 1957
COMMISSION FOR
NATIONAL PLANNING
NATIONAL ECONOMIC
COMMISSION
NATIONAL TECHNOLOGICAL
COMMISSION
THIRD
STAFF OFFICE
MINISTRY OF
CITY CONSTRUCTION
Central Design
Office
General Planning
Office
Standardization
Office
Mechanization
Office
Construction
Materials Office
MINISTRY OF
CONSTRUCTION MATERIALS
CEMENT, BRICK,
AND GLASS FACTORIES
COMMISSION FOR
NATIONAL CONSTRUCTION
PEOPLE'S
CONSTRUCTION BANK**
General Research
Institute
*This is a tentative and simplified chart of the probable structure. Known
subordinates of the Ministry of Construction and Engineering have, by
analogy, been placed under the new Ministry of City Construction. The
organization of the Ministry of Construction Materials is assumed to be
similar to that of its predecessor, the Construction Materials Industry Con-
trol Bureau under the Ministry of Heavy Industry.
**Under the Ministry of Finance.
MUNICIPAL CONSTRUCTION
ENGINEERING BUREAUS
SECRET
MINISTRY OF CONSTRUCTION
AND ENGINEERING
Central Design
Office
General Planning
Office
Administrative
Office
Standardization
Office
Mechanization
Office
Scientific Research
Office
Construction Materials
Office
Industrial Construction
Designing Office
REGIONAL CONSTRUCTION
ENGINEERING BUREAUS
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of the large-scale and complex projects. Further progress in
1957 and thereafter will be necessary if the sizable goals of the
Second Five Year Plan (1958-62) are to be accomplished. Chinese
announcements indicate that the total amount of investment in capital
construction will double the planned 42.74 billion yuan of the First
Five Year Plan. J
Because the recording and reporting of statistics in Communist
China are still in the formative stage, little aggregative data on
the construction industry have been published. Economic indicators
on construction activity (for example, changes in labor productivity
and construction costs) have not been published in any detail. The
Chinese Communists, lacking previous experience in large-scale con-
struction, have relied greatly on the USSR for assistance at all
levels. Even the planned percentage relationships of the primary
components of capital construction (construction-installation work
and machinery and equipment) in the First Five Year Plan probably
were based on Soviet experience. The Chinese Communists have noted
that in the USSR investment in construction-installation work con-
stitutes about 60 percent, and investment in machinery and equipment
from 30 to 32 percent, of total investment in capital construction. 3
In China, however, there is some divergence from the Soviet model.
The First Five Year Plan stated that about 38 percent of total invest-
ment in capital construction would go to purchases of machinery and
equipment. / From this figure it may be estimated that about 52 per-
cent would go to construction-installation work.
Expenditures for construction materials in Communist China generally
make up 40 percent of the costs of construction-installation work 5/;
transportation makes up 23 percent of such costs 6J; and wages, profits,
and taxes are represented in the remaining 37 percent. The importance
of the materials component can be illustrated by the fact that expendi-
tures on construction materials are planned to be about 20 to 25 per-
cent of total investment in capital construction in the First Five Year
Plan. J In the absence of aggregative indexes, this report is based
on an analysis of the organization of the construction effort, current
trends in major sectors, and the contribution made by construction to
selected sectors.
II. Organization of the Construction Effort.
The national, regional, and local organization of construction ac-
tivity in Communist China has improved considerably since 1953. Before
-that year the construction industry consisted of small private contract-
ing firms and brigades of masons, carpenters, and other skilled artisans
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which went from job to job as one unit. The construction firms had
little experience in large-scale modern building techniques, equip-
ment usage, planning, and organization. 8J In late 1952, concomitant
with the creation of the Ministry of Construction and Engineering,
the central government established state-operated construction com-
panies. The growth of these companies, distributed throughout the
economy on both the national and local levels, was as follows /:
Year
State-Operated
Construction Companies
1953
402
1954
421
1955
530
These state-operated construction companies worked by contract.
There were also numerous self-operated construction companies which
initiated and carried through work on their own installations. The
percentages of the total amount of construction work completed and
of the total labor force in construction in 1955 accounted for by
the state-operated contract construction companies and the self-operated
construction companies were as follows 10/:
Construction Companies
Percent of Total
Labor Force Percent of
in Construction Work Completed
State-operated (contract) 63.6
Self-operated 36.4
66.1
The construction goals of the First Five Year Plan necessitated
more efficient organizational practices at all levels. The Ministry
of Construction and Engineering was further developed in both its
staff and functional aspects. In 1954 a Peoples Construction Bank
and a Commission for National Construction were established. In
1956, two new ministries, the Ministry of City Construction and the
Ministry of Construction Materials, were set up to meet the increased
requirements of these growing economic sectors. L2/ Construction and
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design components of the various industrial ministries were improved,
as was interministerial coordination of construction projects.
Although organization is still unwieldy and in need of stream-
lining -- a result of too-rapid growth of the sector -- it is much
better than that which existed in 1953. The current and future goals
for construction will be met more adequately as waste, confusion,
and duplication of functions are reduced and the organization is more
precisely geared to the construction effort.
The Peoples Construction Bank was established in September 1954
to supervise the allocation of funds for capital construction. Most
of the accounts of various construction units and enterprises origi-
nally held by the Bank of Communications have been transferred to
this bank, which is directly under the Ministry of Finance. 13 The
effect of the change appears to be to create closer high-level con-
trol over investment funds. The new bank has branches in all the
leading cities.
The Commission for National Construction was established in Sep-
tember 1954, probably as a result of the rapidly developing construc-
tion sectors in various ministries. 14 Although its exact functions
are not known, it probably coordinates construction plans of the
various industrial ministries and their subordinate organs; the
numerous local and provincial construction enterprises; and the Minis-
tries of Construction and Engineering, City Construction, and Con-
struction Materials. It also probably assists the Commission for
National Planning in detailed planning of the capital construction
program and in establishing national construction norms.
The Third Staff Office, 1 of 8 staff offices of the State Council,
was established in September 1954. It supervises, coordinates, and
reviews the work of ministries in the construction field as well as
those in the heavy industrial and machine building fields. 15 Along
with the Commission for National Planning and the Commission for
National Construction, it exercises a broad coordinating and super-
vising function over the national construction effort.
The Ministry of Construction and Engineering was originally estab-
lished to handle civil construction such as schools, hospitals, some
housing, and other public structures. In 1955 its 29 companies, which
often worked under contract to other ministries, were able to move into
the industrial construction sphere. / Currently it has several
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regional construction engineering bureaus, which oversee numerous
construction and installation companies. This ministry has central
design and administrative offices, and the counterparts of these are
found under the functional regional engineering bureaus. It also
controls some plants which produce prefabricated construction parts.
Construction matters and problems of various state organs are arbi-
trated and coordinated by this ministry.
The Ministry of City Construction was established on 12 May 1956,,
succeeding the Urban Construction Bureau. / As its name implies,
the new ministry is responsible for urban development, civil and
public utilities construction, and some housing. Its enlarged status
may be a result of the shift of the Ministry of Construction and
Engineering from housing and civil construction to the field of in-
dustrial construction.
The Ministry of Construction Materials succeeded the Construction
Materials Industry Control Bureau of the Ministry of Heavy Industry
on 12 May 1956. L8/ It is responsible for insuring an adequate amount
of construction materials to meet the national construction goals.
In December 1956 there were about 8,000 construction materials enter-
prises and 900 hardware plants in Communist China, with a total of
nearly 400,000 workers and staff employees. 19/
Nearly every state ministry has construction components responsible
for construction in their respective sectors. Some are highly de-
veloped and extensive -- for example, those under the Ministry of
Metallurgical Industry and the Ministry of Railroads. Others are
small and merely subcontract work to elements of the Ministry of
Construction and Engineering or to others. Construction organs of
the Peoples Liberation Army have furthered the construction effort,
particularly in railroad and other construction in peripheral areas
such as the Northwest and Southeast.*
Since 1952 the number of local, municipal, and provincial govern-
ment construction enterprises has increased greatly. At the beginning
of 1955 there were 183 local construction companies, 8 installation
companies, 50 planning and drafting units, and 178 other local enter-
prises in the construction industry. 20 At Wu-han in June 1956 there
were construction units of the central government, of Hupeh Province,
* The names of geographic areas employed in this report are those of
the Chinese Communist Administrative Divisions as of March 1956 (see
CIA map 25333, 3-56).
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and of Wu-han municipality at work. Nearly every central government
ministry was represented; provincial units represented were the
highway, education, health, and broadcasting departments and the
inland shipping, culture, and forestry bureaus; and included among
the municipality units were the water conservancy, physical culture,
labor, and public utilities bureaus. 21 Such a profusion of con-
struction units serving under three jurisdictions at one site points
up the need for efficient organization and coordination. Also under
provincial and local organizational control are the millions of workers
engaged in part-time water conservancy and road maintenance construc-
tion activities.
III. Trends in Construction.
The character of the construction industry in Communist China may
be revealed by analyzing various trends prevailing in 1956 which can
be expected to develop further in subsequent years. Such data support
the estimate of an improved capability in construction in 1956-57
above that which existed in 1953.
A. Acceleration of Construction.
Economy in construction-installation work characterized the
construction industry in Communist China in 1955, and an acceleration
of activity was its chief characteristic in 1956. The metallurgical
industry continued to receive large investments for construction pur-
poses. In 1956, An-shan, the national economic model, planned an
increase of 22 percent in capital construction above the level of
1955. 22 The total area of capital construction to be undertaken
in 195 at Pao-t'ou was planned to be four times that of 1955. 23
Preliminary work continued at Wu-han, and Lung-yen and Pen-ch'i saw
considerable expansion. 2~+ New construction on the iron plant at
Ma-an-shan began in July 1956. 25/ In the Northwest the construction
which began on the Second Sinkiang Iron and Steel Plant would on com-
pletion increase its capacity five times that of the existing plant
and make the province self-sufficient in this respect. / In the
Southwest a new metallurgical complex based on the existing Chungking
Iron and Steel Company was in the design-survey stage. 27
In the machine building industry, 98 construction projects,
including 2 factory buildings at Lo-yang, were scheduled to be completed
ahead of the plan in 1956. 28 Because the needs of economic expansion
require the construction of even more facilities than were scheduled in
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the original Plan, some projects of the Second Five Year Plan are
being moved forward to 1956 and 1957. The Ch'eng-tu Cutting Tools
and Measuring Instruments Plant, designed to be larger than its
counterpart at Harbin, was begun in May 1956. 29 It was not men-
tioned in the First Five Year Plan and probably is an example of one
such plant moved forward. The result of increased construction in
machine building enterprises is that Communist China is now able to
produce motor vehicles, ships, large machine tools, generators, pre-
cision electric instruments, and textile machinery, some of which
it is now exporting to other countries.
The total number of construction completions in the petroleum
industry in the first half of 1956 increased by 71 percent above the
level of the first half of 1955. 30 The number of drilling and survey
teams in May 1956 was roughly 20 times the 1950 figure, and the total
footage of drilling in oil prospecting in 1956 was planned to be 11.6
times the total of the 42-year period from 1907 through 1948. 31 The
largest refinery in Communist China, to be located near Karamai in
Sinkiang Uighur Autonomous Region, is under survey currently. 32
In the electric power industry the volume of capital con-
struction completed in the first half of 1956 increased by 51.8 per-
cent compared with the first half of 1955. 33 Thirty-three projects
for which construction was scheduled to begin in 1956 were begun in
1955, and 10 of the 100 projects under way in 1956 were originally
scheduled to begin construction in 1957-58. 34 Construction and
expansion of 27 thermal and hydroelectric power stations were completed
in the first 11 months of 1956, adding 500,000 kilowatts (kw) to the
total capacity of Communist China.* J In 1957, capacity will be
increased by more than 400,000 kw when some of the 60 plants now
under construction go into operation. 36
In 1956 in the coal industry, 24 mines with a designed capac-
ity of 7.7 million tons were put into operation. 37 Forty other
mines with a designed capacity of 10.8 million tons were planned for
completion in 1957. Four preparation plants will also be built. 32/
The majority of the mines currently under construction are located
in the jurisdiction of nine new coal areas. It is planned that the
majority of these bases will be completed before 1962, and each will
have an annual output of from "several millions to around 10 million
tons." 40
* 'These capacity figures presumably are only for state facilities.
Additional capacity will be added by local and provincial enterprises.
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The Ministry of Light Industry has announced that the con-
struction of new factories has been accelerated so that its obliga-
tions under the Plan can be fulfilled ahead of schedule. In 1956,
work was scheduled to start on 18 major projects originally planned
to be built after 1957. 41 Twenty-five projects scheduled for com-
pletion in 1957-58 are to be finished ahead of schedule. 42 The
output in 1956 of paper, rubber products, salt, medicine, and ciga-
rettes is planned either to approach or to surpass the planned level
for 1957. 43
It was announced that basic construction in the textile in-
dustry in 1956 would be 74 percent higher than in 1955. 44 The
number of plants to be constructed in 1956-57 will be twice the num-
ber constructed in 1953-55. 45 Four of the 16 large mills under
construction currently will go into operation-in 1957, 1 year ahead
of schedule. 46
B. Reduction of Construction Time.
There has been a concerted effort by the Chinese Communists
to shorten the time period of construction for various projects. The
building process could be accelerated with rational planning, design-
ing, and coordination, as well as more efficient use of labor, ma-
terials, and equipment. There is a definite need for this acceleration.
A construction period of 4 years was required for the surveying, de-
signing, and over-all construction of the small-scale Shou-wang-kung
copper mine. 47 A small ore dressing plant in Kan-chou required more
than 3 years to construct, and the construction of a "small" cement
plant also required 3 years. The renovation of a blast furnace
with a capacity of 900 cubic meters (cu m) requires 10 to 13 months
in China, whereas in the USSR the building of a new blast furnace with
a capacity of from 1,000 to 1,300 cu m requires only 4 to 6 months.
The construction of a new thermal electric power station of 50,000 kw
capacity requires 20 to 22 months in China, whereas in the USSR it re-
quires only 18 months. 50 The building of a new fertilizer plant of
50,000 tons capacity requires 30 months in China, whereas in Bulgaria
it requires only 14 months. 51
Some progress already has been made. The construction time
necessary to dig a pair of vertical coal shafts has been reduced by
6 to 12 months, and construction of a chemical fertilizer plant, a
nonferrous metal processing plant, and a high-grade steel plant have
all been reduced, in some instances by 12 months. 52
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Other instances of shortened construction periods are as
follows 53
Construction Time
(Months)
Type of Construction
1953-55
1956
Textile mill (100,000 spindles)
Motor workshops at Lo-yang
Tractor Plant
Installation of two sets
(25,000 kw each) in
18 to 20
6 to 8
13
2
hydroelectric station
24
16
to 18
Large-scale powerplants
16 to 18
12
to 14
Medium-scale powerplants
14
Less
than 12
C. Improvement of Designing and Standardization.
The State Statistical Bureau recently announced that Communist
China has established more than 140 designing organizations, having
more than 100,000 employees. 54 Less than half of this number, how-
ever, are trained technicians.
The national construction norms for construction and installa-
tion projects adopted 1 May 1956 indicate that designing work is be-
coming more efficient. 55 As early as 1951 the Chinese Communists
began drawing up standard designs for civil construction. In 1953 and
1954, housing built in the Northeast with standard designs accounted
for 75 percent and 88 percent, respectively, of new housing constructed.; 56
The 1956 national norms cover industrial as well as civil construction.
From 1954 through 1956, approximately 40 percent of the blue-
prints designed were used on more than 1 project. 57 The reuse of
blueprints (the Ch'eng-tu Cutting Tools and Measuring Instruments Plant
is using the Soviet-designed blueprints previously used at its Harbin
counterpart) and existing structures and machinery, plus progressively
better designing, has contributed to an increased over-all efficiency.
Even with the increased capability in designing there still re-
mains ample room for improvement. At least 10 percent of all the blue-
prints in the period 1954-56 were completed behind schedule, and many
were returned to the designers for correction of imperfections. 58
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D. Technology.
Along with improvement in designing there has been consider-
able technological progress in the construction industry in Communist
China. Prefabricated concrete plants, chiefly of a temporary type,
have been established at all the major construction sites. These
plants produce reinforced-concrete and concrete components for speedy
assembly at the site. This process reduces costs and saves materials.
Plans are being proposed currently which would increase the number of
such plants throughout the country. Although there are permanent
prefabrication plants at An-shan, Chang-ch'un, Harbin, Fu-la-erh-chi,
and Pao-t'ou, the trend toward construction of temporary plants may be
expected to continue because of the temporary need for prefabricated
products at a given site and also because temporary plants with the
same capacity as permanent plants can be built at half the cost of
the latter. 59
Other new techniques have been widely heralded and are being
introduced.. The use of bamboo-instead of steel rods in reinforced
concrete, which saw widespread use in 1956, was reported to have re-
duced reinforcement costs 45 percent.* 60 Bamboo substituted for
wood in roof supports is gaining acceptance. In erecting electric
transmission lines, reinforced-concrete towers have been substituted
successfully for steel towers. In 1956 this substitution was planned
to effect a saving of 7,000 tons of steel. 61 61/ Newly designed steel
frames have replaced conventional frames for certain types of build-
ings, with a consequent saving of steel. 6)L2/ In some Karamai test
wells a loess-and-mud paste was used instead of reinforced concrete. 63/
Finally, cinders as a substitute for sand have been used satisfactorily
in making concrete. 6/
E. Mechanization and Construction Equipment.
More and better construction equipment has permitted a reduc-
tion of building costs and the completion of a larger volume of work
in Communist China. The increase in the number of important types of
construction equipment available to the state-operated contract con-
struction companies was as follows 0,
* See IV, B, p. 23, below.
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Equipment
1953
1954
1955
Cranes, derricks, and the like
513
955
1,379
Power shovels
45
112
159
Concrete mixers
1,676
2,249
2,1+43
Dump trucks
3,237
5,238
5,871
In 1952 the An-shan Iron and Steel Construction Company had only 551
sets of mechanized equipment, but by October 1955 this figdre had
risen to 5,600. 6/ By the latter date, work in concrete mixing was
entirely mechanized -- 33 percent of the earthwork was done mechan-
ically compared with 13 percent in 1952, 84 percent of the lifting
work was done by cranes, and 58 percent of the transport facilities
were operated mechanically. 67 It was planned that 5.4 million cu m
of earthwork would be moved by machinery in the entire country in
1955 compared with 3 million cu m moved by machinery in 1954. 68
Although An-shan is not typical of most construction sites,
it is likely that it will be used as a model for others to emulate.
Improved equipment and a better equipment utilization rate are illus-
trated in the Chinese Communist announcement that the utilization
rate of an excavator with a capacity of one-half cubic meter per day
had increased by October 1955 more than 15 times above the level of
1952. 69/
Domestic plants are now turning out construction equipment in
increasing numbers. Among these are excavators, bulldozers, cranes,
rollers, scrapers, autoloaders, and derricks. / In early 1956,
An-shan was designing more than 40 light construction machines for
use in places where regular equipment could not be used. 71 Even
with the increased production of construction equipment, the supply
in 1956 was inadequate for construction requirements.
The relatively low rate of utilization of construction equip-
ment is almost as formidable a problem as is the inadequacy of the
existing stock of such equipment. In 1955 in the Ministries of Con-
struction and Engineering and of Heavy Industry the rate of utiliza-
tion of major types of construction equipment was generally less than
50 percent. LV As the number of trained workers increases, the utili-
zation rate of equipment will rise, but at present it remains one of
the chief problems confronting the industry.
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F. Labor Force.
Because of inconsistencies between reports and official
announcements in Communist China, little definitive intelligence
emerges from an analysis of available information on the labor
force in construction. The most reasonable listing of the growth
in numbers is as follows 74
Year
Construction Labor Force
(Million Workers)
1951
0.60
1952
1.02
1953
1.54
1955
1.60
1956*
1.80
These figures do not necessarily represent a stable construc-
tion industry. Those workers engaged in producing construction ma-
terials and the millions of workers in construction on water con-
servancy and military projects are not included in the totals. Tempo-
rary workers make up a sizable proportion of the whole. In 1952-53,
approximately 70 percent of the construction workers in the Northeast
were hired on a temporary basis. In January 1953, Chia T'o-fu,
then a vice-chairman of the National Committee on Financial and Eco-
nomic Administration, announced that recruitment of permanent con-
struction workers would be temporarily suspended because of confusion
resulting from competition among various agencies in recruiting workers.
Chia T'o-fu said that in the future permanent construction workers
would be limited to skilled or semiskilled artisans, totaling 40 to
50 percent of the construction labor force. 1 Laborers and others
would be hired on a temporary or contractual basis. His words appear
to be borne out by figures as of early 1956 for the An-shan Iron and
Steel Construction Company and the Liaoning Municipal Construction
Bureau, which had proportions representing temporary workers of 30
to 40 percent and 50 percent, respectively. 77
* Wang Ho-shou, Chairman of the Commission for National Construction,
announced in June 1956 that the number of workers engaged in construc-
tion and installation work was 1.41 million. This figure, however,
does not include staff and administrative workers. Po I-po's figure
(in the tabulation) is assumed to include these persons.
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Additions to the construction labor force are being made at
a rapidly increasing rate. In 1953-54, more than 4,300 architects,
engineers, and technicians graduated from colleges and joined the
Ministry of Construction and Engineering. 78 In 1955, construction
began at Sian on the largest independent college of architecture and
civil engineering in Communist China, which was to have a student
The number of students studying engineering in
body of 8,000. 79
colleges and universities was as follows ~Y:
Enrollment
(Thousand Students)
Highest before 1949
27.6
1949/50
30.3
1950/51
38.5
1951/52
48.5
1952/53
66.6
1953/54
80.1
1954/55
95.0
1955/56
109.6
In 1956, roughly 62,890 new students, 37.7 percent of the
total new enrollment, were expected to enroll in engineering courses
in colleges. ? _On-the-job training courses at An-shan, Pao-t'ou,
Wu-han, and other major sites are contributing some measure of skill
to the construction force. Leading cadres are sent to the USSR for
study in the best institutions of that country.
The construction worker, as he has gained skill and techniques,
has become more productive. Construction and installation workers en-
gaged in industrial capital construction were scheduled to increase
their labor productivity by 72 percent (an average of about 11 percent
per year) from 1953 to the end of 1957. L2/ Although there is a lack'
of information on labor productivity, scattered references indicate
that progress is being made. For instance, in 1955, construction
workers at An-shan planned to raise their labor productivity 90 per-
cent above the level of 1952. 83 Labor productivity in construction
and installation enterprises was 27 percent higher in 1954 than in
1953 and 17 percent higher in 1955 than in 1954. 85 Recently
it was announced that the labor productivity of construction and in-
stallation workers under the Ministry of Construction and Engineering,
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had increased 67 percent above the level of 1953. 8/ Increased worker
training coupled with shortened construction periods and reduced con-
struction costs indicates that labor productivity in industrial construc-
tion probably will meet its Five Year Plan goals.
IV. Construction in Selected Sectors.
A. Transport Facilities.
1. New Trunk and Branch Railroad Lines.
a. Performance in 1953-56-
The Chinese Communists have surpassed most of the
aggregate annual goals as well as the First Five Year Plan goals
for construction of new railroad lines* (see the map, Figure 2**).
This is also true of goals for individual lines. In terms of goals,
,construction of new lines has been and probably will continue to be
one of the strongest areas of the construction sector. This is
because of (1) the high priority given railroad construction by the
Chinese Communists and (2) the high return on the funds invested in
railroad construction compared with most industrial construction
projects.***
Under the First Five Year Plan the original goal for
the construction of new lines was 4,084 kilometers (km). 87 Annual
performance has been as follows i8j:
Year
Completion of Tracklaying
(Kilometers)
Increase Above the Level
of the Preceding Year
(Percent)
1953
589
23
1954
831
41
1955
1,222
47
1956xxxx
1,700
40
Total
4,342
* The phrase construction of new railroad lines as used by the
Chinese Communists includes both new trunk and new branch lines but
excludes double tracking and other improvements.
** Following p. 16.
*** The required mixture of construction machinery and labor (both
skilled and unskilled) is more easily achieved in railroad construction
than in most industrial construction.
**** Announced to be "over 1,700 km."
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Although they have been successful in fulfilling
earlier goals, the Chinese Communists have lagged considerably in
meeting revised goals. In early 1956 the original First Five Year
Plan goal of 4,084 Ion was revised upward to 7,592 km. 8/ Several
revisions of the 1956 Plan, however, reduced the planned length of
lines totaling 2,136 km to "about 1,800 km" 20 and indicated that
construction of new Lines was not proceeding according to the re-
vised Plan. The 1957 Plan called for the construction of only
600 km of new lines. 91 This significant reduction was prompted
by the need to alleviate congestion on several key lines and to
raise the freight-carrying capacity of existing lines and by a
nationwide shortage of critical construction materials. If con-
struction is kept at this planned level in 1957, new lines con-
struction in the period of the First Five Year Plan will total about
5,000 km, in contrast to the original planned total of 4,084 km.
Although accelerated work on some lines has caused
defects (a notable example is the Pao-chi - Ch'eng-tu line /),
the Chinese Communists have greatly improved their techniques and
standards of railroad construction. The USSR has aided materially
in this process. Standardized plans and designs, better organiza-
tion at the site, advanced work methods in excavation and blasting,
and fuller mechanization in tracklaying have given the railroad con-
struction force a much greater capability than that which existed
in 1953. 93
b. Construction of Individual Lines.
By the end of 1956 the following railroad lines,
for which the bulk of the work was carried out in the First Five
Year Plan, were completed in Communist China 94/:
Railroad Line Terminals
Total Length
(Kilometers)
Year Completed
Chi-ning - Erh-lien
337
1955
Feng-t'ai - Huai-lai
106
1955
Hsiao-shan - Ning-po
140
1956
Lan-ts'un - Chefoo
183
1955
Li-t'ang - Fort Bayard
314
1955
Pao-t'ou - Pai-yu-no-po
148
1956
Ying-t'an - Amoy
700
1956
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The 678-km Pao-chi - Ch'eng-tu line, nominally com-
pleted in 1956, is undergoing general repairs to correct defects
caused by accelerated construction and landslides. The remedying
51 Tracklaying on
of these defects should be completed in 1957.
the 2,400-km Trans-Sinkiang Railroad has progressed to the Kansu-
Sinkiang border area, roughly 1,250 km from the Sino-Soviet border.
It is estimated that tracklaying will be completed in 1958. 7!./ Other
important lines which will be completed in 1957 or during the Second
Five Year Plan follow 98/:
Total Length
(Kilometers)
Chan-tien - Chi-hsien
363
Ch'eng-tu - K'un-wing
1,060
Ho-chih - Kuei-yang
440
Hunan-Kweichow
85o
Lan-chou - Pao-t'ou
1,100
Lan-chou - Tsinghai
1,400
Nan-p'ing - Ma-wei
196
Nei-chiang - K'un-ming
789
Pi-se-chai - Ho-k'ou
177
Szechwan - Kuei-yang
340
Tu-shan-tzu - Sharasume
500
Turfan-Kucha
600
Wu-han - Ta-yeh
83
c. Problems and Prospects.
The First Five Year Plan of Communist China stated
that the Ministry of Railroads was to invest 41.7 percent (or 2.36
billion yuan) of its total capital investment in the construction
of new lines. 99 The actual portion going to the construction of
new lines in 1953-55 was 47.8 percent.* 100 In March 1956, T'eng
Tai-yuan, the Minister of Railroads, stated that total investment
in capital construction for the railroad industry would be increased
38.3 percent above the original goal of 5.67 billion yuan to a total
of 7.84 billion yuan. 101 He estimated that the original planned
investment of 5.67 billion yuan would be reached by 31 March 1957. 102
* It is assumed that this percentage is an average of the 3 years
rather than the level reached at the end of 1955.
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Although data on costs of constructing new railroads
are insufficient, it is clear that cost reductions have been and prob-
ably will continue to be made in the First Five Year Plan. Analysis
before the announcement of the kilometrage planned for 1957 indicated
that feasible reductions in costs would not be sufficient to permit
the achievement of the revised goal of 7,592 km within the limits of
the 38.3-percent increase in total capital investment in railroads --
the revised goal would have to be underfulfilled or could be achieved
only at the cost of increasing the investment for construction of new
lines. Planned and actual investments and costs in the construction
of new railroad lines in Communist China in 1953-57 are shown in the
table.*
The estimated actual cost per kilometer for construc-
tion of new lines** in 1953-55 was 564,000 yuan, which is a reduc-
tion of about 3 percent from the estimated average cost of 578,000
yuan originally planned. for the 5-year period. 10'3/ The attainment
of the estimated average cost of 494,000 yuan necessary to achieve
the goals of the revised Plan (see the table), however, would require
a 15-percent reduction from the estimated average cost set forth in
the original Plan. In view of performance in the first 3 years, such
a reduction over the 5-year period appears improbable. This is borne
out by the following two factors: (1) the average cost in 1956-57
would have to be reduced 19 percent compared with the estimated average
cost in 1953-55 if the average cost over the 5-year period is to be
reduced to 494,000 Yuan per kilometer, Xxx 104 and (2) the 2,642 km
constructed in 1953-55 were achieved at an estimated cost per kilometer
of 564,000 yuan rather than the 494,000 Yuan planned. This is shown
by the fact that the planned portion of total capital investment in
railroads going to construction of new lines, 41.7 percent, had to
be raised to 47.8 percent in order to achieve the kilometrage goal. 105/
The drastic cutback in construction of new lines in
1957 indicates that the planned 38.3-percent increase in capital
The table follows on p. 19.
Hereafter the cost per kilometer of new lines is referred to as
simply cost.
*** According to the revised Plan, estimated investment in the con-
struction of new lines is to be 3.75 billion yuan. In the first 3
years an estimated 1.49 billion yuan was invested, leaving 2.26 billion
yuan to be expended in 1956-57. Of the revised kilometrage goal of
7,592 km, 4,950 km remained for completion in 1956-57. The achievement
of this kilometrage with an investment of 2.26 billion yuan would re-
quire an average cost of 457,000 yuan per kilometer in 1956-57, which
would represent a reduction of 19 percent from the average cost estab-
lished in 1953-55.
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investment for the railroad industry has itself been revised down-
ward.* Because the average cost would have been less than 564,000
yuan per kilometer, more than 2,300 km of new lines could have been
built in 1957 within the limits of the 38.3-percent increase in
capital investment in railroads.** Thus about 6,660 km -- contrasted.
with the 5,000 km presently planned -- could have been built in the
First Five Year Plan. The fact that new lines construction has been
reduced indicates that the Chinese Communists have renounced their
option of a large overfulfillment of kilometrage in favor of improving
existing lines. The apparent cut in the total investment in rail-
roads follows the nationwide move to cut 1957 investment as a result
of materials shortages. Also, because the growth of the railroad
sector has exceeded that of every other economic sector since 1953,
it is likely that funds previously destined for railroads have been
cut back in favor of a closer balance in sectoral growth rates.
The Second Five Year Plan calls for the construction
of 8,000 to 9,000 km of new lines while at the same time carrying for-
ward an intensive program of rehabilitation of existing lines. 108
Although new lines construction in 1957 will be kept at a minimum,
the recent completion of aerial surveying of 2,000 km and the initia-
tion of aerial surveying of another 3,000 km indicate a continuation
of large-scale activity in railroad construction. 109
2.. Highways .
Construction of highways in Communist China has taken
place chiefly in the coastal and peripheral areas. Statistics on the.
construction of highways are ambiguous and confusing. The Chinese
Communists distinguish among the following 4 types of overland trans-
portation routes: (a) motor highways of 6 categories, depending on
the traffic they are capable of accommodating; (b) secondary highways;
(c) cart roads; and (d) pack transport roads. 110
* The announcement concerning the reduction in construction of new
lines in 1957 implied that about 35 to 40 percent of total capital
investment would be allocated to construction of new lines. To build,
only 600 km of new lines with this portion -- roughly equivalent to
the original share of 41.7 percent for the 5-year period -- strongly
suggests that a substantial reduction in total capital investment in
railroads has been made.
** Assuming that the 47.8-percent portion of total investment allo-
cated to construction of new lines in 1953-55 remained unchanged.
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The First Five Year Plan provided that 10,100 km of motor
and secondary highways were to be constructed, restored, or repaired
with state funds. 111 Of this total, motor highways amounted to
7,782 km, out of which new construction projects were to total
4,866 km and the remainder was to be in restoration-repair projects. 112
Local government organs were to provide for the construction of
15,000 km of secondary roads in the 5-year period, of which 6,409 km
were to be new projects. 113
In mid-1956, Li Fu-chun, a vice-premier of the State
Council, reported that state-financed highways constructed or re-
paired in 1953-55 totaled 9,053 km. 114+ In addition, 4,611 km were
planned for 1956. 11 The achievement of this planned kilometrage
in 1956 would represent an overfulfillment of the Five Year Plan by
35 percent in 4 years. In 1953-55, 13,000 km of highways (predominantly
secondary) were constructed or restored by local government organs with
provincial funds and corvee labor. 116 In March 1957 it was announced
that 9,271 km of new motor roads would be completed by the end of 1957 --
an increase of 91 percent above the 4,866 km planned for the period
1953-57. 117
In 1956 it was announced that 560 counties in Communist
China had no highways. 118 The Second Five Year Plan, in which
15,000 to 18,000 km of motor highways are to be constructed or re-
stored (nearly double the planned amount in the first Plan) has as
its aim the linking up by motor and secondary highways of all the
county seats in the country. 119/
B. New Housing.
An economy cannot maintain sustained growth unless at least
a minimum standard of living is made available to the labor force.
On the basis of the First Five Year Plan of Communist China, which
called for the construction of 46 million square meters (sq m) of
new housing, performance thus far has been impressive. The actual
performance in 1952 and in the first 4 years of the Plan was as
follows 120/:
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Year
Housing Constructed*
(Million Square Meters)
1952
6.5
1953
12.0
1954
13.0
1955
14.0
1956
20.0
Total
59-0
Even with this excellent performance, however, the problem
of providing adequate housing both in point of quantity and quality
continues to harass the Chinese Communist planners. The failure of
housing construction to keep pace with the growth of the economy as
a whole indicates that the goals for housing construction initially
were pegged too low.
A Chinese broadcast of 25 June 1956 noted, "The shortage of
residential houses is a very serious problem for workers at present." 121
A week before, Li Fu-chun stated that the construction of living
quarters was "somewhat neglected" in 1955. 122 Such a statement re-
garding a year in which planned housing construction was overfulfilled
by 3 million sq m directly implies that the goals established by the
regime have been so low that, although they are overfulfilled, the
housing problem is not being satisfactorily solved. It is estimated
that, in mid-1956, 900,000 families engaged in mining, forestry, new
industry, and geological surveying were without adequate housing. 123
The accomplishment in 1956 of 20 million sq m, 6.9 million sg m
above the planned 13.1 million sq m, does not solve the existing housing
shortage. 124 The inadequacy of the 1956 goal is exemplified by the
situation in Shanghai. By 1956 the population had risen from a 1937
figure of 3.8 million to more than 6 million. 125 During World War II,
part of the existing housing stock was destroyed, and little was re-
built. Since 1949 a total of approximately 2.5 million sq m has been
constructed by the state and by the people themselves. 126 The 1956
Plan called for 280,000 sq m -- enough to provide housing for only
37,000 persons -- to be constructed with a total investment of 15 mil-
lion yuan. 127 With the increase in population of more than 2 million,
It is probable that some capital repair is included in these amounts.
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there are, by Chinese Communist admission, more than 1 million persons
in Shanghai at present without adequate housing. 128
Various measures have been instituted to help solve the prob-
lem. Surplus funds of various ministries as well as state and trade
union loans to individuals will help to alleviate the situation. 129
Also, the proposal by the Ministry of Construction and Engineering
that bamboo be used as a substitute for steel in reinforced-concrete
house construction, thus reducing costs by saving steel, probably
aided in substantial overfulfillment of the 1956 Plan without any
increase in the state funds allocated to housing construction. 130
The North China, Central-South China, and Northwest China Construc-
tion Engineering Bureaus planned to use bamboo-reinforced concrete
instead of steel-reinforced concrete in 400,000 to 500,000 sq m of
civil construction from June through December 1956. 131 In the
future this type of construction can be expected to increase. Even
with these measures, however, adequate housing will remain a problem
for the indefinite future.
C. Water Conservancy.
Construction activity using chiefly hand labor has been im-
pressive in the period of the First Five Year Plan. In order to
utilize better the water resources of Communist China, construction
targets were enumerated for the Huai, Yellow (Huang), and Yangtze
Rivers, together with their tributaries. The following projects have
been completed (see the map, Figure 3*):
Huai River: The large Fo.-tzu-ling, Mei-shan, Po-shan,
and Nan-wan reservoir dams have been completed, and construction
has been started on the Hsiang-hung-t'ien and Mo-tzu-t'an reser-
voirs. 132 By August 1955, more than 3.9 billion cu m of earth-
work were moved in constructing these reservoirs and 15 associated
flood detention projects, 160 gates and culverts, and 6,303 km of
channel and in repairing 2,840 km of dikes. 133
Yellow River: The first phase of construction of this
long-range project will be completed in 1967- About 46 dams, many
reservoirs, and 2 hydroelectric power stations, each having a capacity
of 1 million kw, are planned. 134 By mid-1955, more than 130 million
cu m of earthwork were moved and 1,800 km of dikes repaired. 13
The site for the Liu-chia dam has been selected, and work is expected
to start in 1957. =3:1 In February 1957 the huge San-men Gorge project
was scheduled to come under construction. 13V
* Following p. 24.
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Flood diversion projects such as the Ching-chiang project on
the Yangtze River, the Kuan-t'ing reservoir and a flood escape
channel 40 km long on the Yung-ting, and the Shih-men reservoir in
Hupeh Province are other examples of major construction projects
successfully completed before the end of 1956. 138 The large
Ta-huo-fang reservoir currently under construction near Fu-shun 139/
on completion will help to prevent flooding in that area.
The total physical accomplishment in construction for water
conservancy in Communist China in 1953-55 was as follows 140/:
Year
1953
1954
1955
Total
Earthwork
Masonry
Concrete
1,000.0
N.A.
N.A.
650.0
8.79
0.19
1,400.0
14.0
0.6
3,050.0
22.79
0-79
The total state allocation for water conservancy was 770 mil-
lion yuan in 1950-52 and was planned to be 2.49 billion yuan over
the period of the First Five Year Plan. Actual (1953-55) and planned
(1956) allocations were as follows 141 :
Year
Investment*
(Million Yuan)
1953
376
1954
219
1955
402
1956 (Plan)
844
Total 1,841
The First Five Year Plan called for an expansion of the irri-
gated area by 4.8 million hectares. The increase in irrigated area
in the first 4 years was as follows 142
* The investment for housing construction is not included.
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ON.
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Year
Irrigated Area
(Million Hectares)
1953
0.61
1954
0.78
1955
1.26
1956
10.00
Total
12.65
The irrigated area in 1956 was double the irrigated area in
the preceding 6 years. 143 Thus the First Five Year Plan goal of
4.8 million hectares was fulfilled more than 250 percent in the
first 4 years of the Plan. This increase is so large that it must
be assumed that drainage improvement and well projects are being
included in the totals. Most of the construction work involved in
irrigation is small scale and is done by the peasants themselves.
Much of it, however, is of a temporary nature and requires continuing
maintenance.
D. Agriculture.
Construction for agriculture in Communist China has not been
restricted to water conservancy alone. In organizing mechanized state
farms and machine tractor stations, investment has been channeled into
the sector for the construction of garages, granaries, repair shops,
powerplants, dormitories, and offices. Because of the large amount
of capital required, the number of these units has not been large. 144
Their growth indicates, however, an increasing tendency toward col-
lectivization in the countryside. The growth of these agricultural
functions is shown as follows 145/:
Total Tractors
(15-Horsepower
Units)
Total
State Farms
Total
Machine
Tractor
Stations
First Five Year
Plan
8,416
91
194
1953
1,627
N.A.
N.A.
1954
3,013
97
89
1955
5,216
106
138
1956 (Plan)
11,912
152
275
1957 (Plan)
N.A.
N.A.
437
End-of-year totals.
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By the end of 1956 the 275 machine tractor stations were to
service an area of 1.1 million hectares, or 5 times the area of
1955. 146 The mechanized state farms serviced 190,000 hectares in
1954 and 270,000 hectares in 1955 and were planned to service 510,000
hectares in 1956. 147
The Soviet Aid Friendship State Farm in Heilungkiang, although
larger than most state farms, provides information on construction
activity in this sector. By the end of 1955, permanent buildings with
a total floorspace of 45,000 sq m had been built. 148 The Plan for
1955 called for 60,000 sq m of floorspace to be constructed, or one-
half of the total basic construction (presumably 120,000 sq m of
floorspace). 14 Construction in 1955 was to require 40,000 cu m
of stone, 9 million bricks, 9,000 cu m of wood, and 80 motor trucks. 1,50/
V. Cement Industry.*
The cement industry, which produces one of the most important
inputs of construction, is fundamental to the industrialization pro-
gram of Communist China. The growth in the production of cement pro-
vides a rough index to the growth of the over-all construction program.
Annual production in the first 4 years of the First Five Year Plan
was as follows 152 (see the chart, Figure 4**):
Production
Year (Million Metric Tons)
1953 3.9
1954 4.6
1955 4.5
1956 6.4
Much of the addition to production capacity for 1949-54 was ob-
tained by investment in the rehabilitation and reconstruction of
facilities fairly well developed before World War II. The relative
ease with which production capacity was expanded by rehabilitation
* The basic study on this subject is source 1 1 . This section
is a synthesis of that report in which figures up to the end of
1956 have been incorporated.
X Following p. 26.
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SECRET
COMMUNIST CHINA
CEMENT PRODUCTION, PRODUCTION CAPACITY,
AND OPERATING RATES,1952.57
(Millions of metric tons)
SECRET
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in 1949-52 and the rapid improvement in the rate of utilization of
capacity in 1953 and 1954 were primarily responsible for the rapid
increase in the production of cement from 660,000 tons in 1949 to
4.6 million tons in 1954. jL3j
The pattern for 1955-57, however, is one in which the construc-
tion of new facilities predominates, thus requiring greater expendi-
tures of time and investment funds per ton of increase in production
capacity. The First Five Year Plan called for the production of
6.0 million tons of cement in 1957. In 1956, 6.4 million tons were
produced. 154 Further increases in the rate of utilization of
capacity, from an estimated 84 percent in 1954 to a probable 89 per-
cent in 1956, have aided in this overfulfillment 1 year ahead of
schedule. 155 The achievement in 1956 implies that the increase
in annual production capacity planned by the industry under the
First Five Year Plan (2.36 million tons above the 1952 production
capacity) may already have been reached. 156/
The drop in production of cement from 4.6 million tons in 1954
to 4.5 million tons in 1955 was the result of reduced requirements
or cement under the economy program in the last half of 1955. The
Chief of the Construction Materials Industry Control Bureau announced
in early 1956 that the total production plan in 1955 had been reduced
by nearly 25 percent to bring production more closely in line with
actual requirements. 157 Thus the industry probably could have pro-
duced about 5.5 million tons in 1955.
Li Hsien-nien, a vice-premier of the State Council, in his 1956
Budget Report called for a 40-percent increase in the production of
cement in 1956 above the level of 1955. 1 8 Even in surpassing this
goal (the increase was actually 42 percent, the domestic supply of
cement in 1956 failed to keep pace with industrial requirements for
it. From 1953 through 1955 the development of the cement industry
exceeded or at least kept abreast of industrial expansion. But in
1956, a year of accelerated construction, widespread shortages of
cement became noticeable. The 42-percent increase in production in
1956 over 1955 fell under the anticipated increase in demand of 59
percent. l59/ It appears probable that a part of the shortage re-
suited from exports to the USSR. In 1956 a threatened shortage of
more than 1 million tons of cement at construction sites in the USSR
was announced. 160 Communist China -- adequately endowed with the
natural formations necessary for the production of cement -- probably
has helped to make up this deficit, especially in the eastern regions
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of the USSR. Such exports during the present period of rapid ex-
pansion of construction activity put an additional burden on the
cement industry.
Schedules for cement projects were accelerated in 1956 in order
to meet requirements. In the first 8 months, capital construction
in the cement industry was 47 percent greater than in the same period
of 1955. 161 In addition to the Kung-yuan plant, which was recon-
structed from a pre-World War II annual capacity of 170,000 tons to
one of 450,000 tons, 3 other plants are being expanded, and 6 new
plants are being constructed. 162 Three of the new plants probably
will go into full operation before the end of 1957 163 and the re-
maining 3 new plants probably in 1958.
Four of the 6 new plants can be identified as follows 164 J:
Plant
Estimated Annual Capacity
(Metric Tons)
K'un-ming
300,000
Ta-t'ung*
480,000
Urumchi
150,000
Yung-teng*
450,000
There have been reports which stated that plants are being constructed
at Pao-t'ou and Hsiang-t'an. 166 A report of 3 January 1957 states
that construction has begun on a plant in western Szechwan with a
planned output 3 times that of the cement plant at Chungking, or an annual
production of more than 300,000 tons. 1 This plant, which is probably
not one of the six mentioned above, is scheduled for completion in
1959. 168 Construction of another new plant to be located near Sian
with a planned production capacity of 68o,ooo tons of "high quality"
cement annually has begun. 169/ Still another plant is scheduled to be
built at Ku-shan in Anhwei Province. 170
The Second Five Year Plan proposals announced at the Eighth Party
Congress put the 1962 production goal of cement at 12.5 million to
14.5 million tons, more than twice the production originally planned
for 1957. 171/ This goal parallels the proposal to double investment
* The Ta-t'ung plant began trial operation in December 1956, and the
Yung-teng plant in reportedly near completion. 165
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in capital construction during the period of the Second Five Year
Plan. Although the goal of 12.5 million to 14.5 million tons is
within the capabilities of the cement industry, it may be short
of planned requirements. The rate of utilization of existing
capacity is rapidly approaching the optimum, and new plants must
be constructed and those currently under construction must be
expanded if even the lower range of the goal is to be met.
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S-E-C-R-E-T
APPENDIX A
GAPS IN INTELLIGENCE
1. Construction Portion of Investment in Capital Construction.
Aggregative indexes of the volume of construction put in place
in Communist China are not available. Lacking these, it has not
been possible to determine precisely the relative share of construc-
tion-installation work and machinery and equipment in capital invest-
ment.
2. Construction Costs.
Very little aggregative cost data have come to hand.- Because of
this lack of information, changes in construction costs from 1953
through 1956 could not be assessed accurately.
3. Physical Volume of Construction.
Although sporadic announcements have been made on construction
of buildings in terms of square meters of floorspace constructed, the
data have been neither systematic nor thorough. The same holds true
for excavation work in terms of cubic meters. An estimate of the
physical volume of construction in various sectors using either of
these gauges, even if data were available, would still be tenuous
because of the possibility of repair and maintenance figures being
included in the totals. Such data would be of value, however, even
without a detailed breakdown.
4. Organization of the Construction Effort.
The internal organization of the principal construction organs
is not known. Operating procedures and jurisdictions have not been
announced, and the lines and limitations of state control are known
only generally. Considerable information is needed before more than
a tentative charting of the effort can be made.
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S-E-C-R-E-T
Reduction of Construction Time.
There is great ambiguity in the reports on construction starts
and completions. Some officials treat preparatory work as precedent
to the start of formal construction; others do not. On some projects,
substantial construction. is performed before it is announced publicly.
On others the date that a plant goes into operation is often reported
as the date on which construction was completed. The discrepancies
in time are often so confusing as to suggest that the root cause is
poor reporting practices rather than designed misrepresentation.
Because of these factors, the exact construction time for many projects
cannot be ascertained, and comparisons cannot be made with construction
periods of similar plants.
6. Labor Force.
Data on the size of the labor force in the construction industry
are scarce. Information on the ratio of permanent to temporary,
skilled to unskilled, and staff to manual workers in the construction
labor force is not available in any depth. Details on labor productivity
in the industry are likewise lacking.
7. Construction of New Railroad Lines.
Information on the actual proportion from year to year of capital
investment for railroads which is represented by construction of new
lines, as differentiated from renovation and repair and rolling stock,
is not available. Data on the construction of new lines are uneven
and often misleading. Goals, revisions, and percentage increases an-
nounced at different times have often been contradicted by coincident
or subsequent announcements.
8. Construction of Highways.
The profusion of types and classes of highways and the ambiguity
of official claims make analysis on construction of highways difficult.
Extremely few usable data are available.
9. New Housing Construction.
Official announcements do not separate new housing constructed
privately from that constructed by the state. The amount of repair
in total square meters constructed has not been indicated. Present
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housing stocks of major cities remain unknown. Information on living
space per person is not consistent. A breakdown of the ratio of dor-
mitories to single family units has not been made.
10. Construction for Agriculture and Water Conservancy.
Data on the agriculture and water conservancy sectors are sparse
and, when available, are of a descriptive form not readily usable as
a guide with which to gauge the contribution made by construction.
11. Additions to Cement Plant Capacity.
The proportion of additional capacity furnished by new construction
and reconstruction of cement plants as opposed to increased labor pro-
ductivity, higher utilization rates, and technological progress is not
known. Very often Chinese Communist reports do not differentiate be-
tween capacity, either immediate or ultimate, and output -- which
only increases the difficulty. Also, much additional information is
required on the capacity and output of individual plants, especially
the smaller ones.
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S-E-C -R-E-T
APPENDIX B
SOURCE REFERENCES
The quantity and quality of reporting on Communist China has im-
proved considerably in the past year. To the extent that such report-
ing may in the future be more sharply focused on gaps such as those
cited in Appendix A, further improvement in the intelligence product
may be expected.
Evaluations, following the classification entry and designated
"Eval.," have the following significance:
Source of Information
Doc. - Documentary
A - Completely reliable
B - Usually reliable
C - Fairly reliable
D - Not usually reliable
E - Not reliable
F - Cannot be judged
1 - Confirmed by other sources
2 - Probably true
3 - Possibly true
4 - Doubtful
5 - Probably false
6 - Cannot be judged
"Documentary" refers to original documents of foreign governments
and organizations; copies or translations of such documents by a staff
officer; or information extracted from such documents by a staff offi-
cer, all of which may carry the field evaluation "Documentary."
Evaluations not otherwise designated are those appearing on the
cited document; those designated "RR" are by the author of this re-
port. No "RR".evaluation is given when the author agrees with the
evaluation on the cited document.
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