SE-37: PROBABLE EFFECTS OF VARIOUS POSSIBLE COURSES OF ACTION WITH RESPECT TO COMMUNIST CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79S01011A000900010044-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 9, 2016
• Document Release Date: February 28, 2000
• Sequence Number: 44
• Publication Date: February 13, 1953
• Content Type: MF

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FEB 16 1953
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10:30 Thursday, 19 February tnlsss elsared previously
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SECURITY INF(RMATION
C E N T R A L I N T E L L I G E N C E A G E N C Y
13 February 1953
SUBJFCTs TERMS OF REFERFNCEs SE-37: PROBABLE EFFECTS OF
VARIOUS POSSIBLE COURSES OF ACTION WITH RESPECT
TO COWUNIST CHINA
1. To examine the current status and effectiveness of controls
on trade with Communist China, to examine the short and long term
effects on the capabilities of the Chinese Communist regime of: (a) a
complete embargo; (b) a naval blockade, alone or combined with bombard-
ment of transportation facilities in Communist China; and (c) a Chinese
Nationalist effort at blockade and aerial bombardment.
2. To estimate Communist reactions to these measures.
(Note to the contributorss The terms of reference follow closely
the form and outline of SE-27 and are given here in full. It is
suggested that the terms of reference be checked against the text of
SE-27 and that in paragraphs or sections of SE-27 where there is no
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change, the contribution merely refers to pertinent paragraphs of
SE-27. Minor changes should also be indicated. Complete terms of
reference are necessary in order to clearly define the scope of the
paper, but it is hoped that by following the procedure above research
may be restricted to the areas in which new information is available.
QUESTIONS BFARING ON THE PROBLEM
I. 141AT IS TUE ElCMT OF P T CON;TRCLS ON TRADE WIM 0MAMUNIST
MM THV IMPMGW. AM . TIM W TO MAJOR VM M, ON
II. WHAT HAS BEEN THE EFFECT TO LATE OF CONTROLS ON TRADE WITH
A I ? ST
China's ability to import?
1. What sea-borne imports (including estimates of
snuggling) has Communist China received sides con-
trols were first applied, with special reference to
the current volume and composition, and to trends
since the publication of SE-27? (June 1952)
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2. What reductions in Commnist China's seaborne imports
from non-Communist countries have occurred since the
imposition of the present control measures, with
special reference to the period since the publication
of SEA-27?
3. To that extent have Soviet Bloc shipments to Comwnist
China offset these reductions? Estimate the composition
and volume of Soviet Bloc trade with Commnist China
with special reference to current volume and composition,
and to trends since the publication of SEA-27?
B0 What has been the affect on Communist China's economy of
the changes in level and pattern of imports that have occurred
since the imposition of present trade controls?
1. What industries have been affected, and to what extent?
What is the importance of these industries to the
Chinese Communist war effort in Korea? What is the
importance of these industries to the stability and
development of the Chinese Communist econoz ?
What has been the effect on transportation? What
repercussions have transportation difficulties had?
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3. Have there been any significant effects in the non-
in&strial segments of the econonV such as finance
and agriculture?
C. What has been the effect of the economic dislocations
covered in (B) above upon Communist China's military
capabilities, especially in Korea?
D. What has been the affect of the economic dislocations
covered in (B) above upon the ability of the regime to
maintain political control in China?
III. WHAT WOULD BE THE EFFECT OF A TOTAL E ARGO OF EKPORTS 20
CM+NNIST CHINA FR 4 ALL NON-SOVIET BLOC COUNTRIES ON THE
CHINESE C KIST DDO C AND POLITICAL STRENGTH AND ITS
MILITARY CAPABILITIES? (In this section the following con-
ditions will apply:
The imposition of a total embargo by the entire non-Communist
world would presumably extend to both trade and shipping. The
implementation of such an embargo would presumably include
measures to prevent the transfer or charter of non-Communist
shipping to Communist China, the denial of bunkering and
servicing in non-Communist ports of ships bound for Chinese
Communist ports,, and the transshipment of non-Communis t goods
directly or indirectly to Communist China from other countries
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in the Soviet Bloc. By definition, such an embargo would
cut off Communist China's trade (except smuggling) with
all countries outside the Soviet Bloc. It would represent
the strongest form of economic pressure that could be
brought to bear against Communist China short of a general
East-West trade and shipping embargo*
The means by which such an embargo would be implemented is
beyond the scope of this paper. Whether or not such an
embargo would be politically feasible or even desirable in
the light of its economic repercussions on the non-Communist
world is also beyond the scope of this estimate.
A. What would be the effects of a complete economic embargo
on Communist China's trade pattern over the next year?
1. What is the probable amount and composition of trade
with non-Bloc areas that would be "lost"? (Estimate
the amount and composition of Communist China's trade
with the non-Connmanist world for the next year assuming
a continuation of the present controls.)
2. What would be the composition and volume of Communist
China's imports from the rest of the Soviet Bloc
(a) by sea? (b) by land? What upper limits would be
imposed by transportation shortages? What economic
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strains would be placed on the Soviet Bloc if it
attempted to provide Commnist China with both its
military and nd niwaun economic rec airements? If
it attempted to provide Communist China with suffi-
cient assistance to support a gradual expansion of
the Chinese Communist econonV? Could the USSR pro-
vide assistance on this scale without serious effects
on its own planned economic development?
39 What would be the net loss in imports as a result of
a total embargo?
Be How would this loss of imports affect Comnainist China's
econon5r?
1. What would be the effects on the industrial segment of
Communist. China's economy? What is the importance of
the affected industries to the war effort in Korea,
to the Chinese ConQ mist economy as a whole?
2. What would be the effects on transportation? What
would be the repercussions of these affects to the
rest of the economy'?
3. What would be the effects in other sectors of the
economy such as fiscal and agriculture?
S WAM
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4. What is the ability of the Chinese Communist econogr
to replace the "lost" oommiodities from domestic
sources? What would be the diffused effects of shortages
and of altering production patterns so that these items
would be produced domestically?
Co What would be the effects on Chinese Communist military
capabilities with special reference to their ability to
sustain operations in Korea?
1. Would there be any outback in munitions production?
In civilian type goods used by the Army?
2. Would there be any effect on the ability to transport
troops and to provide military logistical support?
D. What would be the extent and nature of the effects of a
complete economic embargo on the regime's ability to maintain
political control on the Chinese mainland?
E. What effect might a complete economic .smbargo have on
economic, political, and military relations between the
Chinese Communists and the USSR?
F. What would be the effect of a complete economic embargo
maintained over an extended period of time ? 2 to 5 years - on
Communist China's military capabilities and over-all economic
7 -
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and political strength? (Answer generally in terms of
B through S above.)
0. What factors would tend to prevent full enforcement of an
economic embargo? (In SE-27 this question is not discussed
in the body of the paper since the assumption is made in
paragraph 25 that it would be completely effective.) To
what extent would these factors reduce the effectiveness
of an embargo?
IV. WHAT WOULD BETHE EFFDCI OF A NAVAL BLOCKADE I,NC, jDING_ PORT
ARTHUR AND WREN ON COMMUNIST CHINA'S ECONOMIC AND POI,ITICAJ,
STRF*3TH AND ITS MILITARY CAPABIL T FS?
A. Assuming that a naval blockade would out off substantially
all of Communist China's sea-borne Imports, to what extent
could the loss of these imports be made up by additional
overland imports from the Soviet Bloc?
1. What limitations would be placed on this trade by the
capacity of land transportation to Communist China?
2. What limitations would be placed on this trade by the
current capacity of inland transportation within
Manchuria and elsewhere in Communist China? What is
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the capability of Comaniet China to increase such
capacity rands conditions of a blockade? What asaie-
tanoe could the USSR provide to increase etch capacity?
3. What economic strains would be placed on the Soviet
Bloc if it attempted to provide Com monist China with
both its ndlitary and wdrdno economic recpirements?
If it attempted to provide Coamcnist China with
sufficient assistance to rapport a gradual expansion
of the Chinese Commgniet econ=VI Could the USSR
provide assistance on this scale without serious
effects on its own planned economic development?
B. What would be the effects of a naval blockade on Communist
China's ocean-going coastal trade?
1. What is the extent, oompositioon, and geographical
distribution of this coastal trade?
2. How mob of this trade would be out off by a naval
blockade?
3. What is the ability of the inland transportation Wotan
of Coiunist China to carry this coastal trade, allowing
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for the increased overland imports from the Soviet
Bloc projected in "A" above?
C. What would be the short-term effects of the dislocations,
shortages, and additional costs, caused by a naval block-
ade ons
1. The Chinese Communist economy;
2. The military capabilities of the regime, especially
with reference to its ability to sustain military
operations in Korea;
3. The regime's ability to maintain political control
over the Chinese people;
h. Communist China's political, economic, and military
D. If a naval blockade were maintained over an extended period
of time - 2 to 5 years:
1. Could the USSR progressively increase its economic
assistance to Communist China?
2. What would be the probable trend in the industrial
sector of the Chinese Communist econonq? In the
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monetary and fiscal situation? In transportation?
In agricultural production and distribution? On the
over-all economic, political, and military strength
of the regime?
3. What would be the probable trend in economic, polit-
ical, and military relations between the USSR and
Communist China?
V. WHAT WWLD BE THE DEFECTS OF BO"1BARDING TRANSPORTATION F CIISTIFS
A. Have there been any changes in critical transport targets
within Communist China as listed in paragraph 50 of SE-27?
B. What would be the effect on Communist China's ability to
sustain military operations in Korea of successful and
sustained air bombardment of such targets?
Co What would be the economic and political effects of
successful bombardment of such targets?
D. What are Communist capabilities to resist air bombardment
of such targets?
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VI. WHAT WOULD BE THE EF'FEC'T OF A CHINESE NATIONALIST EFFORT TO
T
BLOCKADE
INIAND LINES OF CMNICATION ON ( 4! JNIST CHINAS MILITARY
CAPABILITI S. MM GMIC AND ITICAL STREWTH?
A. What are the capabilities of the Chinese Nationalists to
prevent ocean shipping from entering Chinese Comminiat
ports? To interfer with coastal trade?
B. What are the capabilities of the Chinese Nationalists to
conduct air strikes against lines of commiunioation on the
China mainland?
VII. WHAT WOULD BE THE PROBABLE CGIMUNIST REACTION TO:
1. A complete economic embargo?
2. A naval blockade?
3. A naval blockade and an air bombardment of inland
lines of communication?
lt. A naval blockade and air bombardment by the Chinese
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