EXAGGERATION OF 1959 PRODUCTION CLAIMS BY COMMUNIST CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A000900060001-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: December 12, 2016
• Document Release Date: March 12, 2002
• Sequence Number: 1
• Publication Date: January 27, 1960
• Content Type: BRIEF

Approved For Release 2002/05/07 : CIA-RDP79TO1003A000900060001-5
CONFIDENTIAL
CB No. 60-6
Cop No.
27 January 1960
CURRENT SUPPORT BRIEF
EXAGGERATION OF 1959 PRODUCTION CLAIMS BY COMMUNIST CHINA
OFFICE OF RESEARCH AND REPORTS
CENTRAL INTELLIGENCE AGENCY
This report represents the immediate views of the
originating intelligence components of the Office
of Research and Reports. Comments are solicited.
This document contains information affecting the national defense of
the United States, within the meaning of the espionage laws, Title 18
USC, Sections 793 and 794, the transmission or revelation of which
in any manner to an unauthorized person is prohibited by law.
CONFIDENTIAL
Approved For Release 2002/05/07 : CIA-RDP79TO1003A000900060001-5
 Approved For Release 2002/05/07 : CIA-RDP79TO1003A000900060001-5
CONFIDENTIAL
EXAGGERATION OF 1959 PRODUCTION CLAIMS BY COMMUNIST CHINA
Although Communist China made considerable economic progress
in 1959, claims by the regime that the value of output in industry
and agriculture rose 31.1 percent above 1958 are greatly exaggerated.
The claims, issued from Peiping on 21 January, may be summed up as
follows: 1/
Claimed 1958 Claimed 1959 Claimed
Value of Output Value of Output 1959 Index
Item (billion Yuan) (billion yuan) X1958 : 100)
Industrial Production 117.0 163.0 139.3
Agriculture Production 67.1 78.3 116.7
184.1 .3 131.1
Preliminary analysis of these claims--which also included figures
for major individual commodities--shows the following probable weak-
nesses : (a) They are based on "gross value" figures, which usually
give an upward bias, in contrast to "value added" figures; (b) They,
in the case of individual commodities, include an unspecified but
probably increased proportion of hithertofore uncounted handicraft
production; (c) They, notably in the case of agriculture, are not
consistent with other information on the Chinese Communist economy;
(d) They represent a tremendous expansion of economic activity beyond
the "leap forward" levels of 1958, whereas 1959 has been a year of
"tidying up". that is, a year of consolidating the large gains of
1958 and of remedying the imbalances that accompanied these gains.
Furthermore, the statistical recantation of August 1959, when several
of the major claims for 1958 were painfully scaled down by the regime,
serves as an excellent warning about taking Chinese Communist pro-
duction figures at face value.
Specifically, while industry did very well in Communist China
in 1959, growth in industrial output is estimated to be closer to
25 percent than to the 39 percent claimed. Agriculture had a
decidedly poor year and production, rather than increasing 17 per-
cent, fell off because of drought and flood. For example, grain
production, which allegedly rose 8 percent, was an estimated 5
to 7 percent below 1958. Finally, national income instead of
rising 21.6 percent, as claimed, probably rose about 12 percent
in 1959.
27 January 1960 CIA/RR CB 60-6
Page 2
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