COMMUNIST CHINA INCREASES PURCHASES OF NATURAL RUBBER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001300250001-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 8
• Document Creation Date: November 16, 2016
• Document Release Date: May 16, 2000
• Sequence Number: 1
• Publication Date: November 8, 1962
• Content Type: BRIEF

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CONFIDENTIAL N? 50
Current Support Brief
CIA/RR CB 62-70 No. Pages 3
8 November 1962
COMMUNIST CHINA INCREASES PURCHASES
OF NATURAL RUBBER
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
CONFIDENTIAL
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COMMUNIST CHINA INCREASES PURCHASES
OF NATURAL RUBBER
Imports of natural rubber by Communist China during the first 7
months of 1962 were almost double those for the comparable period of
1961 according to the Rubber Statistical Bulletin. The increase in
Chinese imports of natural rubber appears to reflect growing require-
ments of the Chinese economy for fabricated rubber articles, which,
in turn, suggests a resurgence of some types of economic activity in
China.
Following a decline in 1961, imports of natural rubber by Communist
China have risen sharply, totaling 70, 600 metric tons (mt) for the first
7 months of 1962 compared with 35, 800 mt in the same period of 1961. 1/
Virtually all the rubber imported so far this year has been obtained from
Indonesia and Ceylon. There were indications early in 1962 that Indonesia
planned to supply 80, 000 to 90, 000 mt in 1962 and that Ceylon has definitely
agreed to supply 31, 000 mt of rubber in exchange for 200, 000 mt of rice. 2/
If Chinese imports of rubber continue at the same level, thereby fulfilling
their reported trade plans, total imports of natural rubber in 1962 will
exceed those in 1961 (85, 000 mt) by about 40 to 45 percent. Thus imports
of rubber in 1962 will approach the record level of 120, 000 mt imported
in 1960, 3/ when some rubber was reexported to other countries of the
Sino-Soviet Bloc. Because reexports have declined, total Chinese net
imports for the whole of 1962 may set a record.
The Chinese Communists appear to have been increasing their pur-
chases of natural rubber in order to expand production of rubber products
for agriculture and consumer goods. Chinese press accounts have high-
lighted the increased efforts to supply agriculture with rubber products
such as tires for tractors and carts, rubber hose for pumps, and con-
veyor belts. 4/ The Chinese also have claimed that 36 million more pairs
of rubber shoes were produced in the first half of 1962 than in the same
period of last year 5/ and that the production capacity and output of two
rubber fabricating facilities were increased this year. 6/
8 November 1962 CIA/RR CB 62-70
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A drop in world rubber prices during 1962 7/ has enabled the Chinese
Communists to buy more natural rubber for the same amount of money,
but neither this factor nor possible increased Chinese requirements for
reexport or stockpiling are believed to be primarily responsible for the
rise in Chinese imports. World market prices for natural rubber have
been declining -- partly because of increasing competition from syn-
thetic rubber -- and there is little expectation of a return to the high
price levels prevailing before 1961. Consequently, favorable prices
probably can be ruled out as a motivating factor in the increased Chinese
buying. Similarly it appears that reexports can account for only a small
part of the accelerated purchasing. Since the rift with the USSR, Chinese
reexports of natural rubber to that country have been discontinued, 8/
and reexports to North Korea and the European Satellites have been
limited. In view of China's precarious foreign exchange position and the
existence of ample capacity in the rubber industry, it is unlikely that the
increase in imports of natural rubber has been for stockpiling the rubber
as a raw material.
8 November 1962 CIA/RR CB 62-70
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Analyst:
25X1A
1. Rubber Statistical Bulletin, vol 16, no 11, Aug 62, p. 8. U.
State, London. Telegram 1362, 18 Sep 62. U.
2. CIA. FDD Summary no 3274, External Economic Relations
of Bloc Countries, no 51, p. 12-13. OFF USE.
State, Djakarta. Airgram A-66, 12 Dec 61. C.
Rubber World, Jan 62, p. 102. U.
3. Rubber Statistical Bulletin (1, above). U.
4. JPRS. 13133, Communist China Digest, no 58, 26 Mar 62,
STATSPEC
. 32. U.
Ibid. , B-2991, 7 Aug 62. U.
Ibid., B-3228, 16 Aug 62. U.
Ibid. , W-262, 19 Feb 62. U.
STATSPEC 5,
6. Ibid., W-360,,18 Mar 62. U.
7. Rubber Statistical Bulletin (1, above), p. 38. U.
8. USSR, Ministry of Foreign Trade. Vneshnyaya torgovlya SSSR
za 1961 god (Foreign Trade of the USSR During 1961), Moscow,
1962, p. 186. U.
8 November 1962 CIA/RR CB 62-70
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CONFIDENTIAL
CONFIDENTIAL
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 Analyst: R/ CH
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O ES,A~ AND REPORTS
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Cr. vlrol Sheet
series Number CIA/RR CB 62-70
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