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November 16, 2016
Document Release Date: 
January 18, 2000
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April 1, 1964
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SECRET Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 FOREIGN DISSEM Current Support Brief INCREASED CHINESE COMMUNIST AID TO CEYLON: FACT OR FICTION CIA/RR CB 64-25 April 1964 CENTRAL INTELLIGENCE AGENCY Office of Research and Reports NO FOREIGN DISSEM SECRET GROUP 1 Excluded from automatic downgrading and declassification Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 WARNING 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. Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 Approved For Relea 2O I Q I1$ : CIA-RDP79TO1003AO01900200001-8 INCREASED CHINESE COMMUNIST AID TO CEYLON: FACT OR FICTION Recent Chinese Communist proposals to grant Ceylon $7 million" in aid probably represented mere window dressing for Chou En-lai's visit in February. In spite of Chou En-lai's announcement that addi- tional aid would be forthcoming if needed, the "new" proposals appear to be included within the framework of the existing (but little imple- mented) Chinese aid program, and no new aid commitments are ex- pected. The proposed grant of $7 million includes $4. 2 million for textile imports in 1964 and $2. 8 million for the construction of an international conference hall. The Chinese also have agreed to in- crease exports of rice in 1964 beyond the 200, 000 metric tons to be exchanged for 35, 000 metric tons of rubber under the existing rice-for- rubber barter agreement -- the net addition to be covered by Chinese credit. 1 / Chinese Communist aid proposals have a large propaganda con- tent, and actual implementation proceeds at a slow pace. Of the $36. 8 million in Chinese economic aid commitments to Ceylon extended in 1957, 1958, and 1962, $26.1 million remains unused, including $21 million in economic grants and $5.1 million in commodity credits for flood relief. The Chinese generally fulfill commitments for tech- nical assistance and commodities at a faster rate than those for ma- chinery and equipment. They probably will supply the $4. 2 million worth of textiles and the additional supplies of rice during 1964, but it is doubtful whether drawings for those projects already on the books will be stepped up. The Chinese Communists often have attempted to evade Ceylonese criticism of lagging aid programs by subsequent extensions or enlarge- ments. In October 1962, in the face of negligible shipments under the 5-year Chinese aid grant of September 1957, the schedule was extended 5 more years (to 1967). The 1958 commodity credit for flood relief, also unused, likewise was extended until 1967. In the same year the Chinese, rather than adopt firm measures for improving the timetable for existing aid commitments, chose to increase their aid commitment by giving Ceylon an additional grant of $10. 5 million -- none of which. has yet been used. 2/ Although Ceylon's current economic problems are severe -- (1) the lowest foreign exchange reserves in two decades Dollar values are given in current US dollars throughout this publication. S-E-C-R-E-T Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 S-E-C-R-E-T (only $78 million compared with more than $200 million in 1958); (2) steadily rising consumer prices, reaching an all-time high in February; and (3) a number of crippling strikes that led to the decla- ration by the government of Ceylon of a state of emergency and the proroguing of Parliament -- Chinese economic aid is not expected to make a significant contribution toward solving them. 3/ The following tabulation provides a summary of Chinese Com- munist economic grants and credits to Ceylon: Million US $ Projects Extended Drawn Status September 1957 grant --? com- 15.8 5.3 modity credit chargeable to rubber rehabilitation Textile mill, Pagoda ($4.2 million) Railroad coaches and other rolling stock ($5.0 million) Tires for the Ceylon Trans- port Board ($1.0 million) Textile manufacturing equip- ment ($1.1 million) Fountain pen factory Being surveyed Completed Being implemented No known progress Proposed late in 1963; no known progress September 1958 line of credit -- 10.5 5.4 flood-relief measure Rice ($5.4 million) Completed Rice (dollar value not Proposed in February known) 1964 October 1962 grant -- com- 10.5 0 modity credit chargeable to rubber rehabilitation Textile imports for 1964 Proposed in February ($4.2 million) 1964 International conference hall ($2.8 million) Total 36.8 10.7 Proposed in February 1964 - 2 - S-E-C-R-E-T Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 Approved For Releaie~0P0/ 5t12T: CIA-RDP79TO1003AO01900200001-8 In addition to economic aid, Ceylon signed a maritime agree - ment with the Chinese Communists in August 1963, permitting the reciprocal use of the ports of both countries for the transport of cargo and passengers. The agreement grants the Chinese trans- shipment rights in Ceylonese ports, which may facilitate their trade in many areas, notably Africa. The Chinese reportedly also have agreed to provide some technical training in textile production under their aid program. 4/ 25X1A Analyst: Coord 25X1A S-E-C-R-E-T Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 Approved For R Rj,,Rapjj& ~&%sjqA-RDP79T01003A001900200001-8 Approved For Release 2(MAI : CIA-RDP79T01003A001900200001-8 NO FOREIGN DISSEM Analyst: IAA 25X1A Approved For Release 2900/05/1 ~ : CIA- d63 900200001-8 SECRET NO FOREIGN DISSEM QRO W 1 Excluded from xatainstlc dow"rading eod dutitat ? ?~.R :z;. iwuflc? B c.A/RR.C3 64-25 L b 1 L ru rxent April 1.964 25X1A 170 - 205 170 171 172 173 174 ...._.. 175,.176 177 178 179 180 183 - 186 187 188 189 - 19.1.. 192 193 194 195 ._.1U#1T Uj. t 3.zlYa ~J/ SECRET Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 SUBJECT: Distribution of Current Support Brief No. 6-25. Increased C ainese Communist Aid to Ceylon: Fact or -fiction --- April 196? (SECRE 1/NO FOREIGN DISSEM) Copy No. Recipient 1 O/DDI, Room 7E32, Hdqtrs. 2 - 3 NIC 4- 12 OCI Internal 13- 15 ONE 16 - 21 St/CS/RR. 22 O DDI - Chester Cooper 25X1A 23-31 32 NSAL 33 - 230 ORR Distribution, St/A/Document Support Section, Room GH0915, Hdqtrs. (Distributed by OCR) SECRET CROUP I Exeludad from automatic downgrading and dectHSiflcttaa ,_ Approved For Release 2000/05/12 : CIA-RDP79TO1003AO01900200001-8 btWtC t St/.A/DSS Distribution of Current Support Brief No. 64-25, Increased C ?ag ,_... C o n reunist A&PJWA A @jgM(r W5112 gkA f /18 m3'i9i 8 ltienj. 3 3 AD/RR 34 DAD/RR 35 Ch/E 36 St/ PR :37 -41 D/A G 1 each branch) 42-., 47 D/MS (1 each branch) 4853 D/R (1 each branch) 54 Chief, Military-Economic. Research Area 55 - 59 Programs Division (1 each branch) 60 65 Forces Division (1 each branch) 66 Plans and Support Staff 67 m 75 D/I (1 each branch) 76 -= 77 D/GG 78-79 D/GC 80 D/GC/X dl x-- 36 RID/ANA Unit 4, Room 1B4004, Hq. 67 St/P/A 25X1A 88 St/FM 89 Analyst/Branch I/A) 90 GR/CR 91 BR/CR 92 FIB /SR/CR, Room 1G27, Hq- 93 Library/CR 94 IPI/CR 95 VMR, A-18 96 AD/OO 97 Chief, FDD 98 CD/OO 99 OCI/RP/PS, Room 7G15, Hq. 100 DDI/CGS, Room 7F35, Hq. 101 DDI/COGS/HR, Room 3F30, Hq. 102 a 104 OSI 25X1A 105 OBI 106 ? 107 O'TR/IS/IP, Room 53Z, Broyhill Bld , (1 m OTR/SIC) 518 108 , NPIC/CSD/REF, Room 15 Defense Intelligence Agency, D m , Room 2D233, Pentagon 1,55 - 166 167 ? 168 169 170 - 205 t +6 ? 230 109 USIA, Warren Phelps, IRR/D, Room 701, Walker Johnson Building, 1734 New York Avenue, N. W. State,, INR Communications Center, Room 7818, State Dept. Bldg. Dr. Neilson Debevoise, NSG, Room 365, Executive Office Building Frank M. Charrette, Agency for International Development, Chief, Statistics and Reports Division, Room 802, State Annex No. 1 St/P/C, Room 4F41, Hq~ Records Center Commandant Nat'l. War College Ft. Leslie McNair, Attn: Classified Records Section, Rm. 26, Nat'l. War College Bldg., Wash., D. C. Ass't.. Secretary of Defense, ISA, Room 4D825, Pentagon CA Staff, DDP, Room 3D0004, Hq. 6WOUP1 Approved For Releas (f2*DJJ79T01 003A001 900200001-8 diclae i loafbrr Approved*P6r Release 2 17 12 : CIA-RD*769T01003A001900200001-8 28 April 1964 MEMORANDUM FOR: Chief, Dissemination Control Branch, DD/CR FROM : Chief, Publications Staff, ORR SUBJEC T : Transmittal of Material It is requested that the attached copies of CLA/RR CB 64-25, Increased Chinese Communist Aid to Ceylon: Fact or Fiction, April 1964, SECRET/NO FOREIGN DISSEM, be forwarded as follows: State, INR Communications Center, Room 7818, State Dept. Bldg- Suggested distribution for Embassies in Bangkok, Hong Kong, Saigon, Singapore, and Tokyo P P. C PLETED Tha dissemination request?,d by his memorandum has been completer BY: Dste~~~~~ a._ Attachments : Copies #60 - #64 of CB 64-25 25X1A Approved For Release 945/ > C&ON; WC SECRET I donagrading and deciancitication 79101003A001900200001-8 SECRET Project App orc19For Release 2 0 0 0/0 5/1 2 :CIA_RDP79TO1003AO01900200001-8 Title Increased Chinese Communist Aid to Ceylon: Fact or Fiction SECRET _ ...~._____O (. ' ?`. /NO FREIGNY DISS EM) Responsible Analyst and Branch 25X1A RECOMMENDED DISTRIBUTION TO STATE POS TS Berlin,, Germany Romania Budapest, Hungary losrow, USSR. 'r. ague, Czechoslovakia oha,, Bulgaria Warsaw,. Poland :urn e ;el.grade, Yugoslavia 3rr'n, Switzerland `Ionn, Germany il.r ussel$, Belgium (:. penha en, Denmark i? rankfurtr, Germany Geneva, Switzerland lielsinki:, Finland 'I"he Hague, Netherlands Lishvn,, Portugal 1,ondon, England . uxembourg, Luxembourg Madrid, Spain Oslo. 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Excluded tram a fwgle Approved For Rele/q5/g,,ra~t 1L on Mexico Guatemala Panama Brazillia., Brazil Buenos Aires, Argentina Bogota, Colorrrb.ia Santiago, Chile La Paz,, Bolivia Montevideo, Uruguay Caracas, Venezuela Africa Y .unde, Cameroun Leopoldville, Congo Addis Ababa, Ethopi;a Accra, Ghana Abidjan, Ivory Coy Nairobi, Kenya Monrovia, Lihex Tripoli, Libya Rabat, N4oroceo Lagos, Nigeria. Mogadiscio, Soo a,,L Khartoum, Sudan. Tunis, Tunisia. Pretoria, South Africa Algiers. Algeria. Cotonou, Daho.R n e y Dakar. Senegal Bamako, Mali P79101003A001900200001-8 S-E-C-R-E:. T App #e T&11TIONS0C N TROL PIR GD ss ~1s 03AE 01900200001-8 25X1A E$ubject C/ ,e,~' G'~3 co S'' Analyst and Branch Date Initials SECURITY -Inedited draft edited draft )ther a. Text check b. Source check c. Releasable to: ASS TRIB U TION -1 sent to AD/RR sent to DDI 3 checked. for release L/PSD notified to Disseminate 25X1 C Group 1 Excluded from automatic downgrading and declae sification - -p Approved For Rplease 200q/05/12 : CIA-RDP79TO1003AO01900200001-8