PARTICIPATION OF THE SINO-SOVIET BLOC IN INTERNATIONAL TRADE FAIRS AND EXHIBITS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01149A000400210004-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 13
• Document Creation Date: November 9, 2016
• Document Release Date: July 20, 1998
• Sequence Number: 4
• Publication Date: February 10, 1956
• Content Type: REPORT

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PARTICIPATION OF THE SINO-SOVIET BLOC
IN INTERNATIONAL TRADE FAIRS AND EXHIBITS
10 February 1956
DOCUMENT NO.X
C CHANGE IN CLASS. ^
DECLASSIFIED
ASS. CHANGED TO: TS S C
NEXT REVIEW DATE:
AUT HR 7
DAT i VIEWER _ 572044
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CONTENTS
Page
Summary . , .
I.
Scope and Trend of Participation
1
II.
Economic Impact of Participation . . . . . . . . . .
6
III.
Other Implications of Participation . . . . . . . .
7
Appendix
Estimated Expenditures on International Trade Fairs
by Members of the Sino-Soviet Bloc, by Host
Country, .1955? . . . . . . ,
1. Summary of the Participation of the Sino-Soviet Bloc
in International Trade Fairs and Exhibits,
1951-55 . . . . . ,
2. Participation of the Sino-Soviet Bloc in International
Trade Fairs and Exhibits, by Size and Estimated
Expenditure; 1955 . . . . . . . . . . .. . . . .
3. Participation of the Swno-Soviet Bloc in International
Trade Fairs and Exhibits, by Size and Estimated.
Expenditure; 1954 ,
Estimated Expenditures on International Trade Fairs
by Members of the Sino-Soviet Bloc, by Host
Country,,,195
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PARTICIPATION OF THE SINO-SOVIET BLOC
IN INTERNATIONAL
Summary
AND EXHIBITS
.The international trade fair program of the Sino-Soviet Bloc is
part of the battery of techniques used to implement the foreign eco-
nomic policy. of the Bloc. This program and the other techniques,
which include trade agreements, attractive barter deals for agri-
cultural surpluses, and credits for purchase of capital equipment by
underdeveloped countries, are currently being considerably expanded
and appear to be closely coordinated with the total Bloc effort. The
Bloc, by employing foreign economic policy as an instrument of
foreign policy, has scored recent diplomatic successes in the Middle
East and Asia.
Scope and Trend of Participation.
"The international industrial expositions and fairs in which the
Soviet Union takes an active part play a great role in developing inter-
national economic ties ... /and have/ the function of helping to develop
and strengthen economic relations between the USSR and foreign coun-
tries. Participation of the USSR in expositions has become especially
broad and systematic since the end of the war. "" This quotation from
Mikhail V. Nesterov, President of the Soviet Chamber of Commerce,
contains the essence of Soviet official policy concerning participation
in trade fairs. This policy, like most international Soviet economic
policy, has been adopted by the Sino-Soviet Bloc as a. unit. A summary
of some of the measurable aspects of trade-fair participation by the
Bloc is given in Table 1.
Summary of the Participation of the Sino-Soviet Bloc
in International Trade Fairs and :Exhibits a/
'(1)
(2)
(3)
(4)
(5)
Number of Countries
Number of Inter-
national Fair s
and Exhibits in
Estimated
Year
in Which
Bloc Exhibited
Which Bloc
Participated a
Number of
Exhibits
Expenditures
(Thousand US $)
1951 .b/
8
8
20
N. A.
1952 b/
15
20
92
N. A.
1953 b/
23
58
120
N. A.
1954
26
60
125
101,000,
1955
41
149
288
38, 000
a. Summary of data in the tables and appendix-whicl follow.
. L ata for 1951, 195Z, and 1953 are less firm than data for 1954 and 1955.
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The growth of Sino-Soviet Bloc participation in international com-
mercial activity by means of the trade-fair technique is shown in
Table 1. This participation was restricted. in 1951 to a minor share
in fairs organized by the major trading nations of Europe. The ini-
tial expansion and broadening of the program began in 1952. In that
year the Bloc appeared for the first time in five fairs in underdeveloped
countries. The trend of participation in underdeveloped areas con-
tinued in 1953. Exhibits were held in Egypt, French Morocco, Indonesia,
Thailand, and Tunisia. The Bloc continued to participate in fairs in
Greece and Turkey. In 1954 the size of the individual Bloc exhibits
increased, and the Bloc further increased its participation in the fairs
of the underdeveloped countries. For example, the Bloc participated
on a larger scale in fairs in Turkey, Syria, Indonesia, Greece, and
Egypt. Smaller efforts were made in fairs in Brazil, French Morocco,
Iran, and Malaya.
The most significant increase in Sino-Soviet Bloc participation in
trade fairs and exhibits took place in 1955. In this single year the Bloc
participated in more trade fairs and exhibits than in the 4 preceding
years. In 1954 the Bloc had 125 exhibits in some 60 fairs in 26 coun-
tries, with an estimated expenditure of US $10 million. In 1955 the
Bloc had 288 exhibits in 149 fairs in 41 countries. Bloc expenditure
in 1955 is estimated to have been US $38 million, of which approxi-
mately US $18 million were expended on exhibits in the Free World
and the remainder on. fairs held in Bloc countries. Although Bloc-
Free World trade constitutes only about 20 percent of total Bloc trade,
over 47 percent of the Bloc trade-fair effort was spent in. the Free
World.
Tables 2* and 3** show the extent of participation by the various
Sino-Soviet Bloc countries in both intra-Bloc and Free World trade
fairs and exhibits. Two noteworthy developments are apparent from
these tables. (1) the emergence of Communist China as a substantial
participant in trade fairs and (2) the leading role of Czechoslovakia
as a participant in trade fairs. The role of Czechoslovakia lends
some substance to reports that, in the future, Czechoslovak industry
is to concentrate principally on exports to non-Communist countries.
Available reports further indicate that the Czechoslovak export drive
is designed to make "practical propaganda" for the Communist eco-
nomic system.
Estimated trade: fair expenditures of the Sino-Soviet Bloc, broken
down by Bloc participants, by geographic area, and by host countries?
in 1955, are shown in the Appendix in. Table 4. *** This appendix shows
the areas where :Bloc trade-fair activities have been concentrated.
Although western Europe is the major Free World trading area
for the Sino-Soviet Bloc, ependitures for trade-fair participation
in western Europe were somewhat less than expenditures for the Far
East and Middle East. Bloc participation in India involved a greater
financial outlay than. in any other Free World country. M4jd'r outlays
were also made in Pakistan, Indonesia, and Syria. Extensive Bloc
trade-fair activities also took place in Yugoslavia, Turkey, Austria,
the Netherlands, and Sweden. Not so costly as these, but also note-
worthy, were the one-nation shows in Argentina, Egypt, and Iceland.
Table 2 follows, on p. 3.
Table 3 follow on p. 5.
Table 4 follows on p. 9.
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Information concerning 1956 trade-fair activity indicates a con-
tinued high level. of Sino-Soviet Bloc participation. Announced plans
indicate an increased expenditure in such countries as Afghanistan,
Syria, Turkey, Greece, Italy, Yugoslavia, Tunisia, French Morocco,
and Japan. The intention, of the Bloc to participate in future Latin
American fairs has also been announced by Bulganin. Trade fairs
comparable in magnitude to those held in India and Pakistan during
1955 have not been announced for 1956, but a large-scale Bloc effort
is expected for the 1956 Industrial and Trade Fair in Afghanistan,
and participation. in other Far East fairs that may develop is highly
probable.
The Sino-Soviet Bloc; has concentrated and probably will continue
to concentrate As trade-fair activities in the Free World on the under-
developed countries of Asia, the Middle East, North Africa, eastern
and southern Europe, and Latin America. Activity in selected coun
tries of northwestern Europe probably will continue with emphasis on
France, Swede., and Iceland. The trend of participation clearly is
toward fairs and exhibits of increasing magnitude in the underdeveloped
countries.
II. Economic Impact of Participation.
Sino-Soviet Bloc participation in international trade fairs and
exhibits is frequently dismissed as a propaganda effort. This point
of view is reinforced by reports that Bloc representatives in atten-
dance at fairs are reluctant to quote prices or discuss firm delivery
dates. The apparent unwillingness of the Bloc representative$ to
negotiate a spot sale is in contrast with the willingness of the Free
World exhibitors to do business immediately. Bloc trade activity,
however, is controlled by a state monopoly which is normally more
interested in the general development of trade relations than in single,
isolated, on=the-spot sales. The "normalization of trade relations, "
which is the principal aim of Bloc participation in trade fairs,, is
accomplished primarily through the medium of subsequent trade and
payment agreements. These agreements are reached only after
lengthy negotiations involving governmental agencies, central banks,
Bloc trade monopolies, and Free World trade companies. The Bloc
generally uses a trade fair as a means of exhibiting a wide range of
products as a step in the trade agreement negotiating processes.
The USSR, has commonly used what may be termed an'"institu-
tional" approach to the trade-fair medium. by presenting its exhibits
in an impressive display, usually under a single roof in a Soviet
pavilion, rather than dispersed among the various category exhibits.
Considerable comment has taken place concerning the withdrawal of
the USSR from trade fairs coincidental. with US announcements of
intention to participate. This withdrawal has popularly been construed
as Soviet reluctance to compete with the US exhibit. Examination of
the details of Soviet withdrawal indicates that one of the principal
motivations was the unwillingness or inability of the sponsors of the
fair to allocate sufficient space for a large, consolidated Soviet exhibit
rather than fear of US competition, although the latter may have been
a contributing factor.
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An examination of Sino'-Soviet Bloc foreign trade with the under-
developed countries in which the Bloc participated in exhibits indi-
cates that the trade-fair program combined with other trade promotional
activities does have an economic impact. The impact appears to be
cumulative and thus offers the probability of a long-term increase in
such Bloc trade. For example, the Bloc exhibits in recent Salonika
trade fairs probably acted as a catalyst in the increase in :Greek trade
with the Soviet Bloc in 1953 and 1954, an increase which restored this
trade to the 1948 levels. Preliminary data indicate that Soviet Bloc-
Greek trade in 1955 increased 35 percent over 1954. The Bloc has
successfully obtained an important timber and petroleum market in
Greece;:_inexchange for timber and petroleum it receives needed
supplies of tobacco, fruits, vegetables, olive oil, and olives. The
USSR is reported to be extremely interested in obtaining needed bauxite
from Greece, Several Bloc-.Greek trade agreements have been con-
cluded, and trade delegations and agents have been established, Pros-
pects of further increases in foreign trade are believed to be good.
Although Greece cannot be said to be economically dependent upon the
Sino-Soviet Bloc, the Bloc trade drive has increased Bloc -Greek trade
to the highest point of record and has resulted n,greatly improved
economic relations which, in turn, have reduced the strain of Soviet
Bloc-Greek political relations. Other countries in which Bloc par-
ticipation in trade fairs and exhibits. and attendant trade promotional
activities have, resulted in a definite increase in economic activity,
although of varying degree, are Afghanistan, Finland, Iceland, Yugo-
slavia, Egypt, Greece, Syria, Turkey,',. India, Indonesia, Burma., and
Argentina.
There is a striking correlation between the trade exhibit activity
of the Sino-Soviet Bloc and Bloc offers of credit to underdeveloped
countries. Almost without exception the underdeveloped countries.
mentioned above have been offered long-term credits for capital
development. In perspective, both the long-term credit program and
the trade-fair program appear to be parallel techniques for implementing
S.no-Soviet Bloc economic policy.
The total economic impact of the trade-fair program of the Sino-
Soviet Bloc cannot be appraised apart from the Bloc's other trade
promotional activity, and although.the combined impact of the 1955
program cannot yet be measured, the result may be a further increase
in Soviet Bloc-Free World trade in 1956,
III. Other Implications of Participation.
Participation in trade fairs gives the Sino-Soviet Bloc an oppor-
tunity to display its new foreign economic program, The Soviet leader-
ship has clearly indicated that it considers this program an important
arm of its diplomacy and a means of competing with the US for world
influence and leadership, Present Soviet activity indicates that the
USSR now has enough economic resources and technical personnel, as
well as a relatively tranquil domestic scene, to enter new areas of
world diplomacy such as Asia, the Middle East, Africa, and Latin
America. The Icurrent Soviet re-emphasis on heavy industry has helped
create a stockpile of capital goods for trade with underdeveloped coun-
tries.
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Increased participation in trade fairs, therefore, has been accom-
panied by an increase in Sino-Soviet Bloc: trade, in the offer and exten-
sion of credit to underdeveloped areas as well as the establishment of
trade representation, and in the signing of trade agreements.
The Sino-Soviet Bloc also employs the trade fair as a propaganda
vehicle. Statue!:; of Communist leaders and photographs purporting to
show life in the Bloc countries are shown (although to a lesser degree
in 1955 than in 1954). Written material is disseminated, and political
speeches are made that are filled with the current slogans calling for
"peaceful coexistence, " "relaxation of world tension, " removal of trade
embargoes, and. the reunification of East and West Germany.. Attempts
are also made to secure formal trade agreements in order to gain de
facto recognition of Communist China and East Germany. The size
of the pavilion and the number and variety of products displayed are
designed to impress the visitor with the comprehensiveness and know-
how of Bloc production. The assistance of the local affiliate of the
Communist-front Committee for the Promotion of International Trade
(CPIT) is enlisted by the Communist Party to insure the success of the
fair.
The Sino-Soviet Bloc: participates increasingly in trade fairs for
a combination of economic and political reasons. Economically, the
Bloc trades with the Free World to obtain raw materials and, industrial
products which it needs to supplement its economy. Many of these raw
materials are found in the countries of non-Communist Asia and the
Middle East, which are underdeveloped and which have foreign exchange
deficiencies. The Bloc, by exhibiting an array of capital goods and
offering to exchange them on favorable terms for raw materials, pro-
poses to facilitate the industrialization of these underdeveloped areas.
The increased economic influence of the., Bloc will unquestionably be
used for political purposes whenever and vArr'rever an opportunity
offers itself.
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