ECONOMIC

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600200203-5
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: June 29, 2011
• Sequence Number: 203
• Publication Date: July 27, 1948
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200203-5
COUNTRY
SUBJECT
PLACE
ACQUIRED
OF
9 RATION
/" CENTRAL IN i ELLIGENTCE AGENCY
STAT
STAT
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OCq. I.N1011A9101t OOYWplO ~. "a 00 in PaIl "V Y priuuo
REPORT
DATE DISTR. 27 3tCLy 1948
@O. OF PAGES 4
NO. OF ENCLS.
WSTED 3?LOW)
SUPPLEMEW TO
REPORT NO.
'PHIS IS UNEVALUATED INFORMATION FOR THE RESEARCH
USE OF TRAINED INTELLIGENCE ANALYSTS
SWW ( F I l T 3 Fen 113s 11~GS5 -- Translation sFecilzceliy rcruested.)
0tfrWOg YOH R MUM PRO I0N 7,~OSrftY Alm Apr a Tta ~Atxo
.ecently, the gavernrlent euertors concerned have been pa'4r ::oe,rious
attention to the restoration and increase of :.r:dustria1 anu rd-in;; I ro-
duction. This tuly brines treat hope for the future of heavy industry.
After the w?:.r, every producing are:_ eagerly awaited rchabilitation
after having been devastated so long; but because dor.:estic peace and
order have not been restored, communications are had, 11-jusines:3 is dis-
organized, and production is l n . lberefore, econoric recovery
cannot come overnight. I.adustry and niir:ing wat have ccuipaont, technical
skill, capital, rnarket3, Lid other reetti3ite.s.
(cite recently the Cantrel C-overnr:.ent zub:iohed a five-year econonic
plan, which was L-ivon to the ..xecutive Yuan to put into effec.. The
Sunda needed, calculated at the 3-1 prewar rate of exei:an_e (het:?.een US
and Chinese currencies), totalled 220 million yMan. U. this aui;, one
third was to be paid by the n:-ationul tree guy, one third to be irve:sted
by forcir nera, and one t?,?:ird to cone f.: r'm tae r ecplo. This r r of c sal eac
drafted in 1944 by variou:i oi:ecialists of wide experience;, the next ye-
t-it i:ao completed; last year it. was submitted to and passed by t :e Suprune
Econc"lic Council. The project is divided into six sections: (1) co.^r
r.?unications, occupyin.. 3E percent of the budret; (2) industry, 27 F.ercent;
3 mining, 11 percent; (4) production of electricity, 12 p!r:;cnt,
(5) rater conservation, 9 ;-ercert; (6) agriculture, 5 percent. In com-
munications it is hoped to build a nation-wide railvray not, which ui)1
tsnetrate to the furthest areas. This is placed first beoauao tt t: c the
rest important relation to Chirara recovery. In the proposal there are
accurate estimates as to the cost, labor, materials, and tine involved
for building the railways. This proposal embodies the valuable co pcrience
of many specialists.
By a comparison of the varioua undertal3nds in this five-year plan;
.n which industry, mining:, and electric pourer take up 50 percent of the
total expenditures, it is evident that c ina'rr r-,csl is industriaiizatien.
f.7.AS.IF CATION
MATE NAW I NSRe _ r I V'"TRIF_tUITOr~ ~4~- ~~--
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conditions in North China and Manchuria. As to Kiangsi in central China,..
element is of at importance.
works at An-ehan would require 10 million pounds and the work of several
teas of thousands of laborers; half a year would be needed for a detailed
study of damage. (See the Shen Pao for 30 October, last year). a can
A British commercial mission last year inspected the steel :corks at
of the products is not maintained and the industry itseu arses up.
n
occapa
protection and. guidance are not strong enough. (6) There has been no
honest effort to expand and improve, and to study types of raw materials
difficult to survive and expand even under the best natural conditions,
the hardest problem being that of power. (2) Nine mines out of ten are
still in the conservative handicraft stage; lackir.g technical and
commercial managers, they %aste labor? money, and material. (3) Many
nines Sack capital for transport of materials and products and hence
have greatly increased e..penses. (4) Flooded with foreign goods, rural
economy goes bankrupt and people have little buying power. (5) fro-
duetion and marketing are not regulated, supply is not coordinated,
al association are not well organized, government prahiotion,
tio
mines are privately operated, with more than ten companies working them,
producing about 300 tons daily of high grade coal. But transport fr:am,
the mines is difficult, resulting in high costs, which in turn affects
production and causes the present coal shortage in Nan-chang. Again,
in and near 3zeohuan a mining investigation group recently set forth the
difficulties of mining in Seechuan as follows l) Lack of capital
turnover; high interest rate, urgency, and complications in getting loans
from government banks. a"maller mines cannot stay open_ so that the
cost is increased, finances run dry, and production is lessened.
r'edium-eased mines lactdnt, machines, tools, and such equipment, find it
u
o
a
which is hard to more because of shallow water and shoals. The Feng-choong
1,e00,00 yuan per ton. All this mining is carried on by crude methods,
and the mineral living conditions are worse than they were formerly.
Three American specialists who are Investigating are planning new
ways of mining. In addition to these mines there is the Tzu-ho mine which
produces ordinary coal, now being worked by hand, with a daily production
t 300 tone There is now a Stock pile of more than 30,000 tons,
bo
f
The tungsten mines at Ta-Ytt in South Kiangsi are now also not in
operation. The Office for the Control of Special Minerals of the National
Resources Comadssijon has onl,v a little more than.100 men there who produce
__~ -aew.a
t an
t
Other plants - distillin:-, dyin:^, . saving -- have s oppe ~ro
have not recovered.
e x
r
n
rower is better in :'an fisien, the co t is one third more than in Nan-Chang.
d
d 4
the industry and minis; situation gets worse every d..y. In the Plata.
of the Hsing--yeh Company, which is financed jointly by the Joint Gffice
of the Four Goverment Banks and the provincial treasury, the machinery
is largely old and outmoded and cannot hear the load, for instance, in
the Nan-chang, Chi-an, Kan Ifeien and otter electric rower plants. There-
fore, there is not enou h electric rower. In Old-an eloet_ic l3?hta are
io ? to oil lama and tactic generally use E;as lamps. .chile electric
i
f
p
e
AO
five-year plan in heavy industry. (See Fmpm Lint r`vvcnbe_ ).
Mr Chien Chang--chao has explained this. A United ..-ess dispaten from.
According to the chairman of the Itesourcer Cormission, Ur C1'ien
aration last y -ar for nuahing the
re v,as ar-4 Pre
th
1 h
- 2 .
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the Tien-oh'ing u`aehine ';;orlts). The plan is to provide for the production
of all sorts,of metal products for the. entire nation. hen neceasary,
and Manchurian iron and steel industries (es the Shih-Ching-shan Steel
.;orke at Pei.-p'i.ng, the An-shan Iron 7iorks, the Tien-ch'inr, Steel works,
rrcuLpment, and to plan lar.-c-soa]a production for eatating forth China
was ordered by Soong to visit with bureau chief Sun YU.eh-ch'i iron and
,steel plants in North China and !anchuria, inaludinc enemy and puppet
of 17 December, this cowission given to Chen was very important. Chen
war products."
At the end of lest year a member of the Supreme Economic Council,
Chen Shoos-ehang, was ordered north and at Pei-p'ing inspected the
Shih-chine-shan iron and steel works; then he rent to the T ion-chin;
iron and steel works of the North China Steel and Iron Company. Then
he visited the silk plant and other plants belonging to tha Tien-Ching
MaachIne Works of the !L-+-4 oral resources Commit ssi nn, ' Lnteu he ~ went to
Manchuria to see the An-shan iron plant, etc., and inspect conditions
in the remaining industrial equipment. He returned to Nan-ching to
report to President Soong of the Yuan and suggested a clan for a study
of the development of industry in China. According to the Central News
electric plants. Thess are the chief elements in the heavy industry plan.
Part has been. taken over from the Japanese. The major portion produces
all returned students who are engineers and pizr:nera, are ` Lhe Coiaoission's`
staff. Under them are 220,000 experienced miners. Under the Commission
are 105 units, -,,bracing 42 basic types of industry, 33 mines, and 30
Resources Cozrmission, and a number of light i.t:duatries have already begun
work. Mr Ch'ien is now leading 35,000 men in a Youth Army. These :aen,,
Nan-chine, 30 Octobc.r, says: "This plan has been active ~ pushed by the
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equipment per year, and L'anohuria several tames that amount. This is a
elan for North China and Manchuria to become self-sufficient in industrial
m;xlmum annual production of 600 tons. It has sufficient raw materials
for 3 years. The An-mhan Iron Works, when operated by the Japanese, had
a maximum aniaai output estimated at 3 million tons. Ulhen it. opens again
it can regain this production figure. At present calculations the North
China iron industry can supply more than one billion US dollars tisorth.of.'.
use low-heat diaA21ation of col. to make other by- rc:auatc,"
and abroad, is still a big question. Hsieh ahu-ying is studying how to
pitted to Premier Soong. t;ork can begin as soon as these are approved."
Dut.bow to transport An-sham's annual output of 2,300,000 tons of iron and
Plante. These have now been nr:.pared and,after further, study will be sub-
1) January also sayat "3a Yuch- h'i lids returned to Nan-ca'ing and has
asked Prendor Soong's approval of preliminary plans Co.' restoring the
iurshsn iron and steel company. Liaanwhile the three managers of the Fu-shun,
An-shen, and Pen-ah'i Plants, Hsieh Shu-yinb, Sao 1-chop, and Chang Sting-sin,,
of production in the Manchurian iron and steel industry can bet put into
?offe'et at once. A Shen-Sant; (15ukden) disr+atch in the Ta Kuni:'Pao of
According to the Central of 13 January, plans for the resumption
all industries may develop as they desire. As to enemy and puppet,in-
dustrial egr..ipment in North China and Manchuria, random sales will be
stopped, and distribution made to each factory as i't needs.
equipment'reeded for the antira country. If these plans are realized,
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implement a plan of. se ~-sufficiency, foster the establi.ahmcnt of native
and save large amounts of foreign exchange. Of all
e industries
baed
,
.
the plants in the north, the equipment in the An-shah Iron and Steel laorks
was the best. Under Japanese management its annual output was 2 million
tons; after nine tenths of its equip cnt had been removed by the Russians,
its present annual capacity is only a little more than 200,000 tons, and
its equipment still needs repairs. The three plants at T'ang--Sham,
T'ienk*eh'ing, and Shih-oh.in shun near Fei-p'ing together produce 50,000
tons a year. According to statistics, our prewar needs of about 650,000
being used for railroads. Under present eondition3 of tviaeopreaa unrest,
large-scale building cannot go on; our annual needs for iron and steal
are estimated to be 300,000 tons. After plants at An-shan, Fei-ping,
Tien-ah'ing, and Tang-chart have been restored to full production, there
vd11 be selffsufficienoy. The Central Government estimates that this
vM be possible vd.bl:in this year. The flesources C d.asion called an
iron and steel production conference in Fei-p'ing bed.nning.on t,ie 23d,.
presided over by the Casmission's vice-chairman, Sun Ydeh-ch'i. It was
decided that from the 23d+ through the 25th reports should be heard from
each unit, vrith discus dons from the 26th through the 28th. Important
decisiona?concerning the restoration and rebuilding of North China heavy
industry can be made then.
The Finance and Economic 1.3nistries recently adopted various plans
Jafenaa Council has already permitted the two m3 nistrios to draw up jointly
a set of ten regulations for taldng. new shares in mining and shipping firr.;s
on the basis of old shares, calculated accordi.rle to the present SIC value.
concerns, feeling a lack o capital, have asked the. government for loans.
The purpose of fi>dng the nee; regulations is to ge r..d of such obstacles.
STAT
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