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December 22, 2016
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June 29, 2011
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July 27, 1948
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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 'B.S.6,/OM0 N. a Mdl.[0. ise nMnaanww v.... ~mn.nw tlr tm otOl~u? 10 Al1Y ^AINt Nt .t O..GTAAWtlI ONtOP II rca nem rr w r~penw a. mn loll It wew.rc.o. to.. 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~- ~~-- RESTRICTED Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200203-5 Sanitized Copy Approved for Release 2011/0/6/29: CIA-RDP80-00809A000600200203-5 J I{JWED 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 . RNSTRICTEJ RESTRICTED Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200203-5 Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200203-5 0 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', 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'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 RESTED 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, Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200203-5 Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200203-5 RIMMED 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 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 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 Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200203-5