STABILIZED MARKET AND LOWER PRICES IN CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700040462-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: October 27, 2011
• Sequence Number: 462
• Publication Date: February 19, 1952
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2011/10/31
CIA-RDP80-00809A000700040462-3
CLASSIFICATION CONFIDENTIAL ~'~-oCR1iA~
SECURITY INFORMATION
COUNTRY
SUBJECT
HOW
PUBLISHED
WHERE
PUBLISHED
DATE
PUBUSHED
LANGUAGE
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS CD NO.
CENTRAL INTELLIGENCE AGENCY REPORT
Economic - Commerce, price stabilization
Daily newspapers
China; Hong Kong
4 Sep - 17 Nov 1951
IOIO tternto enaln IUIOOY110O MnmU ltt Y11OOLL ttrtta
of ttt OOme Irn9u tmlt us U.YIM N f9OY61 KI N
t. O. C.. so MO LL. M O"BOOU. m iwultnet N iN arena IN
N In 1059.5 1 It V? tYtttt 10 Y OYOISOOI>tI ,tfOO 4 "W
Wong A LGf. 5000Nmtt 01 no rem IO OOOO.OI1tt.
DATE OF
INFORMATION
DATE 01ST. 11
SUPPLEMENT TO
REPORT NO.
STABILIZED MARKET AND IOHER PRICES IN CHINA
Increased purchasing power, reflected in greater commodity sales,
has stabilized the commodity market in China. Positive steps have
been taken by the government to control and reduce prices on essen-
tial items. Fluctuations have been slight since the 1951 mid autumn
festival when prices were held to agreed limits.
Numbers in parentheses refer to appended sources.
STATE
ARMY
IX
CONF,DEN11 E
Declassified in Part - Sanitized Copy Approved for Release 2011/10/31 :
 Declassified in Part - Sanitized Copy Approved for Release 2011/10/31: CIA-RDP80-00809A000700040462-3
The Market Information Section of the Shanghai Union Mercantile Office published the following chart (1) of
major price fluctuations for August 1951. Prices are multiples of 10,000 yuan.(1)
Commodity
Percent of
Fluctuation
Aug Hi
Aua Low
Aug Av
of Av
Posted price of parity units unit
Interest on deposits Yuan
5,403.000
0.644%
5,546.000
5,396.000
5,458.000
+ 0:43
Interest on loans Yuan
4
0
03
Interest on a
i
t
d
e
3.
3
3.30
3.33
0%
300%
3
- 3.
ssoc
a
e
ent
rprises yuan.
To
whit
l
2.916%
2.850%
2.850%
.
2.850%
79
2.26
p
e nong
utinous ri picul
Middl
hit
l
14.350
14.600
13.900
14
160
-
- 1:
2
e w
e nong
utinous picul
La
h'
fl
13.500
13.500
13.000'
.
13.130
3
2
4
c-c
e
our bah
Pen-chlang peanut oil picul
Special granulated sugar picul
13/16 fi
t
7.750
54.960
62.960
7.500
54.000
73.000
7.250
52.000
66.000
7.350
52.520
810
67
-
.7
- 5.16
-
+
.70
ne co
ton picul
42-gauge Chin-ch'eng yarn bale
20-
au
L
f
98.400
1,145.000
o8.400
1,260.000
98.400
1,145.000
.
98.400
1
242
960
0.00
7
8
6
n
O
g
ge
an-
eng yarn bale
Dra
on
h
ad
715.000
785.000
71.5.000
,
.
774
440
+
.5
+ 8
g
s-
e
cloth bolt
Sou-Chun
t
b
i
27.500
29.000
27.500
.
28
780
.31
4 4
66
-
zu
e
ge bolt
Tien-chlia
28.000
29.500
28.000
.
29
280
.
+ 4
o-jen silk box
1,516.000
1
430
000
1
4
0
000
.
.57
High-grade raw silk Ssu-ma picul
Chia
t
1,320-000
,
.
1,340.000
,
3
.
1
320.000
1,430.000
1
333
330
- 5.67
o-
so-pai coal ton
P
+.l
45.500
45.500
,
45
500
,
.
45
500
+ 1.01
ure cc
bells pi. al
I-hac (N
1)
2.700
2.700
.
2.700
.
2
700
0.00
o
kerosene barrel
Yueh
248.030
237.700
237
700
.
237
00
0.00
4
caustic soda 300 kilograms
Yun
-li
d
370.000
370.000
.
370.000
.7
000
370
-
.17
g
so
a 80 kilograms
26.620
29.500
29
500
.
0.00
Chung-fu sulfur black Sau-ma picul
No 3 red
bb
r
180.600
205.000
.
195.000
29.500
201
6
0
+ 10.82
6
ru
e
long ton
200
000 fi 7
6,004.ooo
6,050.000
5,830.000
7
.
5
932
590
+ 11.
7
,
penicillin bottle
30/42 So
i
t
1.7632
1.650
1.550
,
.
1
60
8
- 1.19
4
v
e
paper ream
Chines
36.000
39.500
36
000
.
3
1
0
37
- 9.0
e paper ream
Flyin
Horse
i
28.000
28.000
.
28.000
.
9
28
000
+ 3.31
0
g
. c
garettes pack of 20
K
-
2.460
2.460
2
460
.
2
460
.00
u
pen soap box
22.500
23
150
.
22
.
0.00
Mei-li matches 100 books
0.1-inch steel plate ton
0.4-inch
an
-
ua
jt
e
18.800
1,612.oDo
.
1,900.000
.500
1-
1,800.00
23.050
1.500
1
862
960
+ 2.44
+
+ 1
6
y
g
y
n
e
l plate ton
One-inch
ail
800.000
800.000
800.000
,
.
800
000
5-5
n
s keg
38.680
43.000
39.000
.
41.370
0.00
+ 6.95
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 Declassified in Part - Sanitized Copy Approved for Release 2011/10/31
CIA-RDP80-00809A000700040462-3
CONFIDENTIAL
Stable Economy
According to data from the Ministry of Trade of the Central People's Govern-
ment, the average index on wholesale prices for 25 essential commodities in Sep-
tember 1951 showed . rise of only 14.8 percent above the index for 31 December
1950 in Tientsin, Shanghai, Hankow, Canton, Chungking, and Sian. Taking the De-
cember index as a base of 100, the ministry gave the following indices for 1951:
March 105, May 109.1, July 111.3.(2)
From the end of September, prices of essential commodities have gradually
fallen to the August level. Comparative figures for 32 basic commodities in
these six major cities in October were 0.2 percent below September quotations.
Although prices were generally stable in autumn and winter 1950, October 1950
prices were 5 percent above September 1950. During September 1951, the price
index for these commodities rose gradually. By the end of August, the index had
reached 114.2 and, on 24 September 1951, it reached ?15.9, the highest for 1951.
The index dropped to 114.3 by the end of October and to 114.1 by 10 November.(8)
Industrial commodities showed a slightly higher increase than agricultural
commodities, since agricultural recovery has been the more rapid. Between the
end of December 1950 and the beginning of September 1951, the wholesale price
index for cotton cloth rose 23.2 percent and the index for foodstuffs rose 11.4
percent.
Prices Guaranteed for Mid-Autumn Festival
On 10 September 1951, Tientsin merchants handling oil, beef, mutton, and
slaughter hogs responded to the Central People's Government slogan to stabilize
prices of staple and supplementary foods by drafting a public resolution for
stringent controls during the,mid-autumn festival. The oil merchants convened
a standing control committee and passed a five-point resolution to guarantee
no hiking or undercutting of oil prices. Retail prices were not to exceed 7
percent of wholesale market prices. Shops instituted mutual inspections and
offenders were liable for investigation.
Retail dealers in slaughter hogs met to guarantee that pork prices would
not rise, meat would not be withheld for higher prices, weight would be honest,
and daily retail price announcements would be published based on wholesale
prices for the day from the Business Management Group, Hog Merchants Associa-
tion. Beef and mutton retailers set the market price ceiling at 900 yuan
above wholesale price 5er catty?7. Violators, detected through the mutual
inspection system, were to be punished by being shut down for 3 days.(3)
In Shanghai, the price index on 47 essential commodities for the first
10 days of September showed a rise of only 1.25 percent over the average for
the month of August. The index for the middle 10 days of September showed
greater stability in these commodities and the prices of certain items, such
as green vegetables from ?mall farms, even dropped a bit.
The Shanghai Municipal Bureau of Industry and Commerce, through agree-
ments with various trade organizations in other areas, fixed top prices for
all goods and organized the various companies to facilitate shipment of
items into Shanghai.(4)
Peiping Orders Price Reductions
State-operated trade agencies effected three successive price drops in
industrial equipment and petroleum, fol]owing the arrival of large quantities
of goods from the USSR and other friendly nations. Two successive drops in
the price of bituminous coal followed reduced production and distribution
costs in state-operated trade agencies. At the end of September, there was
a drop in the 15st price of oil and salt.(8)
CODFIDEHTIAL
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 Declassified in Part - Sanitized Copy Approved for Release 2011/10/31
JUN`LL '.JIQ\L
Late in September, the Ministry of Trade of the Central P-:ople's Govern-
ment ordered the state-operated China Industrial Machine Supply Corporation
and the China Petroleum Corporation to effect the second series of general re-
ductions in the prices of their important commodities. These reductions became
effective 25 September 1951. The reductions ranged from 5 to 9 percent of the
current prices, with an.average drop of about 6.2 percent. Reductions were
made on 32 important items including gasoline, silicon steel plate, potassium
chloride, zinc plate, red phosphorus, cast-iron pipe, and boiler tubes.
The first major price reductions of .his type were made at the end of
July 1951.(5)
Items sold during the 2-week period of the national Day celebration at
the beginning of October were offered at 5 percent below retail price. The
price of cotton padding and soda dropped during October when supplies reached
an adequate level. In Peiping, the price of cotton padding was halved within
a period of 15 days.(8)
In mid-October, the Ministry of Trade ordered the third round of price
reductions for important commodities of the state-operated China Industrial
Machine Supply Corporation and the China Petroleum Corporation. This meant
an average reduction of about 6.35 percent in the prices of 18 commercial
commodities. In Tientsin, the price of silicon steel plate was reduced 5.27
percent; gasoline, 5 percent; sodium chloride, 9.1 percent; tires, 7.41 per-
cent; and direct blacks and blues fye87, 9.53 percent. Other items included
in the reduction were zinc oxide powder, waxed belts, and penicillin. The
price reductions were effected between 10 and 15 October. Reductions in
Shanghai were expected to fallow those in Tientnin both in type of item and
in extent of reduction.(6)
Early in November, the Ministry of Trade directed the China General
Merchandise Corporation to lower sugar prices by approximately 4.5 percent.
Branch stores made the price change on 2 November. Northeast No 24 coarse
granulated sugar, handled by the state-operated Tientsin General Merchandise
Corporation, dropped from 6,900 yuan per catty to 6,600 Yuan per catty.
White granulated sugar, handled by the state-operated Shanghai General Mer-
chandise Corporation, dropped from 7,100 yuan per catty to 6,800 yuan per
catty.(7)
Market Improved
The general price stability can be credited to the rise in the people's
purchasing power, which even the most conservative estimates set at about
300 percent, since the close of 1950. The rise was 60 percent in Chekiang,
100 percent in the t,?t producing areas of northern Anhwei, and from 20 to
60 percent in other areas of the nation.(2)
Market conditions in Shanghai have improved. Pork grew scarce at the
end of August due to lack of coordination between market and supply sources.
At the beginning of September, 3,574 pigs were sent to Shanghai and, by the
middle of the month, 6,062 pigs were arriving daily. fI)aily?7 market demands
increased from 3,182 pigs at the beginning of September to 8,499 pigs by the
middle of September. This was a 30-percent increase over the figures for the
corresponding period of 1950. From 12 to 14 September 1951, the Shanghai lo-
cal product companies showed receipts which exceeded those for the first 10
days of the month. Receipts for the first half of September 1951 were 10 per-
cent greater than those for the whole of September 1950.
C-l"Winvi Tit
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CIA-RDP80-00809A000700040462-3
 r
Cooperative sales for the mid-autumn period of 1951 showed the following
increases over the corresponding period of 1950: cooking oil, 42 percent; su-
gar, 15 percent; salt, 51 percent; and mooncakes, over 300 percent. Prices
during the mid-autumn period of 1951 were more than 10 percent lower than those
for the same period of 1950.(4)
Data on state-operated commerce in October 1951 showed a one-third in-
crease in retail turnover above the September level and double the volume of
October 1950. The quantity of foodstuffs retailed was one and one half times
above that for October 1950 and cotton cloth sales almost doubled the October
1950 figure.(8)
Reflecting these impruvements in the nation's economy, the people's cur-
rency, pegged at 31,000 yuan to one US dollar on 1 October 1950, appreciated
to 22,270 to one on 10 September 1951.(2)
SOURCES
1. Shanghai, Hsin-wen Jih-pao, 4 Sep 51
2. Shanghai, Ta Kung Peo, 24 Sep 51
3. Tientsin, Tientsin Jih-pao, 11 Sep 51
4. Shanghai, Chieh-fang Jih-pao, 16 Sep 51
5. Hong Kong, Ta Kung Pao, 28 Sep 51
6. Canton, Nan-fang jib-pao, 19 Oct 51
7. Hong Kong, Ta Kung Pao, 9 Nov 51
8. Hong Kong, Ta Kung Pao, 17 Nov 51
-5-
CONFIDENTIAL
dY~'~1% eL u u ill
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CIA-RDP80-00809A000700040462-3