THE FLOUR INDUSTRY OF CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700080251-3
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: September 8, 2011
• Sequence Number: 251
• Publication Date: September 10, 1952
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700080251-3
!ANGUAGE
cJASSIFICaTIDN ~~lc-znl~
CF'ivTP,AI_ INTP! I iG~m:+F
lriFCZRU!A-rl~ns ~Ra~n
~rARElCild IJ~~Uhl~tiTS OR S2r~Dld 6F.7, rvvCii,S s 6
17#+FfFrJ rrnwt'w ~.
lir'ECT ~5tpa..sst _, Zrduu~r
_ ,flour sitllm
HONE
PUSLISHEb >~Cntlily Paric33cP1
V6NERE,
PUt3LJSHED rL'3.?,~iuii
G0.TE
PU?sLISHEG` ig ttYat 1~~50
'~R-'tD h%Nrnrr WnWM~ uCOmenoa rtvtrnw nt errroau o:tuu
?- ~?, r~~8 e~xuu ~""su tut OLIN or urwra.t acr H
O, tR tDtlT'M III iR iJJ~ TD ~r~0lLltalMtlEfo IttlOC et na
lawns n ur. anonrnoo or nu rou n rronuno.
:~~~ v?r
CD N.U.
DATE CE
DATE DIST. (~ 3ep 19:z
NU. Ui= ?AGES 22
CI IDtli cur_mT
~~~ ~ vt IV
REPORT NU.
THIS IS UNEVALUATED lNFURP2~TIUN
~~~a?~_veh (Chia.:. Zaiestr}~}: .->u 4vl lT
-, &:~ 5, 190,
I. FAGTpP,g AFESC~'Iti~ I~IIt3'P%'
g r?Rtalt o that flour induetrr in the SisabhAi-&u1lkoh arena 18
~' amttgrsi attd econo>aie corditionn, 1Z e8ditioa to the Qoslaasr~g cr+p~::t..
bag's,, or 6. `, percent, Tainan~o capacity is 29,636 bags, (5.8 Percent
of the total) a:id peiping~a capacity Is 27,063 bags {5.3 percent of the total).
R. Production by kdmlaiatrative Re
alone
The daily Productive capacity of Eeat China is 214,034 bags, over 40 p4r..
cent of the daily, national preductirc capacity. Forth China~a capacity is
99,020 bags a de,,,y, which ie about 19.6 percent ai' the national capacity. The
productive capacity ocaCecital-t~tchaChiaa is 49,978 baggy xhich is 9. v? ~,r_
coat of the aA+i_,~, pa YF
or 6.5 PerCeat of the national. cagaci~ity of Aorthxeat China is 32,778 bags
oo'mparatively e~71, Y? The capacity of Southxsat China is
G. Pruluction by private and pnbllc lihterpriee
The daily prodta^.t1v` capacity trf sate-
is !about 22.2 percent of the national productoivedcs~$ is 114,723 bags, xhich
of private c~iYla ig 398,20c pacify, The daily capacity
lA111s oxned 3oistly by the state ~7a.7 Percent of the netiaaal capacity),
cent of the national Capacity,, Private enterprise produce about 1.1 par-
II. PRDyLT"PIO~ AHJ MA.RIhT CO1~lTI0ftS
About 130 million people in China eat xheat products as their main diet.
if all those people should eat ~chlne-P-o,:eaeed floor, one billion bags of
flour xovld be ne3eded. In other xortie, xe need about 500 million picula of
xheat. AcCOrfling to the total figure Given by the 691niatry of Agriculture,
hoxever, last year~o xheaL? production xas about 400 million piculs. Subtractlag
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 t;is~ a~cst]C necec~saty :or mending end taaatr~9, t~ 7#h;.st to be uae3 for :aoa
zrlx'9oCSO Go.s not ozceen 3~0 eillio]a gictils. %S tip entire A.~o!xnt is u ed
to uYnIIvee "&]~tvm etnen.R !Rl ~s:'=_.Et ^: ..S m: ~niv :rw "_~~?, __ __
ei' ]rheg~, nhavt 690 mi.l]ion bags o2 Y1ovr srovld be pavducerd; L'at the prc ~~est
2'aailities matt lso iz~rsa~:ad Poa3rfold to art tht$ igoal.
It is st,ll tCO early tc try to inerer.~e the &~.~raet for ~.ehinA-pro: es?~cl
?lC;s. Coal, rhrn the rural acona~y shame STO3ro9a a.?+zi the fax~ers stecderd
04 li~rlAg Aa ?~roved uiii Zt be pasaiblr. to fiE~3 a ?w"ut-ter p.3rket for th3
~ch4ffis.proceseed fi~ur.
Ia the pest, ~as:::t of the P1our pr~~~ c?3 in @hst g'ranghei na:3 c~:.ntsou Ar?:~sa
h?I$6 aOl.d is Borth Ch:rax. Shsngh8i A1CSie 8T.73S}ySf3(a PnTMr672t 12 J~illin~. ~?A,Se vC
2'1GC3x' tv ~Trr-iu. ~:t;.r~ ?~varf yvr3. :'2v~c? orrid 7s~ a?'iGntsin ~;svat~A to c0 ci.lila;1
bra every year. ::cis caastituteo nbosat oa9 at]~srter cf the entire ar~uat fa.
t~ nestles. Qor tlxis reaeor~ ilentain is called tt:a ~-eateat Ylo?.u? ~:r~.t in
~.st Asia..
In recexat yzars, seaaorts in Bo-.9 G-nsna es::z? tz ah~a the nrouat of v".ayst i~uix~:d Yon Pull oporati4~
aS' tlf9 f1aL6r mills in each eras oY China. it tra ~y deriae estimates oS
~oseiblc? surpluses.
- 7 -
RBSlAICi~t
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 _. _> _
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hbble 2 ZTastit >t'roffnctiotc aad Anoant Eec~ .,
_ - tl~AYy~ Pnr Ftt11 O~~ef'3tion_ e+" ~ n?~,. trt~ i ~..
k~oounta
Far TA,a
ih~ sba
--,~,-...
>?eq{uix~a
3oed
]3aZ~nce
8equired tlmo,wt
For mil
f31.:~r. -
Atio:~ of I3111
cc
~F=~'i~son
,s: Sugg~y
s
say? I?eas~8
'13,576
80,231
225,5:6
442,993
-217
,367
53,576
60
a-
34,231
i01 86
C
3, ~3
r-18
331
,
w
46,000
124,
0~
359,700
,
??235, 700
138,000
67,598
203,6c:'
75,7cti
a-,t27,896
100,C0i1
8
35,109
143,512
16 0~0
~
'
4127
422
3
,000
3e, 489
60,090
6~,6
59,
,
s 474
--
--
3,oaa
'2,504
+ 7,496
--
--
65,SOO
54,031
~ :,959
-_
"_
--
57,000
u6,t454
fi 10
546
`-
B,OG'.5
7,671
,
t 329
--
_'
35,895
33,384
a 2,511
103,663
67,665
316,008
7-47,472
326K
,:~36
335,239
219,599
854,11
789,428
+ 56,668
dote: Tae above wheat larductien figarea ara aea~ivea from the Figures liven b~ tL;: liatioaal Too3 Canfe:eace
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 Eaued upon p_st figttree the :lxitua annum supply of wheat in our cuua4.r,~
is lane then 1s0 million picvls; norr;ally it ie anly nbcut 30 mi?.1 ion picula.
lJhe$t av?r and above the :mc::nt needed for home consumption accu~rilatea in rural
area? ixtstea3 of being shipped to city marketo. To correct such ez a_eumul.atioa
?ii: folio?sLng m=asures should be tat_o by the governcento
~.. RestrSr_t Wheat imports Yro_c foreign cot;lltrie:.
2. Ivnrave transportation betueea cities rid village,^,
3? d.a~r;r tranapertatio^, Cg5t3 for Wheat pryYu=tr.
4. Purciiaae wheat et the proper tLs.F
If all the above weasures are edgpted, the prgb'_en of Wheat surplus Kill
nq longer exist, While Wheat productiou Will also ir_eresse.
Althoi~h cheat cultivation in the 3authveat is prim?;rily a eubaidiarv
occupation during the Winter, if the msrtet warn tq be expanded, wheat pro-
dnctian there xould increase accordingly, If all these methods are adop*,ed,
the milling industry will no longer depend on foreign sources for raw materiels
?s In the pact.
't'able 2 reveai,? that the areas ehich have they least wheat are Kiangpu,
Chekiang, and Anhwei in treat Chinn, It is estieete3 tt;at these areas have an
annnsl shortage of c^3 million cicala of Wheat. In the past, a considerable
aaaannt oP wheat vas imported from?1'oreiga countries by way of
1937 to 1939, gh"*ghai imported about 9 million elect; of foreign }v eat aFyeas,
which ?oastituted about 50 percent of the total wheat needed by the floor mills
Sn that area, Ia 1931 - 1912, the amunt oP L+uported foreign wheat iacraased to
16,600,000 ;+iculs, Vhich Was over yfi percent of the wheat mechsaically milled
i.n thst area, From 1921 to 1930, foreign chest accounted fc;r abaci 28.79 per_
Dent of the total axouat ;iced by flour millh in that area.
611th the exception of Sha~ghsi, the su
industry in Chinn 1 PF~Y of raw Wt~riala far the flour
e fat-Iy equal to thz daaignd of each area. Horan Province
pralacas plenty of wheat, but there are very fax flour milli. Conaaq?,:?atly,
o villa Head Duly a fraction of the raw materia2B prod+iccd and there is a
surplne of about 15 as1111oa picctl>> of wheat a year, This ?urplus wheat is
nsualljr concentrated in thF Sr,_ro-oh'i~ H;,u-_:u?
it is shipped to 3hsnghai vie the L ~6 and R.+ai-fec[g areas before
~~ line. ung-hai Railway to Eankov vie the Peipi~g_
The ?monrit of vhest transported from this area di+penda Wean the volume
of the purch=_.eeo ands by mill operators from otber areas, Somerti~:.s it re?chee
ld s>1111on picule; norma)~y it is about 6 million piculs. Wheat produced in
the Honaa area is navally seat to the Shanghai and Haniov areas Yar milling
and than to thr. Peiping cad Tientsin areas for distribution. This is uneconom-
ical. L? the wheat were transported directly tc the Peiping-Tientsin areas
and processed there, the costa of transportatia, and distribution uauld bo
reduced by one half, For this reason ve should recenaider the advisability of
purchasing vhest Prom the Horan wren.
o Tiheat from the 8hentuag area is uauelly concentrated in T'eng gsien,
T ai-an, !Tse_y~, sad Chico-mi erase before it 1a shipped to the Teingtao
cad Teiaaii areas vin the Chiao?Chi Railxgy for procesaiag, q small quantity
is oleo transported to Shanghai. neat produced in the Hopeh area is aeon
taken to i img Heise, "Laiig_faag, Tientsin, and Ta+nag Hslea, and they t ~
por'ced tc Pripisig sad TSeotstn with greater convenience; thus, very little
wheat is transported from these tp other areas, When arrnm ,_ ~eeta.:u ;~
northern Hupeh is general],j. brought to the Chung-Chiang and Yisn_meUg areas
and is then shipped to Haakov for processing.
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 Wixear, pra,",uatiou in ftol~eh is ,just s+.uf?clent to ~:et 1oca1 needs- mhPre
13 Ao e$t:Ca9 w!a::at-prndu:ttla Brea are ~x~,, _ _ , '- 1 s lecutcd near ,.
than file o1]1s located far as:_,Vfrcmjayaheat-:rodacllaa^- ~~ f?~1~ can:.cit~~
the forF~er am ccnfronted with less acute s Y ng area. Zn other coma,
urplus problem:; than the latter.
~'or exeaple, tee northern llnhuei area actually nr~zir~d ~,2?~,~0 ba~o ~-~.7.i
percent o2' 1te production r_apaal.t3'), *~hile the Shanghai area produced 6 572,000
batio (~,y 21.17 percent of its productive capacity),
2, During a yixeat vaarket alurrp, the mt11s located near a ms~rket arcs ara
able to operate at n rate closer to their productive capacity. This means that
they sre leas aub,~ect 'to flour market recensions. For exr*~rle, sai7le it the
;oxt3rest saintained production at 70 percent opacity during that year, and
those in the Tientsin area at sore thzn 72 percent of their aapaclty.
? C..^.';-~1_u0:_.h Cui;::::,;;, ss?-are]y ariected by tlv: flour market slump
~ 1950. Its pzo3oction aae aniq 24.59'Pcrcent ui its actual capacity and 'the
amount of sales yea 52.5 porceat of the total output, This se?ans that the
market conau~d anly 12.9 percent of the areas productive ca;acity. Th1a
csuamd tlvt flour mills i.n that area to e_-perience greater diFfiauitiea than
in aqp other-area.
4? Production a.td sales in the Horthveat and Southwest are in ba]ance
at present.
III. HHPsAT FUR HrT.r.IflG 7]~US7F{Y
1SrU F7kRt0'sPS ~'OR ITS PRODUCTS
Ceata oP ray matarlaia constitute an much as 84,6 percent of the operai:ing
expenses of floor milky, The coat of transportation varies great]y; it ymy
'he a8 lox ae 3 or 4 gent, or as high as 50 percent of the total coat. `Yhera-
fore, t0 refluce proauction cvsie, sp^cini .:a~si~;s, ti w = ,-t ~? ot~.,,n to
location ~f the plant us it e.ffecta the cent of trsasport.
The following table sheen the effect oP ahippit~g coats upon ~rheat'prices
in different areas:
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3bb;LS 5. Goagari3on of `.theist Prices and TrnaL,nor',,$tioa Coates (~,;,n j
From
mO
Os T
T='O.nBpOrtatlOL nLd
aal Prices
Miscel7.enee
u
~
a
t
per catty]
.
---
..o
s
s
Hopeh
Peiping
7?T2
99
$o~h ~
Tientsin
?~~
105
shantung
Tsingtao
693
32
Shantung
Shanghai
693
171
17orth Anhvei
Shanghai
630
i41
Hupeh
Canton
71C
267
Hupeh
'duhan
71tl
15~
Southwest Region
Chungking
60tS
10~
'i'rr;:nsport3tion, etc.
COE~1:G 1U ~ OP
Total ~~O~t Or3~~ina; Prig
ts71 12,
~r 1:?.7
rbh 13,3
~-`'~ 24? g
7 i .1 22.4
5~~5
j6.6
tl71 21.4
716 i7.6
i. S'alpmente of whe~~t Prom Eopeh to Peiping sad Tientsin start fro:i Han-tnr., IIenj,-shut, Erin-lo, :~cd Ting
Hsien; transportation costs in that arcs are cecputed from the i:verage distnnoe: Sh1p~=nts of ~sY,eat Prom
Shantung to Tsingtao start from Tsina>; and k'ei Hsien, those PY?oi: Shantung to ;ilisn~liai start frota I)su.chou
and T'si-an. S6.ipmente from 27orth .0.nhvei to Shanghai start fr r. Peng-YU, Su Sates? Chu Hsien, irnd Eo-fei.
Shigne:nts from resters Hupeh to Chang-sha start from I-ch'ang e.n~i Sha-shih~by beat? Ship:~nt^ frotil axes
in Szechwan to Chungking start prom Pei ling.
ii. Expanses for unloading are determin,~d by s.ver es.
yuan per catty] in lots of rive. ~ Packing e.-zpcr.;es ara bae~i upci; 100-catty buCs (ati 30
Sii. Freight rates by truck, car, an3 by boat are the prevailing authorize3 rates,
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fia eapi.ained iu'Pebie 5, wheat g!?~att Sa thcs &ogeh emn la ::'uipyed t:~
Paf~ir6g for gro^assit~s its trnasFortaticn coat, which sroxmta to on.]y 12,&
pares t ~f tixe price of vhent,~ie the loaent. ilxe cost of transporting Hnpeh
'~Ftaat to Grnt~ ie the lxig~st, ~abo:rt 36.3 percent of t?x~ coat of the wheat.
Gaits of trma,3s.arting a2xa2t fr:,3a t~ntung sul North failxu.~i to Sh