CHINA'S 1951 FOREIGN TRADE DEFICIT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700130350-7
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: September 26, 2011
• Sequence Number: 350
• Publication Date: September 21, 1953
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/02/08: CIA-RDP80-00809A000700130350-7
CLASSIFICATION RESTRICTED
SECURITY INFORMATION
CENTRAL INTELLIGENCE AGENCY
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS
COUNTRY China
SUBJECT Economic - Foreign trade
HOW
PUBLISHED Weekly periodical
WHERE
PUBLISHED Shanghai
DATE
PUBLISHED 6 Sep 1951
LANGUAGE Chinese
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w. n.. or ,.. u... ...... .u ...... ,......n.- .......
REPORT
CD NO.
DATE OF
DATE DIST..2 / Sep 1953
NO. OF PAGES 2
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
Ching-chi Chou-pao (The Economic Weekly), Vol XIII, No 1Q 1951.
jomment: The following report sussnarizes an article entitled,
"Discussion of the Present Problems of Deficit in Foreign Trade,"
by Li Shou-ch'i published in the Ching-chi Chou-pao (The Economic
Weekly) on 6 September 195'_. The article reports reasons for trade
deficits and the policies which were but into effect to maintain
balance of trade in Chir:..7
A. General
According to the record. of Chin;,"; Customs Office, the trade deficit in
China began in 1877 and lasted turti.i 1, :;. In 1950, however, of the total
foreigrr trade of China iuports were 1.77 percent and exports were 52.23 per-
cent. The reasons for this: favorable balance of trade during 1950 are as fol-
lows:
Chinn becra.:e rrr zn, eadent h:t.ion.
Chini traded with the USSR :ri satellite nations instead of with the
Capitalistic countries.
3. There were new and treater developments of igricu.lture and industry
in China.
IF. The tloverrnent revised the forei;gr trade regulations.
B. Trade Deficits
Several difficulties arose during 1951 in foreign trade, which resulted in
trade deficits. Large ports, such as T+_entein, Tningt,o, Shanghai, Wuhan, and
Canton imported more goods fror.. capitalistic countries in 1551. Furthermore,
bank loans to importers reached a siaable amount, and importers had to pay higher
rates of interest to.the banks for loans.
STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/02/08: CIA-RDP80-00809A000700130350-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/02/08: CIA-RDP80-00809A000700130350-7
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The following are the reasons for unfavorable balance of trade in 1951:
1. In recording barter agreements, the government usually recorded im-
ports first. According to the regulations, barter transactions may be com-
pleted within 4 months; and, as a result, exports were recorded later. Thus,
deficits in trade were shown on the books.
2. During 1951, profits on imported goods were greater, especially goods
such as industrial equipment and materials According to statistics,, profits
on imported goods averaged 16.6 percent of the selling price for June 1950 and
24.2 percent for J..ly 1950, whereas profits on exports averaged 5.9 percent of
the selling price for July 1950. The businessmen were eager to import goods
and consequently borrowed heavily from banks to purchase these goods.
3.
goods.
Essential goods purchased from imperialistic countries were high-price
4- China's exports to imperialistic countries declined in 1951.
C. Policies to Maintain Balance in Foreign Trade
The 1951 policies which were put into effect to maintain balance in for-
eign trade included: (1) promoting the export of "unpopular" items and increas-
ing the production of popular items, (2) encouraging importers to purchase
goods with cash, (3) purchasing only high-quality goods from foreign countries,
and (4) encouraging the import of strategic materials.
The government also planned to encourage oversew: Chinese investment in
China's industries and businesses. It was decided to import only strategic ma-
terials from capitalistic countries and export "unpopular" goods to th, e coun-
tries.
Declassified in Part - Sanitized Copy Approved for Release 2012/02/08: CIA-RDP80-00809A000700130350-7