CHINESE COMMUNIST TRADE CONTROLS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00810A002200260039-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 14, 2016
• Document Release Date: March 28, 2002
• Sequence Number: 39
• Publication Date: September 4, 1953
• Content Type: REPORT

Approved For Release 2002/07/15 : CIA-RDP80-0081OA002200260039-7
CENTRAL INTELLIGENCE AGENCY
INFORMATION REPORT
This Document contains information affecting the Na-
tional Defense of the United States, witl}En the mean-
ing of Title 18, Sections 793 and 794, of the U.S. Code, as
amended. Its transmission or revelation of its contents
to or receipt by an unauthorl$ed person ae prohibited
by law. The reproduction of this form Is prohibited.
CONFIDENTIAL/CONTROL - U.S. OFFICIALS ONLY
SECURITY INFORMATION
25X1A
REPORT NO. I I 25X1 A
DATE DISTR. 41 September 1953
NO. OF PAGES 2
REQUIREMENT NO. RD
REFERENCES
THE SOURCE EVALUATIONS IN THIS REPORT ARE DEFINITIVE.
THE APPRAISAL OF CONTENT IS TENTATIVE.
(FOR KEY SEE REVERSE)
SOUR E:
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1. In early May 1953 all export-import firms in Communist China were under the
control of Chinese Communist customs houses. Exchange of information among
the scattered customs houses was resulting in uniform pricing for foreign
products, widespread knowledge of the activities of any given firm, and wide-
spread understanding of mainland business problems.
2. Business firms were being obliged by the Communist authorities to earn their
own foreign exchange. A firm was not granted an import license unless it
was able to export, and if it had concluded an export contract, it was able
to obtain a loan from the Bank of China to purchase commodities for export.
Upon receipt of a letter of credit from a foreign bank, the Bank of China would
transfer the loan to the firms holding the credit account. After the firm
exported the cargo, foreign exchange could be used for approved imports.
However, private business firms in Communist China were suffering a possible
50 to 60 percent loss on exports and earning profits of from 40 to 100 percent
on imports. For this reason, and because import cargoes required five to eight
months to arrive on the mainland, no merchant was able to operate without the
assistance of a government bank. '
Mainland business firms were able to obtain loans only from the Bank of
China and were required to maintain current accounts with the Bank. Within
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PACFLT
(Notes Washington Distribution Indicated By 11X11) field Distribution By
Approved For Release 2002/07/15 : CIA-RDP80-0081OA002200260039-7
 Approved For Release 2002/07/15 : CIA-RDP80-00810A002200260039-7
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the Bank of China, one employee was designated to supervise the accounts of
approximately ten specific firms. This system enabled the Government to monitor
continuously and in detail the accounts of each firm.
4. In ear.y May mainland sellers to. Chinese Communist government organizations
were being required to sign quality and quantity guarantees even after their
cargoes had been delivered to and stored in the godowns of a government organ-
ization. Months after a cargo had been placed in government godowns, the
government was permitted to make claims upon the supplier if the cargo was
considered deficient in quantity or quality. Although goods stored in damp
government godowns might deteriorate, the supplier was liable if the govern-
ment introduced a claim for defective quality.
5. Chinese Communist trade regulations were subject to change without notice.
Official written permission from the Chinese Communist authorities could be
rescinded by telephone instructions ordering cancellation of permission and
return of the written permission to the government. Permission to export
a particular cargo could be rescinded by the government after the cargo was 25X1 C
sold either by making the cargo unavailable or by prohibiting export.
CONFIDENTIAL/CONTROL - U.S. OFFICIALS ONLY
Approved For Release 2002/07/15 : CIA-RDP80-00810A002200260039-7