NEW CONDITIONS ARISING FROM THE UNIFICATION OF FINANCIAL AND ECONOMIC WORK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00039R000200050032-0
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: April 20, 2012
• Sequence Number: 32
• Publication Date: June 18, 1952
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/04/20 : CIA-RDP82-00039R000200050032-0
NeW na~d~ tioza ~ ,Ara.sa~n~?from t,hc
Unification of Financial and Economic
Declassified in Part - Sanitized Copy Approved for Release 2012/04/20 : CIA-RDP82-00039R000200050032-0
 C Su,1, ,-fr,'' 7 1, ~ ? /) 74 7
Since financial arid economic work were unified in March, new conditions
' d of transition. Basic improvements as outlined
began to appear after a pera.o
by Mao 9 that is, completion of land ro forrn, equitable revamping of trade and
industry, al reduction in military and civil expenses' etc., have
substantial
not yet been achieved. eved. However, the new conditions mark important progress
and have brought about benefits to the multitudes. These new donditions are:
1. Balance of Income and Outgo
The chief feature is that a balance between income and expenditure
is gradually being attained. During the anti~Japanese as well as the liber~
'were spent on war and inflationary problems. Before
at~.an war, our energies
March 19r0, these problems were still prevalent. After the unification of
our f is work, which was initiated at a conference held in financial and economic
March 1950, the disparity in national finance steadily declined and b;r May
of that year' balance was nerally attained. The northwest region was badly
g
has a surplus for helping the Central government. Reasons
in the reds but now
of control in national government; b} close supervision
are a) centralization
~nd) shifting of people's government energies
of collections and payments,
from meeting debts to ~ habili.tat~ion. The adjusting of relation
constructive re
ship between stateMowned and private enterprises were made possible by the
unification of these financial and economic work.
v&o'c~
VIESI
'bl~l Y tlRr~ NEW CONDITIONS ARISING FROM Tea UNIFICATION OF FINANCIAL
AND ECONOMIC WORK
2. Stabilizing of Prices
In 1949, national price fluctuations came four times, causing untold
losses. The re losses were mostly in speculators' profits. But after the
Declassified in Part - Sanitized Copy Approved for Release 2012/04/20 : CIA-RDP82-00039R000200050032-0
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/20 : CIA-RDP82-00039R000200050032-0
unification, prices settled down and are now stable. Deposits grew more and
more and the interest was cirastically lowered. Unification has brought about
these trends and has a) guaranteed steady profits to industry; b) relieved
the masses of runaway prices to raise their standards of living; c) kept
usurers and speculators from profiting at the expense of masses; and d)
ensured the flow of society's capital into productive channels,
3. Raising of Rural Purchasing Power and Circulation of Jen~m i..n Piao
This was brought about by the balancing of budget and the stabilizing
of prices. Peasants are now willing to accept Jen'min P'iao, when they only
accepted silver dollars, yarn, cloth, or salt in the past for fear of the
gradual depreication of the Yuan currency. Thus, urban rural trade was greatly
stimulated, As compared to the past when the trade between the cities and
country was conducted only on a barter system with attendant hardships, this
condition of confidence in the Jen?min Ptiao did much to restox the economy
of China; it helped greatly in restoring the purchasing power of the rural
masses.
4. Markets becoming Active
Figures from Hankow, Tientsin, and Shanghai show improvement in May
after the dull months before the new plans could take effect. What effee1 have
come about?
a. The previous false and irregular prosperity is replaced by present
improvement due to better buying power,
b. Real buying power of the masses depends on stabilization, good
crops, settled social conditions, and with general trade improvement.
That has been accomplished in the brief period since unification and
the reconstruction forces already in motion give warrant for a cautious
optimi ui
Declassified in Part - Sanitized Copy Approved for Release 2012/04/20 : CIA-RDP82-00039R000200050032-0