CONDITIONS OF THE CHINESE COMMUNIST GOVERNMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R003900090002-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 20, 2016
• Document Release Date: September 26, 2005
• Sequence Number: 2
• Publication Date: December 1, 1949
• Content Type: REPORT

ttlF11171:00457R003900090002-2
SUBJECT
China
TRAL INTELLIGENCE AGENCY 25X1 REPORT
RitfiATION REPORT CD NO.
Conaitions of the Chinese Cor-unist Government
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FLACE
ACQUIRED
DATE OF INFO.
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COM:DISTR. 1 Dec.1940
NO. OF PAGES
NO. OF ENCS.
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THIS IS UNEVALUATED INFORMATION
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CHOU En-lat, completely occuPied with other duties as Premier organi,ning
a TIPY, governrent, leaves all foreign affairs to CH/AO Mu, YANG Rang, nna
WATIG Ping-nan. These ren, in their tarn are also otherwise engaged in
atteniing various party reetings ana solving Petty airinistrative Problems:
YANG, who heads the foreign Policy committee has no staff nor reference
material excePt a few old conies of the New York Tires, (HIA0 denends
on the handouts of the Government news ngency, the New China News Agency,
ana WANG is entirely preoccupied with housing Problems. The Fereign
Office has no office sPace, working.in the hotel rooms occuPted by the
staff.
Officials in charge of foreign affairs have at best only a suPerficial
and incorrect knowledge of the Policies, official Position, and Public
opinion of the Western Powers anti of the Practices of diplomatic inter-
course.. Like most sections of the Chinese Corrunist Government the
foreign affairs is in corPlete chaos. The few foreign nolicy decisions
that have been made have been made on an ad hoc basis by MAO Tse-tung
and CHOU, without adequate information or consideration
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foreign
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the three cardinal princinles of Chinese Communist
-Iolicy are as follows:
"We must have allies. If CHIANG Kai-shek and the ?Vier reactionaries
are alliPA with the U.S. we rust be allied with the USSR.
"It would. be a Areal for the Americans to expect us to Guilt with
the USSR, but the American Government can exPect that we will not
always be anti-American.
"We cannot have two enemies at one tire, but 're can always have
nore than two friends." '
CHOU and. other Chinese Conrunist Party (CCP) loader bPliAlro thnt America
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is a netinn of noverty stricken slave leborees exnloited by Wall Street
billionaires, who wish to exnloit Chine through CHIANG Kai-shek. They
have no access to inforreticn to the contrary. CROU would like friend-
ship with the Americans, however, and nrobably susnects that America may
be better than lescribee to him.
1He cannot rake overtures to the U.S. at
this tire, however, for fear of loss of Soviet friendship and because he
Is restrained by the pro-Soviet faction of the OCP.
5. The attitude of the CCP toward the LS. is strongly influenced by the
belief that the: e will occur a denression in the Anerican eeenomy in the
near future comparable to the social collanse and chaos of China in the
Past few years. They believe that the. U.Se has vast surnlussee that
must be lumped on China to stave off this denression. A series of
lectures made by an American educated sraaker invited by CHOU on the sub-
ject of world-wide economic conditions were amaning to the audiences of
naive Government officials in that it showed most of their beliefs to be
25X1 quite wrong.
6. American Propaganda is making relatively little impression on Communist
controlled China. Very fey persons, not even the top leaders, listen to
the Voice of Arerica broadcasts. Soviet nropaganda is given all mossible
facilities but the response to it is very poor; during the celebrations
of the October Revolutions when theaters were requieed to show Soviet
filrs, theater owners complained of losing money, since business was poor
cornered to that for American films.
In the past three months China has had no news of the U.S. except as in-
ternreted by the Commuaists. All news is very heavily colored with
editorial comment; there is no objective reporting. For the information
of the top officials of the Chinese Communist Government a classified
net/sea-per ie circulated, which elso carries highly colored news.
8. During the Chinese Peoples Political Consulatative Conference (CFPCC)
in P3iping in late September 1949 the non-Cornunist parties gained
considerable status in the coalition government. When the basic sixty-
point program WAS drafted, merbere of non-Communist parties were repre-
sented on all drafting committees. Against Comrunist opnosition they
effected significant changes in the program. When the coalitio
government was formed they gained many cabinet posts, also against
Communist opposition.
9. The Communists nroved vulnerable to the traditional rethods of political
? bargaining: nrestige to be accorded to the elder statesran, threats of
withdrawal, of suicide, and stellar tactics. The non-Comruaist narties
maintained. a united front, despite Communist attemnts to breek it down.
These earties feel that they are now in A nosition to influence policy
and to increase their strength.
10. The National Democratic Reconstruction Association (EDRA 1.341:r (ft )
Is made up of the National Salvation Association, Vocational Education
Party, end ieeividual non-Corrunise industrialists and hankers. HUANG Yen-
p3ei (0 A ), a member of Central Peonlels Government Council, Denuty
Premier of the State Administrative Ceuncel and Minister of Light Industry
of the Chinese Cormunist Government is heed of the 14DRA, which narty also
includes a Vice Minister of Labor, the rest of the Ministry of Light
Industry, and. a deeuty chairran and. members of the economic and finance
cormittees of the State Administrative Council. Through its influence in
the financial and light industry divisions of the Government, in which the
Chinese Communist Party is cornletely ladking in coreetent nersonnel, the
VARA hopes to control the national economy. The IRA homes to cooperate
with other non-Communist groups, and build up a pro-Western orientation in
the Chinese Corrunist Party.
11. Members of other non-Comruniet nerties, such as the Kuomintang Revolutionary
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Committee Government, are usually figureheaes, with no sources of newer
except their nersonal prestige. The MIRA, however, is cultivating some
of these peoplepas the Communists seek their advice and defer to their
opinion.
12. Non-Communist leaders have found it necessary.to make public disavowals
of friendshin with America in order to preserve the eolitical gains they
have made, as any frienely gesture by foreign countries other than the
USSR made toward them results in an immediate change in attitude on the
part of their Communist colleagues. Since the noneComrunists are onerating
by very subtle means they are fearful of having their names or those of
their narties linked with countries labeled by Communist propaganda as
reactionary or' ireerialistic.
' 13. Salaries of Chinese Columnist Government officials are generally below
the mininum to provide adequate nourishment. Certain noneCommunist
officials are receiving favorable treatment, but this is referred to in
a derogatory manner in Communist pronaganda. Low pay scales are found in
Government controlled industry, where pay is lower than in private
industry.
? 14. There is a high incidence of illness among officials. some of it thronah
malnutrition. I
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'Many prominent Communist officials are so7ling for
25X1 gifts of books and nedicines Which can be purchased only with foreign
exchange.
15. The Government is basing its policy planning on the Supposition that all
China, including Taiwan, will have been taken over by early summer of
25X1 1950, the mainland by January 1950.1 Ithe Communist
military planners have consistently overrated the Nationalists and the
25X1 Government is unerealred in terms of policy and personnel to take over
the entire country. however, the Government must take
25X1 advantage of this situation and study =1 learn how to run the country,
seeking help from sympathetic non-Communist groups.
16. The sixty-point basic eeogram adopted by the OPFCC states the minimum
aims of the Government for China. CCP leaders have set the target date
as 1970 to complete the program. Government agencies are now developing
concrete plans after the pattern of the Soviet oFtve Year Plans", to
implement the program. The planners are consulting fully with and
accepting the advice of non-Communist members of the Government, naruum,..
larly in economic matters.
17. Very few plans are firmly fixed yet: immediate pressing ProLlems are
settled by high-ranking Communist leaders on a merely ad hpabasis. These
leaders find they are much occupied with eetty administrative matters and
openly complain that their subordinates are not competent. They are
relying increasingly on experts who are not Communists.
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the Ministries of Trade and Heavy Industry
admit the faliacy in the narty line that the USSR can
supp na s import requirements. Although requirements have not been
calculated in detail it is already obvious that economic reconstruction
will demand materials only Western countries can provide. The same situ-
ation holds true with regard to technical advice.
19. Meenwhile the Government nlans to fill their immediate requirements by
barter with the USSR and by purchase throlgh Hong &neg. . Barter agreements
similar to the one completed, between the USSR and the Northeast Government
are expected to be made between the USSR and North China. These agreements
are to supply the immediate need for petroleum products.
20. The Government will allow no further emmorts of foodstuffs, especially
rice. Since the present deficiencies are the result of raising food with
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a low calorie content, farmers are to be ordered to grow such things as
sweet potatoes. China will grow her Own cotton also.
21. Because the USSIT,; is the only available source of rolling stock and
equipment, the Government is now planning to convert China's railroads
to the wider gunge, of thP Russian railroads.
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