(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85S00362R000400040002-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 12, 2016
• Document Release Date: August 16, 2001
• Sequence Number: 2
• Content Type: OUTLINE

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I. Summary of Major Developments During 1956 and Prospects 1
for 1957 ........................
A. Level of Trade . . . . . . . . . . . . . . . . . . . 1
B. Volume of Trade and Transport Services . . . . . . . 2
C. Impact of the Closure of the Suez Canal . . . . . . . 3
II. International Trade and Balance of Payments . . . . . . . 5
A. Total Trade and Balance of Payments . . . . . . . . 5
1. Level and Direction of Trade, 1955 and 1956 . . . 5
2. Balance of Trade . . . . . . . . . . . . . .
3. Balance of Payments . . . . . . . . . . . . . . . 7
B. Trade with the Bloc . . . . . . . . . . . . . . . . . 8
1. Trade with the USSR . . . . . . . . . . . . . . . 8
2. Trade with the European Satellites . . . . . . . 10
3. Trade with the Far Eastern Satellites . . . . . . 10
C. Trade with Non-Bloc Countries . . . . . . . . . . . . 11
1. General . . . . . . . . . . . . . . . . . . . . . 11
2. Imports . . . . . . . . . . . . . . . . . . . . . 11
a. Recorded Imports . . . . . . . . . . . . . . 11
b. Use of the CHINCOM Exceptions Procedure . . . 18
c. Unrecorded Imports . . . . . . . . . . . . . 19
(1) Transshipments of Western Commodities 21
Through Soviet Bloc Countries . . . . .
(2) Unrecorded Imports Through Hong Kong . . 22 21
(3) Unrecorded Imports from Macao . . . . . . 23
(1) Unrecorded Imports from Japan . . . . . .
(5) Unrecorded Imports from Southeast Asia 23
(6) Unrecorded Imports from Uruguay . . . ? 23
3. Exports . . . . . . . . . . . . . . . . . . . . . 23
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a. Recorded Exports . . . . . .
b. Unrecorded Exports . . . . . . . . . . . .
III. Volume of Trade and Transport Services . . . . . . . . .
A. Total Trade . . . . . . .
B. Total Transport Services . . . . . . . . . . . . . .
1. Shipping Service . . . . . . . . .
2. Interior Transport Service . . . . . . . . . . .
a. External and Internal Arrangements for Move-
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23
30
31
33
33
36
ment of Foreign Trade . . . . . . . . . 37
b. Changes in Facilities for Moveme?it of Foreign
Trade . . . . . . . . . . . . . . . . . . . 38
(1) Railroads . . . . . . . . . . . . . . . 38
(a) USSR . . . . . . 38
(b) North Vietnam . . . . .. . . . . . . 39
(2) Roads . . . . . . . . . . . . . . . 39
(3) Inland Waterways . . . 40
(4) Air . . . . . . . . . . . . . . . . . . . 40
C. Overland Trade and Interior Transport Services . . . 1+0
1. Total Overland Trade . . . . . . . . . _ 40
2. Trade with the Free World . . . . . . . . . . . 40
3. Trade with the Bloc . . . . . . . . . . . . . . . 41
a. USSR . . . . . . . . . . . . . . . . . . . . 41
(1) Imports . . . . . . . . . . . . . . 41
(2) Exports . . . . . . . . . . . . . . . . . 43
b. European Satellites . . . . . . . . . . . . . 44
(1) Imports . . . . . . , . . . . . . . . 44
(2) Exports . . . . . . .
44
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c. Far Eastern Satellites . . . . . . . . . . . 4+
(1) North Korea . . . . . . . . . . . . . . . 4+
(a) Imports . . . . . . . . . . . . . . . 44
(b) Exports . . . . . . . . . . . . . . . 4+
(2) North Vietnam . . . . . . . . . . . . . . 45
(a) Imports . . . . . . . . . . . . . . . 4+5
(b) Exports . . . . . . . . . . . . . . . 4+5
1+. Significance of Overland Foreign Trade Traffic . 45
D. Seaborne Trade and Shipping Services . . . . . . . . 46
1. Trade with the Free World . . . . . . . . . . . . 46
a: Imports . . . . . . . . . . . . . 46
b . Exports . . . . . . . . . . . . . . . . . . . 4+7
2. Trade with the Bloc . . . . . . . . . . . . . . . 50
a. USSR . . . . . . . . . . . . . . . . . . . . 50
(1) Imports . . . . . . . . . . . . . . . . . 50
(2) Exports . . . . . . . . . . . . . . . . . 50
b. European Satellites . . . . . . . . . . . . . 51
(1) Imports . . . . . . . . . . . . . . . . . 51
(2) Exports . . . . . . . . . . . . . . . . . 51
c. North Vietnam . . . . . . . ? ? . . . . . . . 51
3. Shipping Service . . . . . . . . . . . . . . . . 51
a. Review of Non-Bloc Shipping . . . . . . . . . 51
(1) Arrivals . . . . . . . . . . . . . . . . 51
(2) Departures . . . . . . . . . . . . . . . 53
(3) Significance of Non-Bloc Shipping in the
China Trade . . . . . . . . . . . . . 54+
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b. Review of Bloc Shipping . . . . . . . . . . . 55
(1) Arrivals . . . . . . . . . . . . . . . 55
(2) Departures . . . . . . . . . . . . . 55
(3) Routes Employed . . . . . . . . . . . . . 57
(a) General . . . . . 57
(b) Tanker Voyages from the Black Sea . . 57
c. Utilization of Capacity of Shipping Engaged
in Communist China's Seaborne Trade . . . . 59
d. Port Activity . . . . . . . . . . . . . . . 61
(1) Bunkering . . . . . . . . . . . . 63
(2) Non-Bloc Deliveries of Merchant Ships
to the Sino-Soviet Bloc 64
(3) Non-Bloc Repairs to Soviet Bloc Vessels . 64
IV. Relationship of Chinese Foreign Trade to the National
Economy . . . . . . . . . . . . . . . . . . . . . . . . 71
A. Foreign Trade in Relation to Gross National Product 71
B. Contribution of Imports to Economic Construction
and Military Development . . . . . . . . . . . . . . 71
C. Internal Resources Allocated to Exports . . . . . . . 73
D. Economic Growth and Future Trends in Foreign Trade
of Communist China . . . . . . . . . . . . . . . . . 73
V. Impact of the Closure of the Suez Canal on the Trade and
Transport of Communist China and Prospects for 1957 . . 77
A. Impact of the Closure of the Suez Canal . . . . . . 77
1. Effect on Shipping . . . . . . . . . . . . . . . 77
a. Rerouting of Vessels . . . . . . . . . . . 77
b. Tightening Ship Charter Market , . . . . . . 77
c. Bunkering Difficulties . . . . . . . . . . . 78
d. Increased Shipping Costs . . . . . . . . . . 78
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2. Effect on the Seaborne Trade of Communist
China . . . . . . . . . . . . . . . . . . . . . 79
a. Merchant Ship Arrivals in Communist China . . 79
b. Reasons for Decrease in Merchant Ship
Arrivals in Communist China . . . . . . 83
3. Diversion from Ocean Shipping to Rail Transport . 88
B. Prospects for 1957 . . ? . . . . . ? . . . . . . .
90
1. Trade . . . . . . . . . . . . . . . . . . . . . . 90
2. Transport . . . . . . . . . . . . . . . . . . . . 92
Appendix
Statistics for the Foreign Trade of Communist China,
1950-56 ....... ................. 101
1. Geographic Distribution of the Foreign Trade of Communist
China, by Value, 1955 and 1956 . . . . . . . . . . . . . 6
2. Estimated Trade Balances of Communist China, 1956 . . . . 7
3. Estimated Balance of Payments of Communist China,
1955 and 1956 . . . . . . . . . . . . . . . . . . . . . 9
4+. Recorded Imports of Communist China from Free World
Countries, by Value, 195+-56 . . . . . . . . . . . . . . 12
5. Distribution of Recorded Imports of Communist China,
from Free World Areas, 1954-56 . . . . . . . . . . . . . 16
6. Estimated Commodity Composition of Recorded Imports
of Communist China from Free World Countries,
1950-56 . . . . . . . . . . . . . . . . . . . . . . . 17
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7. Value of Exceptions on Notice to CHINCOM, by Country,
1952-56 . . . . . . . . . . . . . . . . ... . . . . . . 20
8. Unrecorded Imports of Communist China from the Free
World, by Source, 1956 . . . . . . . . . . . . . . . . 21
9. Estimated Transshipments of Free World Exports Through
Gdynia to Communist China, by Category, 1951 . . . . . . 22
10. Distribution of Recorded Exports of Communist China
to Free World Areas, 1954-56 . . . . . . . . . . . . . . 24
11. Recorded Exports of Communist China to Free World
Countries, by Value, 1954-56 . . . . . . . . . . . . . 24
12. Area Distribution of the Imports and Exports of Communist
China, by Volume and Means of Transport, 19o . . . . . 32
13. Total Ship Arrivals in Communist China, 1951-56 . . . . . 35
14. Estimated Overland Imports by Communist Chin from the
USSR, by Type of Commodity and by Means of Transport,
1956 .......................... 42
15. Estimated Overland Exports by Communist China to the
USSR, by Means of Transport, 1956 . . . . . . . . . . . 43
16. Recorded Imports from Hong Kong by Communist C-hina, and
Macao, by Volume, 1956 . . . . . . . . . . . . . . . . 48
17. Recorded Exports to Hong Kong by Communist China, by
volume, 1956 . . . . . . . . . . . . . . . . . . . . . . 49
18. Seaborne Exports by Communist China to the European
Satellites, by Commodity, 1956 . . . . . . . . . . . . 52
19. Changing Pattern of Soviet Bloc Arrivals in Communist
China, 1955 and 1956 . . . . . . . . . . . . . . . . . 56
20. Soviet Bloc Tanker Departures from the Black Sea with POL
for the Communist Far East, 1952-56 . . .. . . . . . .
58
21. Soviet Bloc Tanker Departures from the Black 3ea with POL
for Areas Other Than the Communist Far East, 1956 . . . 59
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22. Utilization of Shipping Capacity Involved in the Sea-
borne Trade of Communist China, 1956 . . . . . . . . . . 60
23. Activity of Ports of Communist China, 1956 . . . . . . . 62
24. Ships and Services Acquired by the Soviet Bloc from the
Free World, 1956 . . . . . . . . . . . . . . . . . . . . 65
25. Soviet. Bloc and Non-Bloc Registered Shipping Arriving
in Communist China, January-April 1957 . . . . . . . . . 80
26. Average Monthly Gross Tonnage of Soviet Bloc and Non-Bloc
Registered Ships Arriving in Communist China, January-
April 1955, 1956, and 1957 . . . . . 84
27. Origin of Soviet Bloc and Non-Bloc Registered Shipping
Arriving in Communist China, January-April 1956 and
1957. ......................... 85
28. Estimated Balance of Payments of Communist China, 1957 . 92
29. Origin of Soviet Bloc and Non-Bloc Registered Shipping
Arriving in Communist China, Selected Periods, 1956
and 1957 ........................
30. Origin of Soviet Bloc and Non-Bloc Registered Shipping
Arriving in Communist China, January-August 1956
and 1957 . . . . . . . . . . . . . . . . . . . . . . . . 98
31. Estimated Yuan Value of the Foreign Trade, Imports,
Exports, and Trade Balances of Communist China,
1950-57 . . . . . . . . . . . . . . . . . . . . . . . . 102
32. Percentage Distribution by Value of the Foreign Trade
of Communist China, 1950-56 . . . . . . . . . . . . . . 103
33. Estimated Yuan Value of the Direction of the Foreign
Trade of Communist China, 1950-56 . . . . . . . . . . . 104
34. Selected Capital Movements in the Balance of Payments
of Communist China, 1950-56 . . . . . . . . . . . . . . 105
35. Comparison of Estimates of the Foreign Trade of Communist
China with the USSR and the European Satellites . . . . 106
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36. Estimated Dollar Value of the Imports and
Exports of Communist China, 1950-56 . . . . . . 108
37. Estimated Dollar Values of the Foreign Trade
of Communist China, 1950-56 . . . . . . . . . . 109
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Figure 1. Foreign Trade of Communist China,
1950-56 . . . . . . . . . . . . . . . . . 2
Figure 2. Soviet Bloc and Non-Bloc Registered whip-
ping Arriving in Communist China's Ports,
January 1951 - December 1956 . . . . . 4
Figure 3. Merchant Ship Arrivals in Communist'China,
1951-56 . . . . . . . . . . . . . . . . 52
Figure 4. Merchant Ship Arrivals in Communist China,
by Country of Registry, 1956 . . . . . 54+
Figure 5. Origin of Merchant Ship Arrivals in Com-
munist China, 1955-56 . . . . . . . . . 54
Figure 6. Merchant Ship Departures from Communist
China, 1956 . . . . . . . . . . . . . . . 51+
Figure 7. Destination of Merchant Ship Departures
from Communist China, 1955-56 . . . . 54+
Figure 8. Non-Bloc Merchant Ships in the Coastal
Trade of Communist China, 1956 56
Figure 9. Communist China: Railroads and Selected Inside
Roads, October 1957 . . . . . . . . Back Cover
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COMMUNIST CHINA'S IMPORTS AND EXPORTS, 1956:
TRADE AND TRANSPORT INVOLVED*
I. Summary of Major Developments During 1956 and Prospects
for 1957.
A. Level of Trade.
The foreign trade of China** in 1956 was announced as 10.9
billion yuan (approximately US $4.4 billion***), compared with 11
billion yuan in 1955, marking the first year in which China's trade
has declined. The decline was on the import side and reflects a
sharp reduction of receipts under Soviet loans. (See Figure 1.****)
A further decline in trade is planned for 1957, with total
trade expected to be 9,955 million yuan (slightly more than $1i bil-
lion), or 8.4 percent less than in 1956. For the first time, ex-
ports will decline. This further decline in trade reflects the
economic maladjustments resulting from the overambitious economic
activity of 1956 and the effects of typhoons and floods on the agri-
cultural production of China. Despite this decline the foreign trade
goal of the First Five Year Plan (1953-57) is expected to be over-
fulfilled by 6.1. percent by the end of 1957
Trade with the Free World in 1956 rose by more than one-
third and accounted for almost one-fourth of China's total trade,
compared with less than one-fifth in 1955. Unrecorded imports fell
slightly from $76 million in 1955 to $65 million in 1956, largely
as a result of the increased use of the CHINCOM exceptions pro-
cedures. The amounts licensed under these procedures in 1956 were
approximately $82 million, compared with a total of about $15 mil-
lion for the preceding 4 years. By mid-1957 the UK, followed by
most other CHINCOM countries, had abolished the China differential,
* The appendix (see p. 101, below) presents the revised estimates
of value and direction of China's foreign trade for the years covered
by the previous studies published in this series (EIC-R1 through
EIC-Rl-S5), as well as a discussion of the problems involved in the
conversion of yuan values to dollar equivalents.
** Unless otherwise specified, the terms China and Chinese are
used hereafter in this report to mean Communist China and Communist
Chinese.
*** All dollar values in this report are in terms of US dollars or
equivalents.
**** Following p. 2.
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applying COCOM trade control rules to the entire Sino-Soviet Bloc,
thereby largely nullifying the importance of the exceptions pro-
cedures.
Trade with the USSR declined about 15 percent, and trade
with the Far Eastern Satellites fell slightly -- together offsetting
an estimated 13-percent increase in trade with the European Satellites.
A further shift in the direction of trade toward the Free World is
expected in 1957.
In 1956, China achieved for the first time an export surplus,
which amounted to about $115 million and which consisted of a $90-
million surplus with the Free World and a $25-million surplus with
the Bloc.
The balance-of-payments position of China appears to have
deteriorated in 1956 and 1957, reflecting in large part the sharp
reduction of receipts under Soviet loans, the increasing commitments
for the repayment of previous Soviet loans, and'the further extension
of China's own aid program. Despite the development of an export
surplus in 1956 and 1957, it appears that China has been hard-pressed
to meet its foreign exchange commitments and has had to reduce its
holdings of foreign exchange and gold as well as to obtain short-
term credits from the USSR.
B. Volume of Trade and Transport Services.
The tonnage volume of China's trade in 1956 is estimated to
have been 17.4 million metric tons,- divided equ?1ly between sea-
borne and overland transport. The volume of exports is estimated
to have been 111.5 million tons (primarily agricultural products and
minerals), and imports 5.9 million tons (primarily machinery, petro-
leum, fertilizers, iron and steel, and other in& strial materials).
Railroads continued to carry approximately 95 percent of
China's overland foreign trade. The opening of the Trans-Mongolian
Railroad on 1 January 1956, in offering the shortest route between
the European USSR and central and south China, d..verted a consider-
able volume of traffic from that portion of the Trans-Siberian Rail-
road line connecting with the Chinese system at Otpor. Nearly
two-fifths of the 1956 Sino-Soviet rail freight moved on the Trans-
Mongolian Railroad, more than two-fifths moved through Otpor, and
approximately one-fifth moved through Grodekovo. The substantial
restoration of railroads and roads in North Vietnam facilitated the
* Tonnages throughout this report are given in metric tons unless
otherwise indicated.
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BRIEF FOR: Director of Central Intelligence
THROUGH: Deputy Director /Intelligence
16 DEC 1957
SUBJECT: Briefing Note on IAC-D-42/1 for IAC Meeting on
17 December 1957
1. This memorandum provides, for your information, a brief note
on the seventh in the series of periodic EIC studies on Communist China's
trade and transport (EIC-Rl series). This study covers calendar year
1956 and prospects for 1957.
EIC-Rl-S6 was approved by the
EIC on 21 November 1957. There are no known agency reservations or
unresolved conflicts embodied in this study.
2. Some highlights of the paper follow:
a. The value of Communist China's 1956 total foreign trade
decreased slightly for the first time. This decline was on the import
side and' reflects a sharp reduction in receipts under Soviet loans. The
tonnage volume of this trade, however, increased and was equally
divided between seaborne and overland transport. In 1956, nearly two-
fifths of the Sino-Soviet rail freight moved over the Trans-Mongolian
Railroad.
b. Trade with Free World countries continued to rise in 1956,
while trade with the USSR declined. The value of imports from and
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SUBJECT: Briefing Note on IAC-D-42/13 for IAC Meeting, 17 December 1957.
exports to the Free World rose sharply in 1956.
3. In the Appendix, this year's report presents revised estimates
of the value and direction of trade for earlier years, as well as a discussion
of the problems involved in the conversion of yuan values to dollar equivalents.
4. The IAC members should be asked to approve the subject report,25X1C
25X1 C
as they have previous ones in thi
Chai'Mman
Economic Intelligence Committee
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BEGET