SLOW ROAD TO CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000100140035-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: April 13, 2012
• Sequence Number: 35
• Publication Date: September 4, 1983
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2012/04/13: CIA-RDP90-00965R000100140035-1
IAT![ APPEARED
%.ic PAGFC.-7
Jack Anderson
Slow Road to China
American businessmen wlo expect to make a
killing in trade with mainland China are dream.
ill.-a pipe dream.
For one thing, much of what American com-
panies have to sell simply doesn't interest the
Chinese. Coca-Cola discovered this when it
opened it plant in China.'I'hough Coke has sold
well in other countries, the average Chinese
complains it's not only too expensive but tastes
like medicine. As for high-technology items, the
communist Chinese are not the kind of repeat
customers that hard-driving American sales-
men yearn for. If the Chinese do fund a com-
puter or other sophisticated piece cif machinery
they like, they won't buy in quantity like most
countries. As one U.S. official explained only
half-jokingly: "'T'hey buy two of them: one to
use, and one to take apart and copy."
U.S. sales to China have increase significantly
in the yens since the breach in the hantlxxo cur-
tain-from about $5 million in 1971 to $5.3 bil-
lion last year. But for it potential market of 1 bil-
lion customers, that's less than awe-inspiring.
'I'he amount of trade China conducts with
other countries can't be pinned down, though
.Japan is the acknowledged leader in whatever
exploitation of the mainland market there has
been. A secret CIA report explained the diffi-
culties in staking estimates from the usual
WASHINGTON POST
4 September 1983
trade data, noting: "Actual Chinese procedures
for recording trade may differ from ours, for ex-
ample, with respect to the accounting ... and
the treatment of aid goods and freight and in-
surance charges."'t'he CIA's guesswork must he
lased on "fragmentary infi-rmation," because
the countries involved don't share the data with
the West. And the information that is made
public is often unreliable.
American businessmen are likely to find the
Chinese difficult to deal with. One secret State
Department assessment observes that the Chi-
nese "are very punctilious and courteous
throughout negotiations, hut also very tough "
One problem peculiar to the Peking regime is
its combination of doctrinaire Marxism and tradi-
tional Chinese xenophobia. A top-secret Defense
Intelligence Agency appraisal, reviewed by my as-
sociate'Date Van Atta,_tells how this works:
"One significant problem is the inability of
the Chinese workers to absorb vast imports of
advanced technology. All levels of the work
force, from the lag oratory to the factory, will
have difficulty in rapidly assimilating these
high-technology imports."
'I'he appraisal continues: "While the whole-
plant purchase tends to mitigate this situation
somewhat, increasing numbers of foreign advisers
will be required for the construction of these Fa-
cilities. The presence of foreign advisers in China
is anathema to communists of all philosophical
persuasions and represents it problem that will
grow if technology imports are expanded."
'I'oavcoid the painful necessity of having foreign
advisee arxu d, the Chinese-as one example-
bought not only some U.S. aircraft engines but an
entire factory to produce more. The American
manufacturer obligingly shipped more than 27
tons of drawings and specifications to the Chinese
effectively shutting itself out of future sales.
Perhaps the most serious drawback to the
Chinese market -front the American business-
man's point of view -is that they don't have.
the money to buy much. Peking's foreign re
serves are less than $3 billion.
And unlike many reckless 'I'hird World coun-
tries, China is reluctant to borrow the funds it
needs for foreign purchases. 'T'his has given Pe-
king it high credit rating that is probably unde-
served. 't'rue regime Might be unable to handle'
large, long-term loans any better than Poland,
Mexico and Brazil.
Instead, the Chinese like to pay for their im=
ports in cash or using various barter schemes,
such as payment in kind or reimbursing the for-
eign supplier of factory equipment with goods
the factory produces in the future.
1991, unit-.41 h'es ere5y,Mkale
! Declassified in Part - Sanitized Copy Approved for Release 2012/04/13: CIA-RDP90-00965R000100140035-1