SITUATION SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91T01172R000200020002-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 15, 2016
• Document Release Date: April 19, 2004
• Sequence Number: 2
• Publication Date: January 14, 1955
• Content Type: SUMMARY

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14 January 1955
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SITUATION SUMMARY
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 Page
China . . . . . . . . . . . . . .
Offshore islands
Railroad to Ningpo jet ase
North Korea . . . . . . . . . . . . . . . . . 3
Possible withdrawals of Chinese units
East Europe . . . . . . . . . . . . . . . . . . .
Soviet troop rotation
East Germany . . . . . . . . . . . . . . . . . . . . 5
Increased controls in Berlin
Poland . - . . .. . . .
Civil defense
Hungary . . -. . . * . . . . . . . . . . . . . . . . . . . 7
Failure of the new course
Yugoslavia . . .
Relations with Orbit
USSR . . . . . . . .. . . . . . . .
Propaganda against West German rearmament-
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ow-
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Offshore islands: On 10 January Nationalist naval vessels in the
Tachen area were subjected to the heaviest Communist air and sea attacks
launched to date. The air assault forced Nationalist ships to withdraw,
and the Tachen garrison, one third of which is now composed of troops
newly arrived from Formosa, has been left without local naval support.
The islands have been almost entirely without air support for sometime.
These factors, together with the growing problem of supplying the
islands, have drastically increased the vulnerability of the Tachens to
further Communist attacks.
The air strikes apparently were aimed at disrupting the second
phase of a Nationalist plan for replacing the Tachen garrison with
troops from Formosa. When the first phase was begun, on 21 December,
the Communists staged a generally unsuccessful air raid over the
islands. During the second phase, on 10 January, the Tachen anchorage
was filled with ships participating in the rotation, including the sole
remaining destroyer escort in the area, three IST's, two gunboats, and
several other vessels.
For seven hours, Chinese Communist fighters and bombers struck at
the shipping and hit all three IST's and the destroyer escort. One of
the IST's was sunk, and the destroyer escort was forced to return to
Formosa. All other ships withdrew to Nanchi Island, 90 miles southwest
of the Tachens. During the withdrawal, a Nationalist gunboat was
attacked and sunk by Communist vessels which may have included torpedo
boats.
Shortly after midnight on 13 January, two Nationalist minesweepers
escorting a junk to the Yushans, 35 miles northeast of the Tschens, were
attacked by Communist ships. The results of'this clash are not yet known.
US observers report no signs that the Communists are massing troops
and boats for an invasion attempt against the Tachens, but it is
generally agreed that the Communists will renew their air and sea attacks
in an effort to destroy the Nationalist naval strength remaining in the
area and to isolate the Tachen group.
The situation in the other coastal islands was quiet this week.
Communist guns continued their sporadic shelling of the Quemoys. The
Communists allegedly are now using a new road running northeast from
Foochow to the tip of the Pehling Peninsula, opposite the Matsus, which
leads to coastal artillery positions reported to be under construction.
I I
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Railroad to Ningpo jet base:
the Chinese Communists are rebuilding EE-e'M-ml-Le
railroad from s aoshan to Ningpo, on the East China coast south of
Shanghai.
Reconstruction of the railroad would improve Communist capabilities
for a major operation in the Ningpo area, which is about 100 miles north
of the Tachens, since the Ningpo air base and nearby military installa-
tions would need large tonnages of fuel and other supplies under combat
conditions. Ningpo is the only active jet base in East China not
located on a railroad.
There would be little economic need for a rail line, as sea
transportation and the existing highway are adequate for the area's
normal requirements.
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14 January :1955
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Possible withdrawals of Chinese units: Several recent unconfirmed
reports have indicated the possibility of further withdrawals of Chinese
Communist ground forces from North Korea. A recent report has stated
also that North Korean troops have assumed responsibility for all sectors 25X1
of the front line.
Chinese forces remaining in North Korea are estimated at 560,000.
Replacement of Chinese with North Korean troops along the front would
be consistent with the current North Korean political offensive against
South Korea. Pyongyang has made major propaganda efforts to convince
South Koreans that peaceful unification can be achieved by negotiations
among Koreans themselves.
The North Korean Army has the capability of assuming responsibility
for the front lines, but reserve and coastal security positions would
presumably be bolstered by Chinese units. 25X1
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East Europe
Soviet troop rotation: Final tabulations on the 195+ exchange of
Soviet troops between East Germany and the USSR indicate that approx-
imately 195,000 troops, mostly recruits, entered East Germany between
late September and mid December 1954, while about 182,000 troops
eligible for discharge returned to the USSR. The difference between
the totals of arrivals and departures is accounted for by normal
attrition. The 195+ rotation program involved nearly half the
estimated 400,000 Soviet ground troops in East Germany, the largest
turnover of Soviet troops noted in any year since compilation of
detailed data on this subject was initiated in 1950. The unusually
large rotation figures result from the release this year of both the
1931 and 1932 classes, which were called up together in 1951.
In Austria, final figures on troop rotation indicate that, during
the autumn, approximately 9,700 Soviet troops arrived and 9,000 departed.
Unlike the figures for East Germany, these are comparable with those of
other recent years and represent a turnover of less than one third of
the Soviet Army troops in Austria.
East Germany
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Increased controls in Berlin: Since 10 December, Soviet Zone
authorities have instituted a number of control measures which are
gradually isolating East Berlin from the remainder of the city and are
restricting the movement of persons to and from the Soviet sector.
These actions may be preliminary measures to tighten the security of
the entire Soviet Zone in preparation for the introduction of con-
scription in East Germany.
West Berliners who either work in East Berlin or visit that sector
to shop at favorable rates of exchange are faced with a series of travel,
monetary, and purcha estrictions which will discourage further travel
to the East sector.
dismissal of the approximately 2Q,UVU es
working in East Berlin will start later this month.
Identification and goods controls on elevated and subway trains on
the sector borders, introduced during the pre-Christmas buying spree,
apparently are continuing. Additional personnel to carry out these
controls reportedly are being recruited by the East Berlin police to
work on a volunteer basis. Intersector travel restrictions not only
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will help to control the amount of goods purchased in East Berlin by
West Germans but also will facilitate prevention of the escape of
draft-age civilians wishing to avoid conscription into the East German
army.
Further security measures can be expected around Berlin and between
its East and West sectors. Their e.doption will probably be gradual,
however, in order not to create unrest or bring about an increase of
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Civil defense: I ILodz (southwest
of Warsaw,block committees have been conducting civii- defense and first-
aid courses since November 195+ for residents of that city. Old wartime
air raid bunkers are being restored and cleaned, and air raid sirens are
being repaired and tested. In the first week of December 1954, an air
raid drill was carried out in the large center section of Lodz.
Conduct of air raid drills on a city sector basis would indicate
that the Polish civil defense program has made considerable progress
during the past year. Previous reports have indicated that Poland,
generally considered as lagging behind Czechoslovakia, Hungary, and
Bulgaria, has accelerated development of its civil defense program
since 1953. Measures taken during 195+ included initiation of training
for air defense of industrial installations, overhauling of World War II
air raid shelters, construction of new shelter facilities, and strength-
ening and expansion of the fire fighting services.
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Hungary
Failure of the new course: An analysis by the US Legation in Budapest
of the Hungarian economic and political. situation indicates that the new
course, which has now been in existence for 18 months, has thus far failed
to effect more than a nominal increase in agricultural production or to
create a sound basis for long-range industrial advances. During this
period, the regime has not managed to overcome passive resistance or the
lack of enthusiastic support which is evident even among the Party member-
ship. It is, doubtful that the regime will be able to bring about any
significant improvement in the situation with the measures now being
applied or proposed or that the basic new course policies will be radically
altered in the foreseeable future.
Hungarian leaders not only admit that productivity has actually
declined and production costs risen since July 1953 but that 195+
improvements in the standard of living were gained only by the use of
economic reserves. A disappointing 1954 harvest, a shortfall of 500,000
tons in coal mined, a decline in foreign currency reserves, and the
depletion of raw material stocksrhaye contributed to Hungary's seriously
deteriorated economic position.
Yugoslavia 25X1
Relations with Orbit: In the past few weeks, diplomatic and economic
relations between the Soviet Bloc and Yugoslavia have continued steadily
to improve. This has not resulted, however, in any deterioration of
Yugoslav associations with the West. The Yugoslav position on this
question was reaffirmed by acting Foreign Minister Bebler's statement, in
the course of a year-end summation of foreign policy, that normalization
of relations with the Soviet Bloc "does not have nor could it have any
negative effects on relations between Yugoslavia and the Western
countries."
The USSR has not publicly pursued the party-rapprochement tactic which
was hinted at last November in the toast by Soviet leaders to "Comrade
Tito and the Communist Party of Yugoslavia." Vice President Kardelj
recently told however, that approaches by Soviet
officials have indicated a desire to restore Soviet-Yugoslav Party
relations. He added that, in personal diplomatic conversations, Soviet
leaders had even recognized the validity of some of the unique develop-
ments in Yugoslavia, admitting that the country was both Marxist and
Socialist despite contrary Soviet assertions made in the heat of the
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quarrel surrounding the break. Kardelj stated that Yugoslavia's policy
was carefully to encourage changes in the Soviet Bloc by a friendly but
critical and detached attitude and, at the same time, to intensify its
contacts with its friends, the democratic socialist parties in Europe
and Asia.
The most recent development in Belgrade's relations with the Orbit
was the Chinese-Yugoslav interchange in Moscow, resulting in the
announcement on 9 January that diplomatic relations would be established.
Although their early recognition of the Peiping regime in 1949 failed to
evoke any response, the Yugoslavs remained open to any move from Peiping
because of their belief that non-Orbit contacts could lessen Chinese
dependence on the USSR. It is possible that diplomatic relations with the
Viet Minh also will be established. Because of the sharp rebuff to their
recognition of the Viet Minh in 1950, the Yugoslavs would probably wait
for the Viet Minh to initiate such a move.
Soviet-Yugoslav trade talks were concluded with an announcement on
5 January of an official government-level agreement calling for
$10,000,000 of trade each way during 1955, which does not increase the
level of trade called for by the three-month agreement concluded on
1 October 1954. Yugoslavia is currently holding similar official talks
with Hungary, and negotiations are scheduled for the next two months
with Czechoslovakia, Poland, Rumania, and Bulgaria.
On 8 January the Yugoslav radio announced "prospects for the
reestablishment of air relations with certain Eastern European
countries." There is an unconfirmed report that Soviet and Polish
airlines will soon land in Belgrade and that the Yugoslav civil airline
will be permitted to land in Sofia, a stop which would facilitate its
Belgrade-Istanbul flight. The Yugoslavs reportedly have asked the Soviet
High Commissioner in Austria for landing rights in Vienna.
According to a Yugoslav official, the improvement in relations with
the Orbit will not involve forcible repatriation of Satellite refugees
in Yugoslavia. Refugees will be permitted to go to the West, remain in
Yugoslavia, or return to their homes. Satellite officials have not been
allowed to visit them in order to press them to return, although the
refugees are free to go to East European diplomatic offices in Yugoslavia.
Yugoslav-organized groups of Cominform refugees apparently are still in
existence, but an official source has stated that the emphasis in their
publications will shift from propaganda to culture in line with
"normalization" practice. On 29 becember Bebler stated that Belgrade
had been officially notified of the dissolution of anti-Tito emigre
groups and had been promised that all anti-Tito literature would be
removed from public institutions and bookshops in the Satellites.
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Propaganda allainst West German rearmament. During the past week,
Communist propaganda continued its hard line against West German re-
armament. It reasserted Soviet capability to retaliate in the event
of nuclear war. In dealing with Austria, it warned that West German
rearmament threatened not only Austrian independence but Austrian unity
as well. Lending support to this new line was the call for a Congress
for the Unity and Independence of Austria, to be convened in March. The
nuclear weapon subject is expected to crop up in slightly different con-
text at the conference of the World Peace Council opening in Brussels on
17 January.
In addition to the hard propaganda, the Soviet scare campaign has
also resulted in a series of reports threatening some sort of hostile
military action by the USSR if West German rearmament is sanctioned.
London agreements is accomplished.
The USSR is expected to
keep circulating such reports at leas un a. final ratification of the
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