THE ECONOMY OF NORTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001700050015-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 21
• Document Creation Date: December 20, 2016
• Document Release Date: March 10, 2006
• Sequence Number: 15
• Publication Date: February 1, 1973
• Content Type: IM

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Confidential
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
The Economy of North Vietnam
')9j?CfrrT.
~y nRD
C411
25X1
Confidential
ER IM 73-17
February 1973
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LE
I ntro(Iuction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
Po{)uLittoll and Labor Force . . . . . . . . . . . . . . . . . . . . . . . . . 3
Land and Resource Base . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Agriculture and Food Supply . . . . . . . . . . . . . . . . . . . . . . . 10
Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I I
Foreign Trade and Aid . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1. Population and Labor Force . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Merchant Marine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. Tonnages Handled by Main Ports . . . . . . . . . . . . . . . . . . . . . . . 8
4. Estimated Production of Food Crops . . . . . . . . . . . . . . . . . . . . 10
5. Estimated Output for Selected Branches of Industry . . . . . . . . . . . . . . 12
6. Seaborne Trade . . . . . . . . . . . 14
7. Direction of Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Figures
North Vietnam (frontispiece) . . . . . . . . . . . . . . . . . . . . . . . . ii
I. Estimated Population Growth . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Population Density . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Population Distribution, by Age and Sex . . . . . . . . . . . . . . . . . . . 4
4. Land Use, 1963 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Vegetation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
o. Selected Waterway Routes . . . . . . . . . . . . . . . . . . . . . . . . . 7
7. Petroleum Pipeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Value of Foreign Trade . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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Wen-Shan
(18(I\./ C u *A
Lao C
Tuyell
jQuang
;ao Bang
\`_ r
i~a ~ Mon ijl.n
Nguyen Ti..
Ke Yon
Thanh
Hoa/
A_ ~Hung
Xiangkhoang Hung
NT g Hai A I I.
NORTH VIETNAM
,aa
Nakhon
Phu Dion
Ch au
1
Rs Tinh
Dong Hoi
Doug Ha
i
Quan ,
Ti,
SOUTH
VIETNAM
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
February 1973
INTELLIGENCE MEMORANDUM
THE ECONOMY OF NORTH VIETNAM
INTRODUCTION
I. This memorandum is intended to serve as a ready reference for basic economic and
related information on North Vietnam. The need for such a compilation has been long
recognized by specialists on North Vietnam. Such a need may be even greater as Indochina
moves into the postwar era and reconstruction commences. Some of the data contained
herein are unclassified and are based on information released by the North Vietnamese press
and radio. However, much economic information that is routinely published by the
statistical bureaus of most countries of the world is held tightly by Hanoi.
2. With a per capita gross national product (GNP) of less than $100, North Vietnam is
still predominantly a backward agricultural country. Agriculture and related activities
employ about 7010 of the labor force and provide about one-half of the output of all goods
and services.' Rice is the dominant crop. Industrial production, which accounts for roughly
one-fifth of national output, is about evenly divided between modern and small-scale
sectors.
Note: This memorandum was prepared by the Office of Economic Research.
I. Communist accounting practices result in national output figures substantially different from those of the United
States. In particular, comparability is hampered by the inclusion of material production, but the omission of government
and most services.
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3. Since the advent of Communist ';ontrol in 1954, the regime has followed orthodox
Communist economic policies, employ) ag state ownership of productive facilities and
central planning to direct resources toward a program of planned development. In
agriculture, Hanoi followed the Chinese pattern of staged transformation from private
ownership to a Socialist system. By mid-1964, about 85% of the 2.9 million peasant
households were organized into nearly 30,000 agricultural cooperatives that farmed about
75% of the land. Since then, the number of agricultural cooperatives has been reduced to
about 22,300, comprising about 95% of the peasantry, by increasing the average size of
individual cooperatives. The government plans further consolidation of cooperatives in the
Red River Delta and highlands.
4. Hanoi appears to have received conflicting advice on development strategy from the
USSR and the People's Republic of China since 1959. The USSR recommended a program
that would maximize output of those products-minerals and tropical agricultural goods-in
which North Vietnam has a relative economic advantage. Other requirements were to be met
through external trade. The Chinese apparently disparaged the Soviet program as
"imperialist" and advocated a greater degree of self-reliance based on well-rounded
industrialization. Hanoi's first five-year plan in 1961 represented an attempt to incorporate
parts of both philosophies.
5. The North Vietnamese economy developed :airly rapidly in the decade following
the 1954 Geneva accords. Reconstruction of damage resulting from the French-Viet Minh
conflict was largely completed by the late 1950s. Construction of a number of modern
plants greatly increased industrial output. Agriculture made good progress until the start of
the 1960s, when stagnation began to set in because of poor weather conditions, managerial
shortcomings, and peasant disaffection.
6. Since 1965 the drain of war and the destruction from two bombing campaigns have
caused declines in output, and GNP remains below its earlier peak. Farm output suffered
from adverse weather in several years, manpower strains, and the war's competition for
scarce resources. A large part of modern industry was rendered inoperative either from
physical bomb damage or indirect effects, such as lack of raw materials, shortage of
electricity, or transportation bottlenecks. To a lesser degree, these same shortages hindered
production in both local and handicraft enterprises. Further disruption ensued from the
government's program to evacuate the urban population and to disperse small industrial
facilities to safe areas in the countryside. Production shortfalls across the board required
large increases in imports, especially of foodstuffs and fertilizer, and exports fell off sharply.
7. Reconstruction from the effects of the 1965-68 bombing was essentially completed
when Hanoi launched its military offensive in March 1972. There followed a renewed, even
more intensive, bombing campaign coupled with the mining of North Vietnam's main ports.
As a result, Hanoi is once again confronted with the need to rebuild its economy and move
on toward economic development, a plan already deferred seven years.
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C'ONI'II)FNTIAL
Population and Labor Force
8. North Vietnam's
population is slightly more than 20
million persons and has been
growing at about _"YY per year. This
ref it Lively low rate for it less
developed country is due to the
large numbers of men sent to South
Vietnam and to high wartime death
rates since 1965. Population
growth, births, and deaths for the
past decade are shown in the ac-
compallving chart, Figure I.
Estimated Population Growth
9. Overall population density
in North Vietnam is about 31-5 per-
sons per square mile, the highest
national fi;iure in Southeast Asia
0
END OF YEAR
POPULATION
IN MILLIONS
15.9
19.6
except for Singapore. The Red
1960 62 64 66 68 70 1960 65 70
River Delta, parts of which have a
(Tensity of' some 1,500 persons per
square mile, has the heaviest con-
centration of' population. The
narrow coastal strip extending to the southern border is aisu densely settled. Although the
ntcuuitaills and heavily forested northern interior regions comprise nearly two-thirds of' the
country, they contain barely 10'/% of the total population. Hanoi and Ilaiphong are the
principal urban centers, and no more than it dozen other cities have significant populations,
as shown on the neap, Figure 2.
1 0. As in other less developed countries in Asia, a large proportion of the population is
under 15 years of' age. Life expectancy at birth is about 47 years. The accompanying chart
compares the age-sex distribution of' 1960 with that of 1970 and shows the distortion
caused by the war in the prime age group, During this period the percentage of males aged
15-39 decreased from 42.6% to 36.31,"o, and t'emales of' the same age group decreased from
42.9'/ to 3().2'1"(,. All other age groups increased.
11. Manpower resources in North Vietnam have been subjected to unusual demands,
but the country has managed to maintain essential economic and defense functions. Since
1965, military inductions are estimated to have withdrawn more than I million men from
the civilian labor force, and the regime has had to mobilize the entire population in support
of the war effort. This has markedly changed the civilian employment pattern and increased
the workload of' women, particularly in rural areas. Relocations of' manpower resulted in a
decline in productivity and further aggravated a longstanding shortage of' skilled labor. An
estimated 10 million people. or almost 50% of' the total population, made up tiie active
civilian labor force at the end of' 197 I, as shown in Table 1.
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Land and Resource
Base
12. With a
total land area of
61,300 square miles,
North Vietnam is
somewhat smaller in
size than the .state
of Washington.
Two-thirds of the
country consists of
rugged, sparsely-
populated moun-
tains and hills cov-
ered with dense
evergreen forest in-
terspersed with fair-
ly extensive grassy
arras. Arabic land
comprises only
som, 14% or tile
total, as shown in
the chart, Figu-e 4.
13. Agriculture
is concentrated in
the one-third of the
country composed
of the Red River
FIgure 2
Population Density
Delta and the coastal plains. This
area contains about 90% of the
population and about 80% of the
cultivated land. The Delta is a flat
plain crisscrossed by rivers and
drainage and irrigation canals, inter-
woven into a vast mosaic of rice-
Persons tier square mile
0 2.6 26 130 520
[~T
6-- 1 10 50 700
Persons per square kilometer
Pooulation Distribution, by Age and Sex
AGE
05 and over
40-64
fields. Viet Tri, at the head of the 15-39
Delta, 100 miles inland, is only 4?
feet above sea level, and the average
slope of the Delta to the sea is less Less than 15
than 6 inches per mile. In this flat
environment, dikes are essential to
protect the land from flooding by
the rivers that cross it. Primary
40 30 20 10 0 10 20 30 40
PERCENT
MALE FEMALE
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Population and Labor Force
I January 1972
Million Persons
Total
20.1
Males
9.5
Females
10.6
Ages 15-64
11.1
Civilian labor
0.0
Students (over age 15)
0.2
Military service
0.6
Land Use, 1963
Medford
5150:11 12 72
---T-T
IIr Spokane.
r1Po,tlandi -'/
(likes protecting Ilanoi and areas upstream rise up to 50 feet above the adjacent land.
Secondary dike systems rising up to 40 feet are designed to contain floods if the primary
dikes are breached. Poor drainage in the Delta, combined with a monsoon climate, produces
some degree of flooding each summer. When monsoon rains are unusually heavy and
typhoons severe, destructive flooding can occur. Floods that struck in 1971 were the worst
of this century and at one point inundated more than one-half of the Delta. (For principal
vegetation types, see Figure 5.)
14. Coal is the major mineral resource and traditionally the largest single earner of
foreign exchange. Pro-,en coal reserves are about 500 million tons,2 most of which lie in the
I-fon Gay-Cam Pha coalfields. Estimates of' total possible reserves run as high as 5 billion
tons. More than 95% of coal output is anthracite, however, and North Vietnam must import
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Figure 5
Vegetation
1 Forest I j Cultivated land
Grassland Manitroae
most bituminous
coking coal from
China. In addition to
coal, North Vietnam
has such other min-
eral resources as iron
ore deposits near
Thai Nguyen with re-
serves-nearly all
high-grade ore-
mono Col -estimated at about
150 million tons;
apatite deposits in
the Lao Cai area, and
several scattered de-
posits of phosphorite
for fertilizer produc-
tion and of lime-
stone and clay for ce-
nlent production.
There are also
smaller deposits of
chromite, tin, zinc,
and tungsten, but of
these only the Thanh
Hoa chromite and
Cao Bang tin de-
posits are actively
alined. Nortl Viet-
nam has no proven
reserves of petrolem,
although exploration
with Soviet and Romanian assistance has been under way for several years, mainly in Thai
Binh Province. Despite abundant forest resources, extraction of timber is poorly developed,
and annual imports are necessary to cover domestic needs.
Transportation
1 S. Transportation facilities in North Vietnam- poorly developed by Western
standards are adequate to support the limited demands of the economy. Hanoi is the focal
point for all types of transport. Maritime commerce is centered at the port of Haiphong.
Railroads are the primary long-distance land carrier of passengers and freight, both
domestically and internationally. Highways serve mainly as short-haul feeders to the railroads
and to water transport and provide access to remote regions (see the frontispiece). Inland
waterways. which carry primarily bulk cargoes, are the chief means of transport in the Red
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River Delta, as shown on the map,
and, on a tonnage basis, carry more
cargo than any other mode. The
country's small merchant marine is
engaged primarily in coastal trade
but only nominally in international
shipping. The relative importance of'
various modes of' transport is shown
below in cargo movements for
1966, the latest year for which sta-
tistics are available:
16. Transportation links most
parts of the country but is relatively
limited in extent. The railroad sys-
tem totals more than 600 miles, in-
cluding about 25 miles of standard-
gauge (4 feet 8-1/2 inches), 440
miles of meter-gauge (3 feet 3-3/8
inches), and 140 miles of dual gauge
(standard meter gauge) lines which
use three rails. All are single track
and none is electrified. The highway
network consists of' about 8,400
miles of motorable roads, plus
about 2,100 miles of seasonally
motorable roads. Some 800 tc 900
miles of roads have bituminous-treated
Selected Waterway Routes
uyen Quang `
TIi:'.ILAND
,- ",,-HANOL
/'- -41~\ r
Thanh
/
hrhdrn tHo ~S) (il I
I. .~ T(7;V'KI\
f3
Hoa1`
DEMARCATION LINE
surfaces, and the
crushed-stone, gravel, or earth surfaces. North Vietnam's
remaining motorable roads have
merchant marine consists of six
dry cargo ships and five tankers, most of which were built in the period of 1956-66, as
shown in Table 2.
1 7. North Vietnam's most important international connections are by sea, through the
main port of Haiphong. Seaborne shipping in 1971 accounted for roughly 90% of total
imports. Oceangoing vessels could call at two secondary ports-Hon Gay and Cam Pha-both
of which have engaged almost exclusively in handling coal for export. Port capacities are
suggested by tonnages of imports and exports for 1970 and 1971, as shown in Table 3.
Ships must lighter at the port of Vinh, as there are no docking facilities for oceangoing
vessels. There are two important rail connections with China: one at Dong Dang in the
northeast and another at Lao Cai in the northwest. Some dozen highways also cross the
'- IVpang Khe
\Hoi ,VETNAM
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Cross
Location
Register
Deadweight
Speed
and Date
Call
Name
Tvpe
Tons
Torts
Engine Tvpe
(Knots)
of Building
Sign
Ben Thuy
Dry cargo
1,662
2,520
Diesel
11.2
Japan, 1958
82VN
Coo Lang
Tanker
1,769
1,620
Diesel
14.0
USSR, 1966
N.A.
N
Ilai Phong
Tanker
304
300
Diesel
10.0
East Germany, 1962
.A.
VN
Iloa Binh
Dry cargo
610
908
Diesel
10.2
Poland, 1956
84
N
Iloang Pho
Tanker
3,327
2,300
Diesel
10.0
United States, 1943
.A.
VN
lluu Nghi
Dry cargo
610
908
Diesel
10.2
Poland, 1956
81
VN
Thong Nhai
Dry cargo
617
840
Diesel
10.0
East Germany, 1960
86
N
Train Giang
Tanker
3,327
2,300
Diesel
10.0
United States, 1943
.A.
N
20 Thong 7
Dry cargo
1,300
1,700
Diesel
N.A.
North Vietnam, 1966
7
.A.
9VN
Viet Bao
Dry cargo
2,747
3,952
Turbine/oil
12.3
East Germany, 195
9
8
N
A
Viet Trung
Tanker
250
300
Diesel
10.0
China, 195
.
.
Table 3
Tonnages Handled By Main Ports
Thousand Metric Tons
Seaborne
Trade
Imports
Exports
1971
2,924
2,232
692
Haiphong
2,287
2,086
201
Cam Pha
424
6
418
Hon Gay
78
15
63
Vinh
135
125
10
1970
2,468
1,888
580
Haiphong
2,052
1,839
213
Cam Pha
306
306
lion Gay
83
22
61
Vinh
27
27
Negt.
border with China. In the south, a former rail connection across the demilitarized zone
(DMZ)into South Vietnam has been out of service since the early 1960s, when about 100
miles of rails were removed. However, there are several road connections built through the
DMZ for military resupply purposes.
18. North Vietnam's transportation system has borne the brunt of air strikes. Damage
to bridges and rail yards forced widespread use of trucks for shuttling around interdicted
points, and the North Vietnamese developed considerable redundancy in road networks and
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river crossings, expecially in the country's southern reaches. Recent mining of the ports
caused a shift from predominantly seaborne shipment of imports to overland transport out
of staging bases in China. A petroleum pipeline, built initially to serve military forces in
Laos, was extended northward to the Chinese border. Since the partial bombing halt in
October 1972, the North Vietnamese have largely restored the railroad system north of 20?
north latitude. (The petroleum pipeline network is shown on the neap, Figure 7.)
Petroleum Pipeline Figure 7
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Agriculture and Food Supply
19. Agriculture, the mainstay of North Vietnam's economy, is based primarily on rice
cultivation. About 70`/o of'cultivated acreage is in rice, 20%/o in secondary crops (mostly corn,
sweet potatoes, and manioc), and I0% in industrial and miscellaneous crops (such as cotton,
tobacco, sugar, and oilseeds). The spring harvest, which is heavily dependent on irrigation,
accounts for about one-third of the yearly rice crop and for practically all other crops. The
larger rice crop is harvested in the autumn. Fishing, the major source of' the small amount of
a.-,;purl protein in the Vietnamese diet, is done by peasants in the numerous lakes and
streams and by commercial fishermen in coastal waters. The annual catch is probably some
200,000 tons. Over the longer term, the regime looks to the agricultural sector not only for
self'-sufficiency in food but also as a source of' labor and capital for furthering North
Vietnam's industrialization. At present, agriculture is capable of' providing only 85c/-90%/% of'
esse iIial food requirements.
20. Good production increased during the first few years of Communist rule to it peak
of some 3.9 million tons in 1959.3 During much of' the 1960s, however, production
declined (see Table 4). Weather conditions during seven out of the last tell years was
Table 4
Estimated Production of Food Crops
Million Metric Tons
1959
Total
3.9
Ric-ell
3.5
Secondary
Cropsb
0.4
1960
3.2
2.8
0.4
1961
3.7
3.1
0.6
Iclb2
..
3.6
3.0
0.6
1963
3.5
2.9
0.6
1964
3.7
3.0
0.7
1965
3.8
3.1
0.7
1966
3.5
2.8
0.7
1967
3.6
2.9
0.8
1968
3.3
2.6
0.7
1969
3.4
2.7
0.7
1970
3.6
3.0
0.6
1971
3.0-3.1
2.4-2.5
0.6
..
1972
3.6
3.0
0.6
a. Milled or polished rice.
b. Corn, sweet potatoes, and manioc expressed in milled rice equiva-
lents.
3. Measured in terms of milled rice and secondary crops expressed in milled rice equivalents.
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average to pool'. III addition, managerial Shortcomings and peasant disaffection with the
c(OI)eralive systell) contributed to the deClllle ill ()utput. Dllrillg 1967-71, annual imports
ranging between 400,000 and &)0,000 tons of rice, wheat flour, and corn almost entirely
trump China and the USSR were needed to maintain the average monthly foodgrain ration
of? 13 14 kilograms per person. By 1969, rice 1)rOduction had begun to recover with the
int?oduclion of Iligh-yield rice varieties, which accounted for nearly two-thirds of the spring
rice crop and 10"(-15'/"( of the antullln crop) ill 1971 and I9; 2. Agricultural production was
dealt a severe setback ill 1971 by late-sunlnler floods that uestroyetl 35;(-451X, of' the
autumn rice crop. Lingering flood damage also probably had a deleterious effect on 1972
production.
_' 1. The war's competition for resources has limited opportunities for increased
nlechani/ation, fertilizer usage, and irrigation projects. The withdrawal of' Alen for military
service and support activities has led to a shortage of' trained cadre and a shift from male to
I'enlalc and child fa1111 Ii t or. Moreover, the war has forced concentration on the production
ol? food crops on existing farmland at the expense :)f industrial and export crops, fishing,
and opening ol? new lands.
22. North Vietnam has been relatively less successful promoting food
self-sulTiciency than South Vietnam. Historically, North Vietnam's grew^r population
pressures, severe constraints on both the quantity and quality of cultivable land, and limited
annount of, agricultural investnlellt have given South Vietnanl a comparative advantage in the
production of rice, the major foodstuff. Not only has South Vietnam been able to increase
total rice production by developing new lands--as the security situation permits--but has
also increased farm productivity more rapidly than the North. Rice yields in both countries
hel'ore the war were about 2 tons per hectare. Since then, the successful application of'
high-yield rice varieties and the development of a program of mechanization, irrigation,
fertilization, and weed and pest control needed to inaxinlize the output of the newer rice
strain have pushed average yields in South Vietnam to almost 2.5 tons per hectare. In the
North, on the other hand, the physical and institutional factors limiting output have been
compounded by the degrading effects of' years of war and have effectively halted
agricultural developillent. Despite the recent introduction of llig!,-yield varieties in North
Vietnanl average yields have stagnated in the range of' I.8-2.0 tons per hectare.
Industry
23. North Vietnam's industry consists of' some large modern plants that are managed
by the state and of, small factories and handicraft enterprises that are largely managed
locally with assistance and direction from state planners. Mining enterprises and the large
electric power, metal, machinery, and textile plants are centrally run. Most finished
consumer goods are locally produced. 1-landicraft workshops form an important part of
local industry, typically producing textile products, metal products, or light consumer
goods. Modern and local industrial output were about equal in overall value of production
be fore US bombing greatly reduced output in the largest plants. Industrial employment is
near!-, ! million, of' which more than 600,000 are employed in local industry and
handicrafts.
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24. the prospect of rapid industrial growth from increased investment in the early
I96Us ha, been only partly realiied. According to official data, the gross value of industrial
production increased about 7U' froth 196( to 1964, or an average annual increase of 14'7.
Further growth was in the offing as a substantial portion ol? industrial capacity had yet to he
fully assimilated into the economy. In 1965, industrial output reached a peak, although the
rate of increase dropped sharply to an estimated 1'7 or 2'/ probably the result ol? the US
botching program which began that year. Output then began a decline to a low in 1967
estimated at about two-thirds the 1905 level. Slow recovery began in 1968. following the
partial bombing halt in March and the termination of bombing in November. By 1971. total
industrial output had recovered :ssentially to the 1965 peak.
25. Bombing during 1965-68 and again in 1972 was targeted against the modern
industrial sector, including particularly the electric power industry. The 1965-68 damage
had been largely repaired by late 197 I. The impact of I)omhing in 1972 has again caused a
sharp decline in industrial output. Recovery to pre-hombing levels of' production will take
several \ears, as was the case in the post-1968 bombing era. Table 5 presents estimated
output front aI few selected branches from 1965 to 1971.
Estimated Output for Selected Branches of industry
/965 /966 /907 /96' /969 19,110 1971
;tfilliou kilowatt hours
I' luctiutt 570 5 20 300 350 450 510 560
nu
Sri ciceable
;encrat ing
70 70 40 55 65 70 90
capacity
Coal 4,000 3.600 1.500 2.800 2.800 2,Q00 3,600
Cement 660 665 200 120 200 3250 50 400
Agatit c 853 350 200 250 'S0
('Inunille ore 12 Net',:. Negl. 5 3 - 2
Iron Ore 400 300 80 30 30 100 150
15 50 75
Pig iron 200 ISO 40 15
Percentage of pre-bo iibing capacity wrviccablc at year's end.
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CGONN )F,N~i
26. North Vietnam's modern industry prior to the renewal of' bombing in 1972
included:
(1) electric generating capacity of some 300,000 kilowatts (40,000
kilowatts not restored), with about a dozen powerplants in the
Ilanoi-Iaiphong network making up the only integrated segment;
(2) one cement plant at Haiphong with an annual capacity of 630,000
tons and several minor additional plants;
(3) one superphosphate plant at Phu Tho rated at 120,000 tons per
year plus three small plants producing about 50,000 tons of molten
phosphorus fertilizer;
(4) two textile mills, one in Nam Dinh and one in Hanoi, capable of'
producing 100 million linear meters of cotton textiles;
(5) coal mining, with a recorded annual output of 4 million tons of
anthracite coal in 1965;
(6) one chemical plant at Viet Tri producing small amounts of chlorine,
caustic soda, insecticides, and polyvinyl chloride;
(7) three significant machine ,wilding plants that produce obsolete
lathes, drill presses, small diesel engines, and simple agricultural machinery;
and
(8) a group of' electrical equipment plants capable of producing
insulators, switch gear, and small electric motors and transformers.
The partially completed steel complex at Thai Nguyen, with a planned output of' 300,000
tons of pig iron and 51)0,000 tons of crude steel, has been limited to pig iron production. A
fertilizer plant at Bac Giang designed to produce about 200,000 tons of ammonium nitrate,
using coal as a charge stock, has not yet been completed because of the war.
Foreign Trade and Aid
27. North Vietnam has incurred continuous trade deficits that, since 1954, have been
financed almost entirely by massive grants and credits from Communist countries. The
deterioration in export capability following the start of' US bombing in 1965, accompanied
by increased reliance on imports from Communist allies, sent the annual deficit from the
1961-64 average of' $70 million to a peak of about $680 million in 1969. More recently, the
deficit has been somewhat less than $600 million, as indicated in the accompanying chart,
Figure 8.
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CONFIDENTIAL
Value of Foreign Trade
28. Shortfalls in domestic
production and the denlan(ts of
reconstruction have kCl-)t tile
volume of imports at close to 2
111111ion tolls annually since
1968. North Vietnam depends
on imports for all its supplies of
petroleum, finished st'.el, rail-
road rolling stock, and vehicles
and for most of' its complex ma-
chinery, metal manufactures,
spare parts, industrial chemicals.
and raw cotton. In addition,
North Vietnam has had to im-
port substantial quantities of
food over the past five years (see
Table 6 for seaborne trade).
29. The war has seriously
degraded North Vietnam's ex-
port capability-now slightly
more than one-third of the level
reached in 1965. More than
one-half of North Vietnam's ex-
ports, by value, are agricultural
1965
1966
1967
1968
1969
1970
1971
Imports
845
1,030
1,415
1,970
1,890
1,885
2,230
FoodstHITS
I20
80
460
800
755
660
615
Fertilizer
160
225
150
155
155
200
330
Petroleum
170
200
245
390
375
360
390
Timber
15
15
15
25
35
15
5
General and
miscellaneous
380
510
545
o00
570
650
890
Exports
1,720
1,170
570
695
575
580
690
Apatite
320
10
0
0
15
95
35
Cement
80
100
35
0
25
15
15
Coal
1,150
940
430
630 '
460
370
485
Pig iron
50
40
20
0
0
0
0
General and
miscellaneous
120
80
85
65
75
100
155
a. Data have been rounded to the nearest five thousand tons.
14
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Products, handicrafts, and light manufactures (clothing and footwear). The remainder is
al;lde up principally of minerals, metals, and building materials. Pig iron exports. l'ormerl"
atl illlportau t hard urre icy earner, have not been resumed since 1907, when the country's
I)tlly significant iron smelter was bombed. In 1969, apatite exports were resumed after a two
Yt.ar halt and cement exports after a one-year lapse, but both were in modest volume.
Although coal exports were never completely halted by the 1965-68 bombing. they had
IaIleil to one-third of the 1965 level by 1970 and have been completely cut off since the
alining of North Vietnam's ports in May 1972.
30. The ('ommunist countries are North Vietnam's major trading partners, accounting
I?(-)r more than 95(/r, of' North Vietnam's total trade in 1971, compared with roughly 85'/.%
dilrillg, I961-64. 01' total trade with the Communist countries, the USSIZ accounted for
more than one-hall', the East European Communist countries nearly one-third, and China
chic-sixth (see 'fable 7). Japan has been North Vietnam's largest non-Communist trading
I'~trhler during '.965-71, taking up one-half of' 1-Ianoi's non-Communist trade. North
Vlctllarll traditionally Illallltallls a favorable balance of' trade with Iloll- ('0111111U-list
ic)ilntries, although it may run it small deficit with individual couultries.
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Imports
From
Exports
To
Imports
From
Exports
To
Imports
From
Exports
To
Imports
From
Exports
To
Imports
Rom
Exports
To
Imports
From
Exports
To
Imports
Fran
Exports
To
Total
230
105
370
85
525
55
670
60
735
55
665
60
655
70
Communist countries
215
80
355
65
520
45
665
50
725
40
655
45
650
50
l1SSRb
125
30
185
25
255
20
325
20
400
IS
360
15
340
25
China
55
20
90
20
130
10
135
15
100
10
75
15
110
10
Eastern Europe
and other`
35
21
80
20
135
15
205
15
225
15
220
15
200
15
Non-Communist countries
15
25
15
20
5
10
5
10
5
15
10
15
5
20
Of which:
10
Japan
4
11
6
10
2
7
2
6
7
6
5
6
4
II
France
2
3
2
3
I
I
1
Negl.
I
Negl.
I
I
Ncgl.
I
Singapore
3
2
2
2
I
I
I
1
I
3
1
3
1
3
Ilung Kong
Negl.
3
Negl.
3
Negl.
I
Negl.
I
Negl.
2
I
3
Negl.
5
a. Figures for Communist countries and area totals for non-Communist countries are rounded to the nearest $5 million; figures for individual non-Communist countries are n unded to the nearest
$1 million.
h. Imports include estimated grant aid deliveries not published in Soviet trade statistics.
c. Eastern Europe includes Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, and Romania. Imports include estimated grant aid deliveries not publisher. in East European trade statistics.
Other Communist countries include Albania, Cuba, Mongolia, and North Korea. North Vietnam does not trade with Yugoslavia.
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