FAR EAST/PACIFIC DIVISION OFFICE OF REPORTS AND ESTIMATES CENTRAL INGELLIGENCE AGENCY WORKING PAPER WEEKLY INTELLIGENCE HIGHLIGHTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000500040011-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 21, 2016
• Document Release Date: February 27, 2008
• Sequence Number: 11
• Publication Date: April 25, 1950
• Content Type: PERRPT

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'qw
CoPY No. Lg?
FAR EAST/PACIFIC DIVISION
OFFICE OF REPORTS AND ESTIMATES
CENTRAL INTELLIGENCE AGENCY
.uORKI1 PAPER
WEEKLY INTELLIGENCE RIGfLIGHTS
DATE: APR 2 5 1950
DO'YUM NT NO.
NOC+ANGEiNC.A 3. :i
I 1 DECLA`_? iii 1 rO
CL.A35. CHAN GEO TO: TS
NEXT RC.'x'1 ',"1 CDF='i F- -
AUTH:
NOTICE: This document is a working paper, not an official
CIA document. It has been coordinated within ORE,
but not with the IAC agencies. It represents cur-
rent thinking by specialists in CIA, and is designed
for use by others engaged in similar or overlapping
studies. The opinions expressed herein may be re-
vised before final and official publication. It is
intended solely for the information of the addressee
and not for further dissemination.
DIA review(s) completed.
State Dept. review completed
T'A
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Sa E C R E T `1
OFFICE OF REPORTS AND ESTIMATES, CIA
FAI EAST/PACIFIC DIVISION
INTELLIGENCE HIGHLIGIUS NO. 97
19 APRIL to 25 APRIL 1950
SECTION I, SUVIZARY OF F.U't EA.3T TRENDS ATaD DEVEL0Plufkfil1!'4S
Further intra-Party bickering among the Japanese Communists may
well be delayed until after the coming elections, in order to present
a "united front" to the increasingly unfriendly public (pt, 2);,
Although the Peiping regime is evidencty losing popular support
as a result of China's economic distress, the Communists' program of
social change and growing suspicions regarding Soviet encroachment, the
likelihood of an overthrow of the Chinese Communists is remote (p, 2):
Meanwhile, the collapse of Nationalist resistance on Hainan is indica-
tive of the continuing weaknesses of that moribi nd regime (p0 5) u.
A comparison of the efficiency of Vietnamese troops with sand with-
out French cadres is expected to strengthen the .8ao Dal regime's pleas
for direct U.S military assistance (p., 5),,
hE~~~I~OTfsS
New conservative coalition in Japan..,.,Korea out in front,,.:F-
railroads running rough...Victory Bond drive lags : G r Indonesian rubber
hoarding,, ,? , "Unitary State" trend continues. a .Contract labor for
Paoific..
(NOTE: Section III contains a summary of recent Embassy
and Attache reports on the Burmese iaUitary situa-
tion,)
The marginal notations used in succeed.tnr; sections of this YIe cl,y
("A", "Br', or "0") indicate the importance of the items in D/f,.- opinion
with "AE' representing the most important.,
CONFIMMMIAXWOM
4=- Emma%
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S F. C R F. T
SECTION II. DEVELOPMENTS IN SPECIFIED AREAS
JAPAN
NOZ,IKA friction continues-The official Japan Communist Party nevis-
paper, AKAHATA, has published an attack by the chairman of the
Party's disciplinary body, criticizing the "separatist"f activities
of "Trotskyist" Party elements who are trying to overthrow both
TOKUDA Kyuichi, the Secretary General, and NOZAKA Sanzo, leading
Party theoretician. This "Trotskyist" group has apparently rallied
around two Central Committeemen, SHIGA Yoshio and MIYAMOTO Kenji.
SHIGa, sometimes considered number three in the Party, was a pre-
Occupation cellmate to TOKUDA; he has been editor of AKAHATA and a
member of the Japan Politburo. Like NAKANISHI Ko, SHIGA is said to
have been critical of "bureaucratic tendencies" in the Japan Commu-
nist Party and to have complained over the Party's failure to imple-
ment the Cominform instructions contained in last autumn's f"NOZAKA
Criticism."
This continuation of the NOZAKA squabble is one of three topics
to be discussed at the General Session of the JCP Central Committee,
presently scheduled for 28 April. Whether the debate results in ex-
pulsion of SHIGA and MIYAMOTO, or in their abject apology, publicity
about such Party splits cannot fail both to damage Party morale and
prestige and to injure JCP chances in the 4 June Diet Upper House
elections. Under these circumstances, the Party may well decide to
postpone the coming Central Committee meeting, in order to present a
"united front" during the election period.
CHINA
Communist ponularitr declines--The prestige of the Chinese Communists
at home has been in an apparent process of decline over the past
several months. Except in certain sections of the old "Liberated
Areas," public enthusiasm for the Communists in the past was limited
for the most part to intellectuals and politically-conscious ;youth,
whose disgust with the Kuomintang rendered them highly susceptible
to Communist promises of reform, while the overwhelming majority of
the Chinese people viewed the Communist conquerors with passive
curiosity, prepared to judge their new rulers on the basis of perfor-
mance. The prevailing attitude was one of relief that the fighting
was over, combined with a conviction that no change could be for the
worse. In recent weeks, however, the enthusiasm of the few has begun
to wane and the apathy of the many has turned to disappointment, re-
sentment, and, in some, instances, to open hostility,
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The principal causes for dissatisfaction are: (1) economic hard-
ship, (2) the imposition of obnoxious social controls, and (3) the
apparent subservience of the Communist regime to the USSR. Thusfar,
Communist performance in these spheres of governmental responsibility
and public policy appears to be giving most Chinese reason to doubt
that the new regime can offer any more than did the old toward a solu-
tion of their problems and the fulfillment of their national and per-
sonal aspirations.
Although largely the result of factors beyond Chinese Communist
control, China's serious economic plight has been the Both major the ccontribu-
ting cause to the new regime's delining prestige.
the curtailment of foreign trade (the latter owing in large part to the
Nationalist port closure) have combined to bring about the worst econo-
mic conditions in years. The Corranunists' ambitious political tasks
have been enormously complicated by economic stagnation and want, and
by the fact that the regime has sought to make ends meet through the
extortionate seizure of all available surpluses of agricultural pro-
duce and money. The political gains inherent in the land reform pro-
gram have been nullified in many districts by the food shortage, by
high taxes, and by the tactical errors of inexperienced Communist
cadres. In the rural areas, excessive grain requisitions have excited
peasant hostility toward the new authorities. Spontaneous demonstra-
tions against the Communists and the murder of tax collectors and
aisle have been frequently reported. The extent to which rising peasant
discontent is being exploited by secret societies, bandit gangs, and
political guerrillas is not clear but there are indications that the
activities of such groups may be passing beyond the nuisance stages
In the cities, industrial unemployment, the coercive Victory Bond cam-
paign, and the policy of forcing business enterprise to continue unpro-
fitable operations, have aroused general resentment. while it is true
that the regime has made a creditable showing in several areas of econo-
mic activity,, most notably railroad rehabilitation, ation, the hgenal
Chinese has had the net effect of shaking pu
Communists.
Although the authoritarian tradition is deeply rooted in Chinese
civilization, popular reaction to Communist social controls has thus-
far been mixed. In general, the people have tended to accept the appa-
ratus of political dictatorship (secret police, controlled press and
the like), but to resent the comprehensive Communist program of indoc--
trination and organization as an irritating invasion of their leisure
and privacy. In the cities, large numbers of people are finding their
time and energies inordinately absorbed by the activities of Communist-
controlled appears be~l?a~~rueiin which more compulsory.
while pPears
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more homogeneity in the social structure, in many of the "newly liber-
ated" rural sections, the brutality of Communist cadres has alienated
those very elements of the population whose sympathy and support are
most necessary to the Communist program.
Thusfar, the Communists have moved rather slowly in interfering
with social custo:ns and practices, but the recent promulgation of a
comprehensive law governing marriage and divorce suggests that this
aspect of the regime's program may be accelerating. Communist policies
in the fields of education, religion, propaganda, art, culture and the
like, do not seem to have yet evoked any significantly unfavorable re-
sponse among the small minority whose daily lives are most affected.
In the final analysis, the effect of Chinese Communist political
and social controls must be viewed against the traditional Chinese
tendency to regard government as a necessary evil. Up to now, having
failed to improve the material condition of the people, the now regime
has acquired little or no sanction in the popular mind for its demands
on the people.
The Communists' prestige has suffered in some degree from popular
suspicion that the interests of China are being serif iced to those of
the Soviet Union. The Chinese response to the new Sino-Soviet treaty
appears to have been unenthusiastic and
a widespread suspicion that the treaty con-
tains damaging secret proviniona.j
~To most of the Chinese people, how-
ever, the issue of Sino-Soviet relations is remote and impersonal, and
is not a principal criterion on which the Communist regime is being, or
will be, judged; It is among the intelligentsia, sensitive on the
questions of national sovereignty and independence, that the prestige
of the Communists is being damaged by current suspicions. The terms of
the Sino-Soviet treaty indicate that both the USSR and the Chinese
Communists are aware of popular antagonism to the Sino-Soviet alliance.
However, the present Soviet position in China Is so strong and obvious
that the Chinese Communists are kept constantly on the defensive in
attempting to justify the situation.
As to the effect of this increasing public dissatisfaction on the
Communists' ability to retain and consolidate their power in China, it
is evident that Communist administration and control are being aggra-
vated by growing popular op,vsition; The Communist cannot - and know
they cannot -- successfully organize China if a state of open hostility
is permitted to develop between the masses of the people and the Party
and its governmental structure. Deep Communist concern over the s itua-
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tion can be inferred both from doctrinal emphasis on the importance
of developing sympathetic public attitudes and from statements in the
current Communist press. Observers of the Chinese scene, are virtually
unanimous, however, in the view that there is no prospect of unseating
the Communist regime in the foreseeable future as a result of popular
disaffection.
Collapse on Hainan--The Nationalist collapse on Hainan is expected to "All
have the most adverse effects on the morale of the military and civi-
lian remnants of the National Government in Taiwan.
There are tvo "explanations" for-the Nationalist failure to defend
half their remaining territory: (1) CHiIANG may have sacrificed Hainan
intentionally, with or without the knowledge and consent of CH'N Chi tang,
in order to out Nationalist defense coots and to dispose of the remnants
of the Kuangsi clique, or (2) CHEN Chic-tang and other commanders on the
island may have decided to throw in the towel, in view of the Taiwan
regime's refusal of added assistance, In any case, the collapse of
Nationalist resistance carves to underscore the problems of command dis-
unity, faulty coordination and, most important, lack of "will to fight"
which continue to plague the moribund CHIANG regime.
INDOCHINA
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At present, Bao Dai's "own" armed forces remain, with a fee exr-
ceptions, entirely under French control. The 24,000 troops of the
Vietnamese regular army are cadred by 3,250 French officers and NCOs,
and are under the control of the Commander of French Forces in the
Far East. Vietnamese troops in the 22 Indochinese battalions of the
French regular army are not considered a part of Baa Dai's forces,
Only one high-level conference of Franco-Viet officials to con-
sider the development of a distinct Vietnamese army has been held
during 1950. French authorities have retained control of Inch chineso
pursestrings, and funds for the Vietnamese army are still allocated
either directly or indirectly by the French. All of the Vietnamese
army's military equipment, furthermore, is loaned by the French.
It cannot be assumed that the vigor with which autonomous Bao
Dai forces are reportedly fighting will continue unless a gradual
relaxation of French control keeps abreast of Vietnamese willingness
and ability to assume responsibility. The contention that progress
of Vietnam toward full independence must not be so rapid as to cause
the French soldier to feel that he is fighting not for France but
for Vietnam is hardly more valid than the contention that progress
must not be so slow as to convince the Vietnamese soldier that he is
fighting not for Vietnam but for France.
NEwSNOTES
A new conservative tart has been formed in Japan as a result of
the long-discussed merger of the People's Cooperative Party, the Now
Political Council and the Democratic Party. The new group's name,
apparently the most important issue connected with the merger, ten-
tatively is to be the People's Democratic Party. The coalition holds
67 coats in the Diet Lower House and 46 in the Upper House, and thus
ranks second to the majority Liberal Party, with 287 seats in the
Diet Lower House.
Korean national pride received a potent boost last week, when
a three-man team from the young Republic finished 1-2-3 in the fifty-
fourth annual running of the classic Patriot's Day marathon at Boston.
Three days later, in an atmosphere of triumph, the Korean National
Assembly finally managed to pass a. balanced budget for FY 195Os
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Communist cutbacks in personnel ordered in Central and Southwest
China, may bring a 50% reduction. A Wuhan broadcast has called for
the retrenchment of '"personnel, horses, and vehicles", to be completed
by the end of April, while Chungking has announced that military per-
sonnel of the Southwest Military Area will be reduced to,half their
present strength. vVhile these actions are in accord with the Commu-
nist regime's current drive to reduce government expenditures, a large
reduction in military personnel and administrative cadres in these still
unstable regions is surprising. The program may be inspired by Commu-
nist desires to purge undesirable elements that have attached themselves
to the Party organization in newly "liberated" areas.
Chinese railroad operations are unsafe and substandard, to judge
from reports of 20 collisions and 95 derailments in the period 1 Janu-
ary to 15 February 1950. One head-on collision caused 62 deaths.
These accidents are expected to continue to hamper Communist efforts
to increase rail traffic, since it will take several years to provide
modern switching and signalling systems and to restore the tracks and
brdiges to adequate standards of safety.
The sale of Chinese bonds is lagging, despite Communist press and
radio professions of enthusiastic public response to the People's
Victory Bond drive. Although the drive was scheduled to end Mar ch 31,
the deadline has been extended and the Communists have not yet re-
vealed the total of subscriptions or the proportion of pledges that
remain unpaid. Purchaser resistance thusfar indicates that the Commu-
nist goal of 2D0 million Victory Bond units in 1950 will not be reached.
The hoarding of Indonesian rubber is presently being explained in
USI circles as a result of local Chinese merchants' expectations that
Malayan shipments will be reduced by an accelerated bandit campaign,
with a resulting rise in world prices. Actually, it appears more
probable that last month's revision of Indonesian exchange rates has
not yet been effective in achieving one primary purpose, i.e., the
restoration of confidence in USI currency.
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Only three of the original 16 states and areas of the USI, as
established in December 1949, still remain: the Republic of Indonesia,
Fast Indonesia and East Sumatra. East Sumatra will probably be an-
nexed to the Republic in the near future, as have the missing 13. The
structure of Indonesia will undergo its final reshaping when the esta-
blishment of a unitary state is discussed at the coming conference of
representatives of the USI and its two remaining component states.
The French in New Caledonia want to recruit at least 4,000 more
Javanese contract laborers for mining, agricultural and domestic ser-
vice. New Caledonia has more than 5,000 Javanese laborers at present.
An Indonesian commission, presently in Noumea to investigate working
conditions and advise the USI whether to permit the emigration, also
intends to visit the New Hebrides, where some 2,000 laborers could be
accommodated.
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SBCTION'III, BURMA - MILITARY REVIEi
Following a recent tour of Army field units as a guest of the
Commander-in-Chief, Bo No 'Yin, the US Military Attache in Rangoon
submitted a somewhat encouraging report on the Burmese Amy's opera-
tional effectiveness. He stated: (1) that the condition of the Bur-
mese Army is not "nearly so hopeless" as previous reports have indi-
cated; (2) that recent military successes have done much to raise
the morale of the troops; and (3) that the officer material, although
inexperienced and small in numbers, appeared to be reasonably compe-
tent. The various officers whom he contacted were courteous and
frank in conversation and, in general, were quite optimistic about
their present operations.
The Burmese ArltLyts most pressing needs, according to its officers,
are certain categories of equipment which they feel the UK has been
unable or unwilling to provide. Specifically, the Burmese particularly
desired to obtain Baily bridge equipment sufficient to construct 50-60
bridges, vehicles, (especially li-ton US trucks, although 21-ton and
3/4-ton trucks as well as some Jeeps and armored cars are also desired),
wireless apparatus, and personal gear for troops. The needed equipment
would be used to restore and maintain important lines of communication,
to replace the present fleet of trucks which is rapidly becoming un-
serviceable, and to restore bridges, destroyed by insurgents. The MA
reports that his personal observations tend to confirm these shortages.
During the entire tripe however, No Win never committed himself
to anything which could be construed as a formal request for US assis-
tance, although there can be little doubt that he does not expect the
British to meet fully his requirements and would welcome any aid from
the US. It is quite possible that Ne Win's recent cultivation of the
MA is another in the series of Burmese approaches to US Embassy per-
sonnel (including one by the Prime Minister) for the purpose of sound-
ing out possibilities of obtaining economic and military aid. In ad-
dition, there has gradually been emerging a markedly friendlier atti-
tude toward the US, even within the usually rabidly anti-Western
Socialist Party, evidenced by the recent Army propaganda broadcast
which was most complimentary to the US in differentiating between US
and UK roles in Asia. A corrollary to this attitude is the intense
Burmese desire to sever completely their dependence upon the UX.
On the basis of the MA's report,and a number of conversations with
important Burmese Government officials, the Embassy in Rangoon believe
the amount of aid No Win desires is relatively small and inexpensive,
The Embassy also believes that such equipment would m t only constitute
tangible evidence of US interest in assisting the Burmese to restore
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peace but would also result in substantial economic as vre:iI as '+iili--
t.ary benefits, and therefore suggests the early consideration of ex
tending limited aid to the riurma Army, after coordination with the
British,,
ueaanh11e, Prime Minister hakir- Nu has been informally approached
regardin~~ the possibility of the US providing the Burma Navy with a
r.,
number of OS Coast Guard vessels, After faxpressirrg appreciation of
interest, he stated his belief that the Navy would be pleased to
receive the craft, Regarding other military aid, Nu indicated he could
mace no requests until a complete study of the matter had been lade,
and in the final analysis the Burmese request would depend largely upon
the 'type and quantity of materiel the UK weas prepared to prov:.do, Nu
did say, however, that Burma's principle need was materiel to equip 10
frontier battalions, whose tas-c will be to control the 5ino--B;.irma bor-
der and prevent infiltration. In this respect, du claimed W,~t the
insurgents in Burma wore being liquidated rapidly and were no longer a
;rave menace, whereas the China border was wide-open and easily pene--
trable
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