Created: 2/24/1950

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Secret Protocols The recently announced treaty between

China and the USSR was almost certainly accompanied by secret protocols designed to providetronger Soviet position in tbeilitary organization, in strategic segments cf the Chinese economy, and in China's border regions. It is not bkely that protracted negotiations would have been necessary to reach agreement on thetexfof the treaty.

Military Agreements Unpublished military agreements

probably provideoviet assistance to the Chinese Communist ground and naval forces and their embryonic airoviet access to Chinese naval and airhe "joint" development of such bases using Soviet equipment andheof military and technical personnel;oviet mibtary mission to China. The USSR wiU probably give special attention io the development of the Chinese Communist air arm, which it will beosition -to dominate from the outset; to Chinese Communist service schools; aod to the selection of reliable Chinese Stalinists as political and intelligence officers.

Economic Terms In the economic field, the USSR has

probably obtained secret rights toits preferred position in Manchuria, establish Soviet trading firms, assign Soviet advisers and technicians to strategic segments of the Chinese economy, extend Soviet air privileges in the border regions and to China proper, and



engage in preclusive buying ol strategic minerals. One economic pact may deal specifically with Slnkiang; an arrangement for ihe joint development of that province, together with provision for Soviet advisers with thegovernment, would make it unnecessary for the USSR to seek territorial concessions in Slnkiang at this time.

Possible Friction Meanwhile, friction will probably

develop between China and the USSR over Implementation of the0 million credit agreement. As in the case of similar Soviet credits to the European Satellites, the USSR may use the agreementever to extract concessions from the Chinese. The USSR will not only tend to overrate the value of Soviet goods but may insist on deducting from the credit any costs of technical advisory assistance, on receiving credit for the return of equipment originally obtained in lhcof Manchurtan industrial installations, and on charging exorbitant transportation costs.



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