SOVIET ECONOMIC LEVERAGE AGAINST COMMUNIST CHINA (CB 61-22)

Created: 4/4/1961

OCR scan of the original document, errors are possible

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April jyux

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CURRENT SUPPORT BRIEF

SOVIET ECONOMIC LEVERAGE AGAINST COMMUNIST CHINA

OFFICE OF RESEARCH AND REPORTS

CENTRAL INTELLIGENCE AGENCY

eport represents lha immediate views of the originating Intelligence components of the Office of Research ond Reports. Comments are solicited.

This document contains Trtformatlon aflectlng the natkiflal-Arfens'e'of the United States, within the jheanlrig ofTitleSC,. the transmission or revelation of which in any manner to an unauth^tf_eS"parson Is prohibited by law.

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SOVIET ECONOMIC LEVERAGE AGAINST COMMUNIST CHINA

Following many mouth* of Chinese Communist efforts to contest the USSR on matters of doctrine and international strategy, the USSR inithdrewoviet technicians serving in China. Although the current propaganda lino of both countries stresses unity and harmony, Moscow could, if it wanted to, apply additional pressures.

The USSR could:

Reduce the financial ability of Communist China to import Soviet goods (a) bymaller amount of Chinese export offerings, especially of light manufactured items tbat China might have difficulty marketing elsewhere, or (b) by pressing for early repayment by China of short-term indebtedness, which has beento build up to the equivalent of soveral hundred million dollars.* This form of pressure would be particularly convenient because it would notreach of contract. All oxber measun in this list, lo contrast, have either legal or ideological

Stop the flow to Communist China of blueprints andon advanced technology. Although China could turn to non-Communist sources for some of this information, many of theprocessos that it wants are closely guarded secrets, which tne west probably would be reluctant to release to China.

Discontinue tho training of Chinese Communist scientists and technicians in the USSR. During theears, China's principal hope of obtaining well-trained scientists with advanced degrees rests on continued Soviet willingness to train them. training facilities in China Itself are still generally inadequate, and the regime almost certainly would not riskof students by sending large numbers of them to non-Communist countries for graduate scientific training.

Cut off shipments to Communist China of machinery,and POL. The USSR has been China's major supplier of such items and could disrupt the China's economy by suddenlyoff deliveries. It would take China time to turn to oon-bovlet suppliers for even those items readily available elsewhere. Many items, such as military hardwaro and spare parts for the largo number of Soviet machines acquired during the past decade, could not be readily obtained.

Persuade the Buropeao Satellites to apply similar economic sanctions. Economic support from Eastern Europe is important for Communist China, because they supply technological information and technicians, train Chinese researchers, supply largo quantities of machinery, buy Chinese exports, and grant China substantial short-term credits (presently estimated0 million).

tohort-term indebtedness to the USSR in

hinose ability to import goods for industry (from allwould be reduced by nearlyercent comparod to0 level.

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