Foreign Relations of the United States, 1949, The Far East: China, Volume IX

646G.9331/11–449: Telegram

The Consul General at Tientsin (Smyth) to the Secretary of State

Tientsin, November 4, 1949—9 a. m.
[Received November 10—10:46 a. m.]

902. Recent press reports in Hong Kong papers and elsewhere appear stress opportunities for extensive import-export trade development with Chinese Communists and intimate golden opportunities await aggressive firms willing promote trade relations with Communists. Continually expanding North China foreign trade since Communist take-over cited as illustrating opportunities awaiting Hong Kong and foreign firms elsewhere.

We believe this to be misinterpretation statistics and ignorance certain facts re trends North China trade at present time. Granted North China exports to US and Hong Kong steadily increased since Communist take-over. This, however, due complete standstill of trade for several months early this year which got off to very slow start and is still substantially below average for 1948 when Kmt Tientsin was virtually surrounded by Communist armies. For example, Tientsin consular declared exports to US figures during period June–October 1949 when Tientsin served as only major active port in China (Shanghai blockaded): Total monthly shipments to US averaged approximately $1.5 million. In comparison 1948, total declared Tientsin exports to US under Kmt approximately $20 million.

There were no new export contracts in November and December 1948 due military conditions. Shipment statistics for these months represent carry-overs from previous months. Therefore, figures for over-all exports to US from Tientsin stemmed from trade in period January–October 1948 resulting in trade average of $2 million per month.⁴¹ Available information indicates exports to Hong Kong that period proportionately greater than recent Communist North China-Hong Kong trade.

Re imports, exact figures not available but Tientsin total monthly imports June–October 1949 believed same proportion as during first 10 months 1948 under Kmt. When considering June–October 1949 imports included also commodities for Shanghai and other North China areas as well as for Manchuria, actual import trade figures for North China alone must be considered as well below those of last year.

Foregoing does not take into account barter deals with Soviet Union which appear to be expanding and becoming of growing importance and which may even commence to supplant most direct trade with US and Hong Kong in wool, bristles, furs and other commodities (see ourtels 859, October 17 and 788, September 27⁴²).

Suggest facts mentioned above and in reference telegrams and other telegrams emanating this Consulate General re North China trade might be used as basis for preparation VOA broadcast to counteract recent rosy VOA broadcast and other news reports re North China trade.

Smyth

41. For figures during April and May 1949, see telegram No. 306, May 11, 3 p. m., from the Consul General at Tientsin, p. 982.
42. Neither printed. The former (611.616/10–1749) reported bristles formerly finding an outlet in the United States were being bartered by the Chinese Communists with the Soviet Union for gasoline, trucks, textiles, and machinery. The latter (165.470/9–2749) indicated about 150 tons of Chinese wool had been purchased in the last few months by the Soviet trade delegation.