Asia Lib. HC 427 1965 V. 2 C 460,674 cal Report No. 2 THE ECONOMIC POTENTIAL OF COMMUNIST CHINA Volume 2: Appendices Prepared for: OFFICE OF THE CHIEF OF RESEARCH AND DEVELOPMENT, U.S. ARMY ARMY RESEARCH OFFICE WASHINGTON 25, D.C. Under Contracts Nos. DA-49-092-ARO-10 and DA-04-200-506-ORD-710 STANFORD RESEAR MENLO PARK CALIFORNIA SRI UNIVERSITY OF MICHIGAN LIBRARIES FOR DR. Technical Report No. 2 THE ECONOMIC POTENTIAL OF COMMUNIST CHINA Volume 2: Appendices Prepared for: OFFICE OF THE CHIEF OF RESEARCH AND DEVELOPMENT, U.S. ARMY ARMY RESEARCH OFFICE WASHINGTON 25, D.C. Under Contracts Nos. DA-49-092-ARO-10 and DA-04-200-506-ORD-710 By: With: Yuan-li Wu, Francis P. Hoeber, and Mabel M. Rockwell K. N. Chang Robert J. Barr Ronald Hsia SRI Project No. 4320-211 Defense Analysis Center for Approved: RRB menent мен C. STANTON BABCOCK, DIRECTOR OPERATIONAL TECHNOLOGY DIVISION * SRE June 1963 Asia Library HC 427 W965 v.2 The Alexanan Ecktunestale 8-1-77 1240902-201 CONTENTS APPENDIX A. Chapter Notes 1 APPENDIX B. Supporting Data 35 APPENDIX C. The Agricultural Products of Communist China 47 APPENDIX D. Overall Evaluation of Consumption at Minimum Maintenance Level 67 APPENDIX E. Prices and Unit Consumption Quantities in APPENDIX F. APPENDIX G. Communist China, 1953 to 1957 The Metals and Chemicals of Communist China Productivity of Selected Components of Modern Industry APPENDIX H. Scientific Research and Development in Communist China 85 93 101 119 APPENDIX I. Effect of Communist Planning on Future Growth--A Working Model of the Chinese Economy 129 · BIBLIOGRAPHY I II. Sources in the English Language Sources in Foreign Languages 143 151 ง iii Number TABLES A Page A-1 -2 Status of Education . Agricultural Lands in Selected Countries -3 Classification of Workers 5 9 14 -4 Loan Service Costs, 1950-1960 . 28 -5 Foreign Aid by Communist China to Other Nations 29 -2 B-1 Projection of Communist China's Population at Precrisis Growth Rate, 2.2 percent per Year, 1958 to 1967 Population Projections Based on Estimated Effect of Post-1958 Crisis on Birth Rate and Death Rate 35 36 • -3 Calculation of Coordinates for "Most Probable" Repre- sentative Projection Shown on Figure 2 37 -4 Projection of Communist China's Working-Age Population, 1953-1967. 38 -5 Age Composition of U.S. Population, 1960 39 -6 Total Populations and Working-Age Populations of Selected Countries 40 -7 Age Composition and Size of Working-Age Population, USSR 1958 and Japan 1960 41 -8 Projection of Communist China's Civilian Labor Force, 1953-1967. 42 • -9 Analysis of 1957 Midyear Population for Table D-1 43 -10 Computation of U.S. Dollar Equivalent of Communist China's GNP, 1958-1962 45 C-1 Equivalent Planted Area for Various Grain Crops 48 -2 Source Data on Biological Yields of Wheat and Rice in Eight Major Regions of Communist China 51 -3 Mean Yields of Wheat and Rice . 54 V Number TABLES Page C-4 Comparison of Estimated Yields of Wheat and Rice 55 -5 Numbers of Livestock, 1949-1957 . 57 -6 Production of Oil Seeds and Tobacco, 1952-1958 59 -7 Cotton Production, 1949-1958 62 D-1 Assumed Population Distribution for Use in Consumption Model . 68 -2 Model of Consumption Requirements at Minimum Maintenance Level, Urban Residents 70 -3 Model of Consumption Requirements at Minimum Maintenance Level, Rural Residents 71 -4 Consumption Requirements of the Armed Forces 73 -5 Annual Civilian Personal Consumption Expenditures at Minimum Maintenance Level 74 -6 Daily Caloric Intake from Food Grains per Adult, Based on Consumption Model, Minimum Maintenance Level 76 E-1 Unit Prices for Food Items 87 -2 Average Annual Consumption of Food Items -3 Expenditures for Clothing in Communist China G-1 Metal Processing Industry - Production Data 88 90 102 -2 The Machine Building Industry: A Subsector of the Metal Processing Industry 103 -2A Steel Consumption in the Machine Building Industry Derived from Unit Consumption Quantities 104 -2B Imports of Machinery Related to Output of the Domestic Machine Building Industry 105 -3 Iron and Steel Industry Production Data . -4 Textile Industry - Production Data 107 109 vi Number TABLES G-5 Paper Industry - Production Data -6 Investment in Machine Building, 1952-1957 -7 Estimated Imports of Machinery and Equipment from the USSR, 1952-1960. • Page 110 112 114 -8 Imports of Machinery and Equipment from Western Coun- tries, 1956-1960 116 vii Appendix A CHAPTER NOTES This appendix contains supplementary notes corresponding to numeri- cal references in the text. It also contains source data for the maps. Source Data for Maps The international and internal administrative boundaries shown on all the maps, and the province and other designations shown in the frontispiece and Figure 13, are taken from Plate 1 of China--Provisional Atlas of Communist Administrative Units, prepared by the U.S. Central Intelligence Agency, 1959, and distributed by the U.S. Department of Commerce, Office of Technical Service, Washington, D.C. All other fea- tures of the maps are syntheses of data gathered by Stanford Research Institute from various sources, the chief of which are: George B. Cressey, Land of the 500 Million, McGraw-Hill Book Co., Inc., New York, 1955. Norton Ginsburg (ed.), The Pattern of Asia, Prentice-Hall Inc., Englewood Cliffs, New Jersey, 1958. John Lossing Buck, Land Utilization in China, University of Chicago Press, Chicago, 1937. Goode's World Atlas, Rand McNally & Co., Chicago, 1960. The Times Atlas of the World, Mid-century Edition, Houghton Mifflin Co., Boston, 1959, Vols. 1 and 2. Press releases during early 1963 have announced agreements appar- ently resolving boundary disputes with Burma, Pakistan, the People's Republic of Mongolia, Bhutan, Sikkim, and Nepal. 1 The exact nature and possible permanence of the agreements is not known at the present time. Discussions with Afghanistan are in progress as this goes to press. Notes to Chapter 1 None. Notes to Chapter 2 1/ China's history has been one of high civilization peaks inter- spersed with periods of Malthusian struggle. It is generally held that the peak of ancient Chinese civilization occurred during the Sui and T'ang dynasties, 589-907 A.D. During that period there was considerable commerce, foreign trade, development of roads and resources, and the establishment of a civil service in a form that exists to this day. * Important migrations took place (presumably under the pressures generated by expanding population and limited, fluctuating food supply) in the 7th, 15th, and 19th centuries. In the first migration, the Pescadores Islands and Formosa were colonized. Main trade routes were ** opened; a movement toward the east began. Uneven population distribution has always made it difficult to be accurate with regard to historical conditions. Coincidental with the accession of the Manchus, there was a population explosion in the late 17th century, and another in the 18th when Europeans began to attack China in large forces. These population explosions involved extremely high birth rates which were, however, offset by high death rates, spo- radic famines, and extreme demands on food supply from limited arable land intensively farmed. Conservative estimates by Western scholars indicate the following highlights of Chinese population growth: * Kenneth Scott Latourette, The Chinese: Their History and Culture, Macmillan Co., New York, 1942. ** Ta Chen, Chinese Migrations with Special Reference to Labor Condi- tions, Bulletin of the U.S. Bureau of Labor Standards, July 1923. 2 Year Population (millions) 726 A.D. 41.5 733 43 1650 70 1710 140 1850 342-413 1910 342 Famines and large-scale massacres attendant upon rebellions and internal strife accounted for the virtual lack of overall population growth during the later 19th century. It is to be noted, however, that according to Figure 1 in the main text of this report, Communist China's estimated population in 1960 was 688 million, almost exactly twice the 1910 figure. ** * 2/ Aird finds a methodological bias toward an undercount in enu- meration methods used in the census of 1953, particularly in the failure to take measures to insure the counting of children and young women, and to adjust for the movement of persons (while the census was in progress) from as yet unenumerated rural areas to already enumerated urban areas. According to Aird the probable existence of an undercount is borne out by some peculiarities in the age and sex composition shown by the census results --in particular, a deficit in the 0-4 age group, a deficit in the 5-14 age group, and an imbalance in the sex ratio (too few females). Aird therefore proposes, as a minimum correction, the addition of 11 mil- lion women based on a calculation from the sex ratio shown in the U.N. model table for all nations, and the addition of 8 million children in the 0-4 age group based on the number of survivors of an assumed birth rate in 1948-53, once again calculated from the U.N. model table. These adjustments yield a total minimum addition of 19 million persons, ponding to a population correction of 3.3 percent in the upward direc- tion. corres- ત્ય 3/ The imbalance in the sex ratio (107.7 males for every 100 fe- males), cited by Aird as evidence of error in the 1953 census figures, may actually not be an error at all, since the traditional cultural mores of China have always favored survival of the male infant; moreover, * John S. Aird, "The Size, Composition, and Growth of the Population 11 of Mainland China, in U.S. Bureau of the Census International Popu- lation Statistical Reports, Series P-90, No. 15, Washington, D.C., 1961, Ch. III and pp. 77-78, 84. ** See Table 4, Chapter 3. 3 a large number of women in the younger age groups die because of exces- sive childbearing. Before the recent economic crisis there had been improvements in both these situations under the Communist regime; but these improvements would not have occurred in time to have much effect on the 1953 census. Thus the imbalance in sex ratio recorded in the 1953 census is probably founded on fact, shedding some doubt on the validity of Aird's proposed correction. Notes to Chapter 3 1/ The number of students enrolled in the 1957-58 school year at various levels of education in Communist China has been estimated as shown in Table A-1. Education above the junior secondary level is highly selective. The sharp decline in enrollment between junior and senior secondary levels suggests that the majority of Chinese youths enter the labor force at this time. School enrollment of youths 15 and over (3.5 mil- lion in 1957) was a little over 3 percent of the population of the age group 15 to 24 (in the United States the proportion is 50 percent), and about one percent of the working-age population (assuming the latter was 337 million in 1957; see Table B-4, Appendix B). However, school enrollment in Communist China is increasing rapidly; the increase was 75 percent in senior secondary schools between 1952-53 and 1957-58. practice, in various forms, of combining work with education makes a clear-cut distinction between a "student" and a "worker" very difficult to draw. At any rate, exclusions of students of working age from the labor force are small--not much over one percent of the working-age popu- lation. The In the more advanced economies it becomes necessary to give more of the working-age population longer years of initial training, as well as later retraining to upgrade skills as the productive techniques be- come more complex and advanced. The skill and education of the labor force must be raised to and maintained on a higher level. To be on a self-sustaining basis the economy must also make provision for higher education and basic as well as applied research and development. The composition of the labor input changes from one predominantly physical, to one of proportionately larger mental labor. This change is required in order to adapt the labor input to the larger and more complex capital input. Thus, while Communist China may under present circumstances satis- factorily maintain a large proportion of its working-age population in 4 Level of Education Table A-1 STATUS OF EDUCATION Prescribed Number of Students (millions) Ages (Inclusive) Total All Ages Number under 15 Number 15 and Over (Working Age) Secondary General 3 year junior 13-15 4.34 2.89a/ 1.45 3 year senior 16-18 0.78 0.78 Specialized Senior 0.78 0.78 Higher Total 0.44 0.44 6.34 2.89 3.45 a/ Assuming 2/3 of total students are in age group 13-14 inclu- sive, so that the remaining 1/3 are 15 years old. Source: Leo A. Orleans, Professional Manpower and Education in Communist China, National Science Foundation, Washington, D. C., 1961, pp. 35, 42, 60. 5 its labor force, at the expense of the advanced education program, this situation cannot continue indefinitely. The level of skill and educa- tion of the labor force must be raised steadily as advanced technology and technological uses of capital investment gain momentum. 2/ The estimate of 93 million housewives in China in 1957 may be checked (very roughly) as follows: The Communist Chinese Minister of Labor stated in 1960 that according to a sample survey of the population of 30 cities, each urban worker had to support a family of 3.3 persons, including himself. It was indicated in the statement that the selected cities were large ones, and the number of persons supported by each worker would be expected to increase when smaller urban areas sidered. This expectation is caused by the tendency toward larger fam- ily units in the less industrialized areas. are con- On this basis it might be estimated that the average family through- out China consists of from 3.5 to 5 persons** including the pater famil- ias. For each family there is, presumably, a mater familias (and per- haps also a mother-in-law or one or more daughters-in-law). In the 1957 population of 647 million there might be perhaps 100 million adult bachelors, widowers, widows, and others living alone--not part of family groups. This leaves about 547 million people living in family groups of say, 4.5 persons per family, making a total of 121 million families. Since in many families, as noted above, there may be extra stay-at-home females (a mother-in-law or daughters-in-law) who nevertheless are of working age, it seems to follow that the number of housewives deductible from the labor force in 1957 might have been well over the 93 million estimated in Table 5. Thus the estimate of labor force, derived in the latter table, is probably on the high side. 3/ In the preceding note an estimate of Communist China's Minister of Labor was quoted, to the effect that the average urban worker had to support a family of 3.3 persons including himself. If this estimate be increased slightly to allow for larger families in the smaller cities, it may be assumed that each employed urban worker on the average supports * Ma Wen-jui, The Glorious Ten Years, Vol. 1, 1960, p. 259. ** The Peking People's Daily in 1962 sent a team of reporters to the birthplace of Confucius, Ch'ufu. Five miles to the southeast they visited the village of Tungkuo, with its 1000 people in 11 11 200 households. (Mark Gayn in The Chronicle, San Francisco, Jan. 20, 1963.) 6 four persons (three besides himself). Then the urban population in 1957 of 94.4 million (Table 6) yields an estimate of 24 million employed. This agrees with the government figure of 24.5 million at the end of 1957 (Table 7). 4/ Japan's crude death rate in the period 1935-39 was 1.68 per- cent, similar to China's death rate of 17 per thousand or 1.7 percent in 1953 (Table 2). Furthermore, the age composition of Japan's popula- tion in 1935-39 was practically identical with that of China in 1953, as shown below: Age Group (years) 0-14 inclusive 15-59 inclusive Percent of Total Population Japan (1935-39)ª/ 35.9% 56.6 60 and over 7.5 China (1953)b/ 35.9% 56.8 7.3 a/ Japan Statistical Yearbook, Tokyo, 1958, p. 308. b/ From data in Table 4. By applying the age-specific death rates from Japan, 1935-39, to China's 1953 working-age population, the projection shown in Table B-4, Appendix B, is obtained. The technique used to compute the working-age population in each year was, briefly, to add the survivors of the preced- ing year's age 14 group, and to subtract the deaths of the age group between 15 to 59 for men and 15 to 54 for women, as well as the number of males and females who reached retirement age. To simplify the calcu- lation it was assumed that the numbers of each age in the group prior to entrance into the working age (i.e., 10-14 inclusive) were of equal size, and similarly that the numbers of each age in the group prior to retirement were of equal size. The 1935-39 age-specific death rates are taken from Japan Statistical Yearbook, Tokyo, 1958, p. 22. The only official data on the annual increase of the working-age population consists of two estimates. One estimate is that the annual increase between 1953-57 was about 4 million; the other is that the * China Yearbook, 1958, p. 308. 7 * annual increase between 1958 and 1962 would be about 5 million. figures appear high by comparison with the estimates in Table B-4. These Notes to Chapter 4 1/ A comparison of agricultural land areas in various countries of the world is shown in Table A-2. The figures given are useful for rough comparisons only, since the definitions of various categories of land vary as between countries and also as between sources. 2/ Serious confusion was caused by the Communist Chinese government statisticians (the confusion extended even to themselves!) through the practice they adopted of naming L and A as follows: L = "crop area" A = "crop hectare area" "crop area" × index of multiple cropping = L X.I. Endless confusion apparently arose from the similarity of terms. The Communist Chinese statisticians wound up by spectacularly overesti- mating the total grain crop of 1958 through claiming unit yields** of about 3000 kg per hectare, applicable in theory to the "crop area (L), and then proceeding to multiply these yield figures by the "crop hectare area" (A). This gave a result (375 million metric tons) that was too large by the factor I. The latter being about 1.45 at the time, the statisticians early in 1959 corrected the 1958 crop estimate to + 375 ÷ 1.45 = 258 million metric tons, subsequently lowering the figure to 250 million metric tons. (This figure was still much too large--see Chapter 9.) * ** + Wang Kuang-wei, "A Suggestion on Allocation of the Agricultural Labor Force, in Chi-hua Ching-chi (Planned Economy), No. 8, 1957, pp. 6-9. T'ung-chi Yen-chiu (Statistical Research), No. 1, pp. 33-38, Peking, 1958. T'ung-chi Kung-tso (Statistical Work) No. 19, pp. 4-5, October, 1958. 8 Table A-2 AGRICULTURAL LANDS IN SELECTED COUNTRIES Categories: A = Land under cultivation or customarily planted to crops; does not include permanent meadow or pasture land. B = "Agricultural land" including permanent meadow and pasture land. C = Potentially cultivable land, not now cultivated at all. "Total arable land" = A + C. UA D B or D Country Population 1958/61a/ (millions) Land Area (millions of hectares) Percent of Total Area Per Capita (hectares) Total A B C D A B or D A United States 179 936b/ 185/ 440C/ USSR 209 2,240C/ 221- 591- 10 26 1.06 20% 47% 1.03 (2.54 acres) 2.46 (6.1 acres) 2.83 India 435 326C/ 161C/ 174C/ 49 53 0.37 0.40 Communist China 688 956d/ 112e/ 80f/ 192f/ 12 20 0.16 0.28 (0.4 acre) (0.7 acre) a/ Figure 1, main text. b/ From Statistical Abstract of the United States: 1961 3,615,211 square miles including Alaska and Hawaii. Conversion: c/ 3.615 × 106 sq mi × (2.59 km²/sq mi) × 100 hectares/km 2 106 = 935 X 10 hectares. Food and Agricultural Organization of the United Nations (F.A.0.), Production Yearbook 1961 Rome 1962, Vol. 15. d/ United Nations Statistical Yearbook 1961, 9,561,000 km² e/ 1956-1957 figure; see Table 10, main text. f/ See text, Chapter 4; also Figure 16. 9 * 3/ Table 10 shows that by 1957 (according to official estimates) some 31 percent of the cultivated area of Communist China was irrigated and that in 1958 the irrigated area almost doubled, placing a total of 62 percent of the cultivated land under irrigation. However, the claim for area irrigated in 1958 seems greatly exaggerated. The claimed in- crease in irrigated area from 1957 to 1958 (32 million hectares) amounts to 29 percent of the cultivated area. It seems unlikely that, in addi- tion to regular farming operations, so much additional land could have been effectively irrigated in so short a time. Moreover, even if irri- gation of sorts was accomplished to the extent claimed, much of the bene- fit was apparently lost. The Vice Minister of Water Conservancy stated in 1957 that of the 34.7 million hectares under irrigation in that year, 10 million, or 28.8 percent, were incapable of resisting drought. It is estimated that 17 to 28 million hectares of irrigated land were threatened with waterlogging, and an average of 6 million hectares were waterlogged annually. The chief Soviet expert, Korniev, at a national conference on water conservancy and hydroelectric power, stated that because of improper management many water conservancy projects built in 1958 "met with accidents. He further observed that of a total annual supply (mostly undeveloped) of 2,680 cubic kilometers of water, some 500 were used in 1958, and by 1960 there would be a potential need for 700 to 800 cubic kilometers per year. But the geographic distribution of the irrigation water supply is very unevenly adapted to the need. Engineering problems involved in distributing water among the major river basins are gigantic; it will take several decades to solve these problems and to produce results. Consequently, irrigation efforts in many areas appear to have been ineffective. According to the Commun- ist Ministry of Agriculture, in nine of the irrigation districts in North China only 56 percent of the land within the existing irrigation system was actually irrigated in 1961.† In the province of Kwangtung, of 210 large and medium-sized water reservoir projects, only 160, accord- ing to the same report, were actually serving the purpose for which they were designed. Of these reservoirs the large ones succeeded in irrigat- ing only 20 percent of the planned area, while the medium-sized reser- voirs succeeded in irrigating 40 percent of the land they were designed to irrigate. In a report of January 1962, the area effectively 11 ** ** + ff Chinese Water Conservancy, November 9, 1957. Water Conservancy and Electric Power, No. 4, February 20, 1959. People's Daily, Peking, November 23, 1961. Ibid., January 24, 1962. 10 irrigated in the Pai-sha Reservoir irrigation district of Honan Province was said to have actually declined by some 40-50 percent from 1960 to 1961 so that it was ultimately no more than 10 percent of the total area designed for irrigation. This failure to irrigate effectively has been attributed to incomplete construction as well as destruction of irriga- tion channels, bridges, sluice gates, and other installations and equip- ment. The state of disrepair and incompletion in turn reflects inade- quate planning and the labor shortage that developed both during and after the construction of the various works because of the simultaneous pursuit of too many labor-intensive projects. During the winter of 1961-62 water conservancy work in Communist China aimed primarily at repair and rehabilitation of a large number of irrigation schemes over a wide area. Reports from Taiwan indicate that the number of irrigation works affected, including many small ones, reached 910,000 in Hunan, 200,000 in Anhwei, 88,000 in Fukien, 60,000 each in Kwang tùng and Kwei- chow, and 4,000 in Hopei. Out of the officially claimed 86 million hectares of irrigated land in 1959 perhaps not more than 46 million hectares are under effective irrigation. * Improper irrigation has also led to alkalization of the soil in some areas, such as the irrigation districts within the drainage areas of the North Wei and the Fen rivers, the lower regions of the Yellow River, the North China plain, and some coastal areas. An April 6, 1962 report in the People's Daily indicated that the amount of land affected by alkalization had shown a tendency to expand. The amount of domestic and imported chemical fertilizer used in agriculture in Communist China is reported as follows: ** 4/ * ** Fertilizer Supply (millions of metric tons) Domestic Imported Year Total Production (Residual) 1952 0.32 0.19 0.12 1953 0.59 0.26 0.33 1954 0.80 0.35 0.45 1955 1.26 0.43 0.83 1956 1.61 0.66 0.95 1957 1.94 0.80 1.14 1958 2.71 1.30 1.41 1959 1.90 People's Daily, Peking, April 14, 1959. Economic and Cultural Statistics, op. cit., p. 148. 11 The 1957 total of 1.94 million metric tons, applied to the 112 mil- lion hectares under cultivation at that time (Table 10), amounted to 17.3 kg per hectare or about 15.4 lb per acre. * ** By contrast, in 1955, 380 million acres of U.S. cropland are re- ported to have received 22.7 million short tons of fertilizer, or 120 lb per acre. Notes to Chapter 5 1/ See Note 1 to Chapter 2. 2/ Then: In addition to the symbols defined in the text, let: A = CN number of healthy, active adults working-age population. + .52 P. average food consumption (in designated period) by a person not in the "healthy, active adult" category. FAC+ (PA) CN A .52 P. C + (P = .52P) CN A .52P C + .48P . C A N * ** + + 11 metric ton = 1000 kg. 1 kg = 2.20 lb. 1 hectare 2.47 acre. 1 kg per hectare = 2.20 0.89 lb per acre. 2.47 U.S. Statistical Abstract, 1958, pp. 612 and 641. Deductions from the working-age population to allow for the ill and disabled amount to about 3.4 million (see Table 5, Chapter 3). These deductions would be approximately offset by the addition of a number of persons who are beyond the officially designated working age limit, but who are still in the "healthy and active" category. As calculated for 1957 in Table 5, Chapter 3. 12 Assume: Then: C N = .70 C C. Α΄ F = .52 P C + .48P (.70C) A A = .52 P • C A + .34P · C A :.86 P. C A Thus for E = .86P, C must be 70 percent of C. N Α΄ Q.E.D. 3/ The working-age population of Communist China in 1957 was approximately 337 million (Table 5, Chapter 3). Ground rules that might reasonably be applied in classifying members of the working-age popula- tion as to relative consumption requirements are as follows: Light-work consumption category All students All ill and disabled All housewives 80 percent of urban employed Residual of rural employed after assigning 90 million peasants to the heavy labor category All unemployed persons Heavy-work consumption category All soldiers 20 percent of urban employed 90 million rural employed (peasants, plus construction workers on government projects. This number seems about all that can be absorbed in heavy farming or in really heavy government work, without confusion and wasted effort. See Chapter 3.) Applying these ground rules to the various components of Communist China's working-age population as shown in Tables 5 and 8, Chapter 3, yields the distribution shown in Table A-3, with 71 percent of the working-age population in the light work (or light rations) category and 29 percent in the heavy work category. 13 Component of Table A-3 CLASSIFICATION OF WORKERS Light-Work Category Percent of Working-Age Population Heavy-Work Category Percent of Working-Age Population Number (millions) Number Working-Age Population (millions) 1957 Number (millions) Total working-age population 337 238 71% 99 29% Included in civilian labor force: Urban Employed Unemployed 25 20 5.9 5 1 10 10 3.0 0 0 Rural Employed Unemployed Excluded from civilian labor force: Students Ill and disabled Soldiers Housewives 143 53 16 90 27 55 55 16 0 0 3.5 3.5 1.0 0 0 3.4 3.4 1.0 0 0 3.8 0 0 3.8 1.1 93 93 28 0 0 Source: Tables 5 and 8, Chapter 3, and "ground rules = set up in this chapter note. 14 4/ Processing factors for various types of grain have been esti- mated as follows: Grain Percent of Total Mix (1937 Data)a Milling Rateb/ Wt. Processed Wt. Unprocessed Product ÷ 100 Rice 47.5% .74 .352 Wheat 13.5 .80 .108 Other cereals 35.5 .88 .312 Tubers (grain equiv.) 3.5 1.00 .035 Total 100.0% .807 a/ National Agricultural Research Bureau (NARB), Crop Re- ports, Vol. VI, No. 10, Oct. 1938, Chungking, p. 115. b/ T. H. Shen, op. cit. Hence weighted mean processing factor :.81. This ratio is dependent both on the milling factors and on the "product mix.' A larger share of tubers, coarse cereals, and "brown rice" would increase the factor, hence the figure of .86 used by the Communists in converting unmilled grain to processed "trade grain. ?? 5/ The unit grain consumption quantities shown in Table 17 were derived as follows: 1950-1956 For this pre-Great-Leap era it is recognized that peasants had some stocks of grain. Communist efforts to wrest surplus food from the people for shipment abroad in payment for vitally-needed machinery and chemical fertilizer had not yet been stepped up to fever pitch, and in general, consumption was probably a little above the minimum maintenance level derived in Chapter 5. Thus, in contrast to the 223 kg per year allowance for each adult at minimum maintenance level (Table 16), it has been assumed that on the average, each adult obtained about 245 kg of proc- essed grain ("trade" or milled grain) per year from 1950 through 1956. 15 * With a milling factor of 0.86 this allowance would have required about 285 kg of unprocessed grain per adult per year as shown in Table 17. ** The average allowance of 245 kg per adult per year was arrived at in the following manner: In 1955 a rationing regulation entitled "Tem- porary Measures Governing the Fixed Amounts of Fixed Supplies to Cities and Towns" was promulgated by the ruling regime. This ration amounted to 16.75 kg a month or 201 kg a year for a person doing light work in rice-eating and wheat-flour-eating regions. The corresponding ration for a person doing heavy work was 21 kg per month or 252 kg per year. In developing the somewhat liberalized consumption estimates for pre- 1957 conditions, it has been assumed that every rural adult received the heavy work ration, while only the urban adults were restricted to the light work ration. Weighted in accordance with the 1954-56 urban 十 ​(14 percent) and rural (86 percent) populations respectively, the na- tional mean grain consumption per adult would work out to 245 kg of processed grain. The extra high, or "hard labor," allowance used for all the adult members of the rural population is in general conformity with the fact that until all private food stocks of the peasantry had been sequestered by the Communist government through the establishment of the cooperatives and later of the communes, it was usually possible for the rural popula- tion to supplement the official rations with other supplies. This situa- tion was undoubtedly taken into consideration by the authorities, who usually fixed the official rations for the rural population at somewhat lower levels than for the urban population, a fact which also helped to explain why the rural population has suffered more since 1959, when private food stocks had apparently been exhausted. As a check on the validity of the assumptions stated above, it may be noted that an alternative average consumption figure may be found in a 1937 rural diet survey made by the pre-Communist National Agricultural Research Bureau (NARB).‡ Weighted by the 1953 census populations of the individual provinces, the national mean in this estimate would reach ** 11 * This rate is implied in an article on the utilization of food crops in T'ung-chi Kung-tso (Statistical Work), 1957, No. 19, p. 32. "Analyses of the Food Situation in Communist China, Asian Economics Thrice-Monthly, Tokyo, No. 450, Nov. 20, 1960, pp. 1-10. (See also Chugoku No Shokuryo Jijo in Ajia Keizai Jumpo.) + Table 6, Chapter 3. National Agricultural Research Bureau (NARB), Crop Reports, Chungking, Vol. VI, No. 10, Oct. 1938, p. 115. 16 * = 293 kg a year. The survey indicates that the figures are on a per capita basis, including both old and young persons. If placed on an adult equivalent basis, the corresponding average annual consumption per adult would be 293.86 341 kg--probably of unprocessed grain. Even allow- ing for the milling factor to convert to processed grain, the allowance of the latter per adult according to the 1937 survey would be consider- ably greater than the estimate of 245 kg per year which has been adopted in Table 17 for the unit consumption during the period 1950-1956. Thus the latter appears to be a conservative figure for the period in question. It corresponds to an intake from food grains of about 2350 calories per adult per day as indicated in column 3 of Table 17. This is about 10 per- cent above the minimum maintenance level food-grain caloric intake of 2140 calories per adult per day, established in Chapter 5. Unit Grain Consumption in 1957 * As pointed out in Chapter 5 and in Appendix D, 1957 was apparently a year in which consumption fell to, or slightly below, the minimum maintenance level. Ration reports indicate a consumption of only about 210 kg of processed grain per adult per year. The figure was for Shantung Province, but is considered fairly representative and has ac- cordingly been used in Table 17 to represent 1957 unit consumption of processed grain. It corresponds to an intake from food grains of only 2010 calories per day per adult, and hence is a little below the minimum maintenance standard established in this report. The grain mix in 1957 was such as to afford an average milling factor of about 0.84, requiring 259 kg of unprocessed grain per adult during that year. Unit Grain Consumption in 1958 In 1958 the Communist regime offered the people "more to eat" as an incentive toward acceptance of the commune movement. Also, the people themselves temporarily set aside their traditional inclination toward saving for the future and stepped up their food consumption in the belief that the establishment of the communes removed individual responsibility for economy. Thus it has been assumed that during 1958, average grain consumption returned to the pre-1957 level of 245 kg per adult per year. Shih-shih shou-ts'e (Current Events), Peking, 1957, No. 15, p. 18. 17 * Unit Grain Consumption in 1959 In 1959 the agricultural crisis began. The years 1959-61 were characterized by reports of increasingly stringent food rations. An author in Grain Weekly, house organ of the Ministry of Food, estimated an available supply of only 166 kg of milled grain per adult per year as of the latter part of 1959. To represent the entire year of 1959, how- ever, an average may be taken between 166 kg and 245 kg, the assumed 1958 consumption, yielding an estimated mean consumption of approximately 205 kg of milled grain per year per adult in 1959--possibly a little less as shown in Table 17 because of an unfavorable milling factor resulting from the nature of the typical grain mix at the time. Unit Grain Consumption in 1960 and 1961 There are a great many reports of short rations and ration cuts during 1960-61. Some were in the nature of temporary, localized cutbacks. In many areas there was suffering and deprivation leading to malnutrition and physical debility, if not to actual starvation. In other areas condi- tions were not so acute. In order not to make the mistake of seriously underestimating overall national food consumption on the basis of some spectacularly low localized ration allowances, extensive data have been gathered representing ration allowances for various types of workers in various urban and rural areas, and an attempt has been made to establish a mean figure representative of the national average. Available data for 1961 are as follows: A. Urban Rations, 1961 (Processed Grain) 1. Employed workers and staff, 17.5 kg per adult per month (210 kg per year)--obtained as the median value of 23 cases reported from geographically widespread areas in early 1962. * 2. Unemployed persons: a. Ten years old and over, 168 kg per year per person. b. Children under 10, 75 kg per year per child. See article by Yuan-li Wu in Current History, September 1962, for sources. 18 B. Urban Population Distribution (as of 1957) Pres 3. ** * Total urban population (1957), 94.4 million. Total urban workers (1957), 24.5 million. Percent of population under 10 (1953), 26.5 percent. C. Weighted Mean Unit Consumption, Urban 1. 24.5 million workers @ 210 kg per year 2. 94.4 million persons × .265 = 25.0 million children @ 75 kg per year 3. 94.4 million persons less 24.5 million workers and less 5,150 million kg per year 1,880 million kg per year 25.0 million children = 44.9 million nonworking adults @ 168 kg per year 7,560 million kg per year Total consumption Urban population Per capita 14,590 million kg per year 94.4 million persons 155 kg per year D. Rural Consumption Using a similar procedure, rural food consumption for 1961 is calculated as approximately 137 kg of unprocessed grain per capita, or .86 × 137 = 118 kg of processed grain per capita. ** Table 6, Chapter 3. Table 7. † Table 4. 19 * E. Combined Consumption (Processed Grain) 1. Urban 94.4 million X 155 kg per capita 2. Rural 552 million * X 118 kg per capita Total consumption Total population Per capita Per adult = |||||||| 14,600 million kg per year 65,200 million kg per year 79,800 million kg per year 646 million persons 124 kg per year 145 kg per year For 1960 the unit consumption has been taken slightly higher than the above, or about 150 kg per year per adult (processed grain). For 1962 the consumption is tentatively estimated as virtually the same as for 1961. The caloric equivalent of 145 kg per year of processed grain (about 1390 calories per day as shown in Table 17) is far below the minimum maintenance level requirement of an adult (2140 calories a day from grains or 2400 from all foods, Table 16). Notes to Chapter 6 None. Notes to Chapter 7 1/ During the period 1952 to 1957 it appears that the quality of the statistical data is superior to that of the preceding and succeeding periods. The staff of statisticians was apparently trained in a scien- tific attitude relatively free from pressure to create or distort statis- tics for propaganda purposes. Nevertheless, there are serious short- comings in the statistics for the period 1952-57. These shortcomings are discussed in the text. Table 6. 20 11 11 * 2/ The identification of the metal processing category of industry is derived from classifications given in various places in Major Aspects (particularly pages 172 and 177) and in Economic and Cultural Statistics, page 84. According to these sources, the metal processing sector in- cludes the following components: machinery and equipment manufacturing, 49.9 percent; metallurgical products, 33.3 percent; repair, 14.7 percent. Tables uniformly classify "machinery and equipment manufacturing' as a component of "metal processing sector. The text of Major Aspects, however, uses the term "machine industry" in a loose manner, referring to the entire metal processing sector. The machinery and equipment manu- facturing industry is alternatively designated as the "machine building industry. For brevity and consistency the latter term will be used in this report. The loose designation of the entire metal processing sec- tor as the "machine industry" makes it difficult to segregate metallur- gical products from machine building products in some of the official statistics. The "New 3/ Fixed assets used for production are given in the official statistics for two years, 1952 and 1957; the intervening years' figures can be calculated. An officially announced series of "New Increased Industrial Fixed Assets" in Economic and Cultural Statistics formed the basis of the calculation of fixed assets used in production. Increased Industrial Fixed Assets" series is interpreted as including assets in addition to those used for production. From the data available for 1952 and 1957 it can be determined that in those two years, the pro- portions of production assets to other assets were 84.2 percent and 83.2 percent respectively. The average of these two figures (83.7 per- cent) is applied to the "New Increased Fixed Assets" series to obtain the portion of increased fixed assets that were used for production. Notes to Chapter 8 1/ The estimate of 61.25 billion yuan for the net material product in 1952 (column 3 of Table 29) was derived as follows: First, according to Ma Yin-ch'u in Hain-hua Yüeh-pao (New China Monthly), No. 15, Au- gust 1957, and Ho Wei in Hsüeh-hsi (Study), No. 12, June 1957, 48 per- cent of the expected 1956 net domestic material product was represented by the net agricultural product, the value of which was 42.7 billion yuan. This would make the expected 1956 net domestic material product 42.7 billion ÷ 48 - 89 billion yuan. Second, according to Niu Chung- huang in Hsüeh-hsi, No. 16, August 1957, the expected 1956 net domestic material product was equal to 145 percent of the net domestic material product in 1952. Thus the latter must have been approximately = * Major Aspects of the Chinese Economy through 1956, Peking, 1958 (hereafter referred to as Major Aspects). 21 89 billion ÷ 1.45 = 61.25 billion yuan. Liu (op. cit.) estimated the 1952 material product as 61.1 billion yuan and products in the years 1952 to 1957 as 70.04, 73.88, 78.80, 88.75, and 93.53 billion yuan. 2/ Hollister's 1958-60 estimates are adjusted from current prices to 1952 prices by using the same implied set of price indices for the individual sectors that Hollister used in converting preliminary 1957 figures from current to 1952 prices. Estimates at current prices for the 1950-57 period are available in Hollister's original work. It is assumed there were no significant price changes in Communist China be- tween 1957 and 1960. 3/ The highest growth rate shown by the official estimates during the first Five Year Plan (1952-57) was 14 percent, attained in 1952-53 and again in 1955-56. According to Hollister's figures, the annual growth of the GNP reached its peak of 13.8 percent in 1955-56; the sec- ond highest rate of 13.6 percent was reached in 1952-53. The same is true of Liu's estimate of the net domestic product, the peak annual rate of growth being 12.3 percent in 1955-56. The high rate of growth re- corded for 1952-53 in the official and in the Hollister series of esti- mates may be regarded both as a continuation of the recovery begun in 1949, and as the result of a possible underestimate of the level of production in the 1952 base year. Therefore, the peak growth rate in 1955-56 is doubtless the more significant one. 4/ Ignoring the possible presence of statistical discrepancies, it should be true that for Liu's estimates: GDE + Net Foreign Investment = GNE GNP GDP Net Foreign Investment ≈ GDP GDE ≈ 2 11 column 9 - column 11 From this equation the values of net foreign investment implied by Liu's estimates in Table 29 can be calculated. The results are shown below in comparison with estimates made in Chapter 14 of this report and also in comparison with Hollister's estimates from Table 30: 22 Estimated Net Foreign Investment (billions of 1952 yuan) Liu (Table 29, Chapter 14, Hollister Year Col. 9-Col. 11) a This Report (Table 30) 1952 -1.73 -1.0 -0.92 1953 -1.05 -1.1 -0.67 1954 -0.37 -0.4 -0.38 1955 -1.16 -1.2 -0.83 1956 +0.60 +0.3 -0.15 1957 +1.02 +0.5 +0.03 a/ Table 80, column 3. The years in which the algebraic sign of the net foreign investment was negative represent years of import surplus in which, effectively, foreign countries (principally the USSR) were investing in Communist China. The relatively small size of this net investment from abroad, in comparison with the size of the gross domestic investment, points unmistakably to Communist China's dependence on domestic financing-- i.e., on its own resources in the form of savings--for economic devel- opment. Short of a drastic alteration in the scale of external assist- ance received by the country, the situation described above would place Communist China alongside the USSR as a country requiring "bootstrap" operation if it is to advance. Notes to Chapter 9 1/ * Following is the estimate of net grain exports for column 8, Table 33: For 1953 through 1956, the volume of exports can be derived from official statistics in T'ung-chi Kung-tso. Since the data are given in terms of "trade grain" and include soybean exports, they are adjusted to unmilled products first and soybean exports are subtracted. For 1952 the 1953 export figure is used. For 1957 the average for 1953-56 is used. These choices are made on the assumption that exports are regulated by trade agreements and that a reasonably stable volume * T'ung-chi Kung-tso (Statistical Bulletin), No. 19, 1957, p. 32. 23 * was maintained during 1953-56. On the other hand, exports in 1952 were more likely to be at the level of 1953 than that of the later years because of the gradual recovery of food export and the time needed to develop exports under trade agreements. For 1958-59 the export figures are taken from a Hong Kong publication, Tsu-Kuo. Furthermore, it is assumed that net exports in 1950-51 were negligible and can be disre- garded. There is no definite information on net grain exports in 1960, although Communist China's failure to maintain exports to the Soviet Union in 1960 at the prescribed level, and the purchase from abroad of 5.6 million tons of grain during 1961, would suggest that the total vol- une of grain exports was negligible in 1960. 2/ ** The independent estimates of additions to government stock (column 11, Table 33) are derived as follows: Annual additions to the government's stock in 1953-56 are given in T'ung-chi Kung-tso (Statis- tical Bulletin n) in terms of all food crops, including soybeans. Estimates are made for soybeans on the basis of their proportion in the total output, and these are subtracted from the government stock additions. For those years for which the year-end government stock is the larger estimate available, it is used as the initial stock in the following year. With the exception of 1954 when additions to government stock con- stituted only 2 percent of the total reported output, and of 1956 when there was a net withdrawal, additions to the government's stock were at the level of 4 percent of production for both 1953 and 1955, a normal year and a bumper year respectively. Accordingly, additions to the government's food reserve have been estimated at 4 percent of reported current year's production for 1957-59. Where estimates are available, net changes in nongovernment stock are also computed. But, as mentioned above, where the total year-end stock is unknown, the known government stock is used as the initial stock for the following consumption year. These stock figures should therefore be regarded as minimum values in the computation. * Tsu-Kuo (China Weekly), No. 423, February 1961, pp. 3-4. ** Issue No. 19, 1957, p. 32 t I.e, 4 percent of the production listed in column 2 for the consump- tion year after the one in question. 24 3/ According to Jasny, in order to arrive at "barn crops" in Soviet statistics the indicated percentage discount of official crop estimates ranges from 16.5 to 28 percent for the 1935-59 period and from 20 to 23 percent for the 1937-39 period. The average discount would be about 21 percent. Reports in T'ung-chi Kung-tso (Statistical Bulletin), No. 19, 1957, on methods of estimating crops in Hopei and Heilungkiang indicate that the estimates are made for crops "on the root," although an estimate in Heilungkiang to determine deliveries to cooperatives as a check of production estimates was being proposed toward the end of 1957. It is presumed, therefore, that all official production estimates are based on "biological yields. Furthermore, the necessary discount is increased in the post-1957 period because of the labor shortage dur- ing harvest, the exaggerated reports of yield "on the root, the greater inducement to theft, sabotage, and negligence under the commune super- visors, and the additional difficulty presented by a large potato crop grown on hill slopes. On the other hand, the pre-1956 estimates are not subject to the same influences of upward bias. 11 Notes to Chapter 10 ** 1/ After the gross value of the output of each sector has been determined, the gross and net value added can be derived through the subtraction of deductible cost (to give gross value added) and deprecia- tion (to give net value added). The method employed is essentially the same as that employed by Liu, with one important exception. That is, while the production of consumers' goods is adjusted downward somewhat arbitrarily in the Liu study by assuming that the output of certain un- identified consumers' goods expanded at the same rate as that of a group of identified consumers' goods, no such rule of thumb has been adopted in this reappraisal. Liu's assumption was apparently prompted by his belief that the estimates would otherwise show a growth of consumers' goods output exceeding the supply in evidence. It is believed that much of the apparent difficulty lies in Liu's not having discounted for 'new product effect" in the first place. Since the estimates in this report start out with a series of adjusted estimates of modern industry output, no assumption similar to Liu's has to be made. 11 * Naum Jasny, The Socialized Agriculture of the U.S.S.R., Stanford Univer- sity Press, Stanford, Calif., 1949, pp. 548 and 744. ** T. C. Liu, op. cit. 25 2/ A considerable portion of the apparent statistical increase in industrial output, and hence in manufacturing, shown by Communist esti- mates in 1957-58 and 1958-59 (Table 23, Chapter 7) must be attributed to the inclusion of the supposed results of the mass development drives in the iron and steel and related industries. Inasmuch as the adjusted modern industry series of estimates from 1958 onward, used in Table 46, is derived from empirical correlation with modern industrial indicators such as electricity input and steel production, it is believed that the estimates do not allow for the resultant incremental output of the mass drives. A correction should therefore be made to the total value added in the manufacturing sector by adding estimates of the value added by "native" iron and steel* produced in 1958-60. The latter can be obtained from the separate study on iron and steel by Yuan-li Wu. The estimated gross and net values added are as follows: ** Contributions by the "Native" and Semimodern Pig Iron and Steel Sectors (Billions of 1952 Yuan) 1958 1959 1960 1961 1962 Gross Value Added Depreciation -1.37 +0.45 +0.64 0.0 0 a/ 0.27 0.37 0.3 0 Net Value Added -1.37 +0.18 +0.27 -0.3b/ 0 a/ b/ No estimate available. Bringing project value to zero. The negative value added in 1958 implies that the product of the initial mass iron drive was worth less than the deductible material cost. While the situation improved slightly in 1959-60, the entire sector was unprofitable. This is a fact that was probably recognized by 1961, but should have been recognized much earlier if proper accounting of labor and material costs had been made. It is suspected that through nonpay- ment of the labor force and failure to account for the cost of other resources used in the communes, Communist China's planners perpetrated the error of employing both labor and material resources in the produc- tion of goods that were of less value than the resources used up. ** 11 The so-called "backyard industries, see Chapter 4. Yuan-li Wu, monographic study on iron and steel industry, op. cit. 26 One of the decisions of the new economic policy ratified in the April 1962 meetings of the National People's Congress was to halt the operation of such nonprofitable enterprises. Since such pro forma ratification by the Congress usually takes place after a Communist Party decision has already been put into practice, and since a general indus- trial retrenchment had already occurred in 1961, it has been assumed that a correction of the estimates of value added in manufacturing by the backyard iron and steel industry in 1961 need not be made. Notes to Chapter 11 None. Notes to Chapter 12 None. Notes to Chapter 13 1/ Loan service data are shown in Table A-4. According to press reports, foreign aid by Communist China to other nations during the period 1953-60 was as shown in Table A-5. 2/ 3/ ** Estimates of the number of Soviet experts and technicians range + from 15,000* to 80,000, with two other estimates (23,500-38,000 and 40,000*) between. The high figure may be attributable to the inclusion of a large Soviet air force advisory group in 1950-51 during the Korean war and of the military advisers in Communist China when the moderniza- tion of the armed forces was carried out in 1955-56. These advisers * ** + キ ​W. W. Rostow, The Prospects for Communist China Society, Cambridge, 1954, p. 208. Chang Wei-ya, The Study of Communist China's Finance (Taipei, 1957), p. 218, quoted United Associated Press. Peter S. H. Tang, Communist China Today (New York, 1956), p. 392. Robert F. Dernberger's Essay on International Trade of Communist China (Ann Arbor, The University of Michigan Press, 1958), p. 122. 27 Table A-4 LOAN SERVICE COSTS 1950-1960 (Millions of Yuan) Total Year Loan Service Domestic Loan Service External Loan Service (Residual) 1950 n.a. n.a. 1951 n.a. 76.5 1952 n.a. 73.4 1953 91 70.4 20.6 1954 210 67.3 142.7 1955 666 202.2 463.8 1956 722 189.4 532.6 1957 829 238.6 590.4 1958 1, 130 290.5 839.5 1959 1, 100 353.7 746.3 1960 1, 200 375.1 824.9 Note: The budget figures for 1951-52 are not available and estimated amounts are used. The figures for 1953-56 are final but those for 1957-60 are preliminary. 28 Country Table A-5 FOREIGN AID BY COMMUNIST CHINA TO OTHER NATIONS Grants 1953-1960 Albania Gift of 10 million rubles (Oct. 10, 1954). Burma Cambodia Ceylon Egypt Loans Credit of 55 million rubles for 1955-60 (Jan. 16, 1959). Credit at 2-1/2% interest of 20 million kyats (Jan. 11, 1958) = 10 million yuan. Gift of 8 million British sterling (Jan. 11, 1958) = 53 million yuan. Gift of 75 million Ceylonese rupees over 5 years (Sept. 19, 1957) 38 million yuan. Gift of 20 million Swiss francs (Nov. 10, 1956) = 11 million yuan. Credit of 50 million Ceylonese rupees (Sept. 17, 1958) = 24 million yuan. Guinea Hungary Indonesia Gift of 30 million rubles (1956). Gift of 72 million yards of cotton cloth or the equivalent of about $10 million or 24 mil- lion yuan. Interest-free credit of 100 million rubles over 1960-63 (Sept. 13, 1960). Credit of 200 million rubles (May 13, 1957). Credit of 15 million U.S. dollars (Nov. 3, 1956) = 35 million yuan. Credit of 48 million Swiss francs (April 17, 1958) = 20 million yuan). 29 Country Table A-5 (concluded) Grants Loans N. Korea Annulment of debts totaling 280 million yuan (Nov. 23, 1953). Gift of 800 million yuan, 1954-57 (Nov. 23, 1953). Interest-free credit of 40 million rubles (Sept. 27, 1958). 1% interest credit of 170 million rubles (Sept. 27, 1958). Mongolia Nepal Gift of 160 million rubles over 1956-59 (Aug. 29, 1956). Gift of 60 million Indian rupees over three years (Oct. 7, 1956) = 30 mil- lion yuan. Gift of 100 million Indian rupees over 1960-62 (May 21, 1960) 55 million yuan. N. Vietnam Gift of 800 million yuan (July 7, 1955). Gift of 100 million yuan (Feb. 18, 1959). Credit of 100 million rubles over 1959-61 (Dec. 29, 1958). Credit of 200 million rubles (May 31, 1960). Credit of 300 million yuan (Feb. 18, 1959). Yemen TOTAL GRAND TOTAL Unused ACTUAL 2,391 million yuan 3,673 million yuan 130 million yuan 3,543 million yuan Credit of 70 million Swiss francs (Jan. 12, 1958) 28 million yuan. 1,282 million yuan Source: Press reports. 30 may have been withdrawn from Communist China upon completion of their mission. A number of the industrial experts and technicians were re- portedly withdrawn at the end of the first Five Year Plan. Again, a mass exodus of Soviet technicians took place in 1960 as a result of conflict between Soviet and Communist Chinese leaders. It appears reasonable to assume that expense for the military advisers in the early 1950's was paid from Soviet military aid to China and that at least one- half of the salary paid to the Soviets was spent in China. If we take the figure 15,000 as the average number of persons during 1950-59, at a salary of U.S. $500 per month, the annual expense would be $90 million, one-half of which would be $45 million, making a total of $450 million of outpayments from this source for 1950-59--the 1960 figure being dis- regarded. No information regarding expenditure by diplomatic missions and cultural and trading delegations is available. If we utilize the annual average of China's expenditure abroad during World War II, which was much higher than for the years prior to the war, these expenditures would be $10 million a year, making a total of $110 million for 1950-60. 4/ Foreign aid in 1961 and 1962 was reportedly as follows: Values in Millions 1961 1962 Unused New Unused New Albania (aid)a/ Burma (credit); Ceylon (aid)- 112 (rubles) b/ 14 (U.S.$) 14 (U.S.$) 16 (U.S.$) Cuba (credit)d/ 48 (rubles) Ghana (credit)- 48 (rubles) 20 (U.S.$) Guinea (credit) 33 (rubles) 33 (rubles) f/ Nepal (aid)— 32 (U.S.$) 2 (U.S.$) Outer Mongolia (credit) 33 (rubles) Total 300 million yuan 113 million yuan a/ b/ c/ d/ गेको e/ 112,500,000 new rubles (Jan. 31, 1961). 30 million sterling--$84 million over 1961-67, interest free and repayment in ten annual installments (Sept. 1961). 75 million rupees--$15,750,000 (Aug. 7, 1961). Interest-free credit 420 million old rubles over 1961-65 (Oct. 13, 1960). Interest-free credit 7 million sterling--$19,600,000,' over 1962-67. f/ 3.5 million sterling--$9.8 million over 1962-66 (Sept. 9, 1961). Source: Press reports. 31 5/ The categories of imports shown in Table 71 are composed of the following items, listed in order of importance by value: Machinery and Equipment Oil drilling equipment Farming equipment Power equipment Instruments Metal cutting machines Electrotechnical equipment Excavators and roadbuilding equipment Compressor equipment Hoisting equipment Iron rolling equipment Mining equipment Manufactured Goods Rolled iron pipes Nonferrous metals and alloys Drawn iron Paper Ferroalloys Switches Construction materials Conducting wire Cable Chemicals Transport Equipment Automobile and garage equipment Railroad rolling stock Fertilizers Organic and inorganic chemicals Dyeing, tanning, and coloring materials 6/ The categories of exports listed in Table 75 are composed of the following: Food, Beverage, and Tobacco Rice and miscellaneous grains Meat and meat preparations Fruits and vegetables Tea Fats and oils Eggs Tobacco and manufactures Fish Foodstuffs for animals Crude Materials Soybean and oil seeds Wool and animal hair Silk and other fibers Hides, skins, and furs Bristles, and feathers Cotton Nonferrous metals and alloys (tin, tungsten, molybdenum, antimony) Nonmetallic minerals (sulphur, fluorspar, magnesite, talcum) Iron ore 32 Manufactured Goods Textile yarn and fabrics Clothes and linings Cast iron Ships Cement Chemical products (caustic soda, calcined soda, sodium sulfide) Glass, glassware, and pottery Leather shoes Tung oil Sewing machines 33 Appendix B SUPPORTING DATA Table B-1 PROJECTION OF COMMUNIST CHINA'S POPULATION AT PRECRISIS GROWTH RATE 2.2 PERCENT PER YEAR 1958 to 1967 (Millions of Persons) Year Year-End Population Projected at 2.2 Percent per Year from 1957 Population as a Base Estimated Increase over Pre- ceding Year (.022 × Col. 2) Midyear Population Interpolated from Projected Year- End Population (1) (2) (3) (4) 1957 646.5a/ 637.1 1958 660.7b/ 14.2 653.6 1959 675.2 14.5 668.0 1960 690.1 14.9 682.7 1961 705.3 15.2 697.7 1962 720.8 15.5 713.1 1963 736.7 15.9 728.8 1964 752.9 16.2 744.8 1965 769.5 16.6 761.2 1966 786.4 16.9 778.0 1967 803.7 17.3 795.1 a/ b/ Official estimate of 1957 population (Table 1). This figure is a projection from the 1957 base population at the assumed 2.2 percent growth rate. It is virtually equal to the mean of the two unofficial estimates for 1958 given in column 2 of Table 1. 35 Table B-2 POPULATION PROJECTIONS POPULATION PROJECTIONS BASED ON ESTIMATED EFFECT OF POST-1958 CRISIS ON BIRTH ON BIRTH RATE AND DEATH RATE Year-End Figures Case 1: Moderate Food Deficiency 1959-1963, Followed by Slow Recovery Case 2a: Severe and Prolonged Food Deficiency, Approaching Famine Case 2b: Disaster; Famine and Pestilence from 1964 Onward Year Assumed Birth Assumed Death Natural Increase Rate/ (percent) (1) (2) Ratea (percent) (3) Rate Number (percent) (millions) (4) (5) Year-End Population (millions) Assumed Birth Assumed Death Natural Increase. Ratob/ (percent) (6) (7) Rateb/ (percent) (8) Rate Number Year-End Population (millions) Assumed Birth Assumed Natural Increase Year-End Death (9) (percent) (millions) (10) (11) Rate