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strong on its own feet.

Zhou Enlai informs that they would like to receive an additional 800 specialists from Soviet Union.

Stalin says that this request will be examined and that we will try to send as many

as we can.

Zhou Enlai asks also for assistance with technical documentation (blueprints, etc.). Stalin answers that this is, indeed, nec

essary.

Zhou Enlai asks if it will be possible to continue to educate students in the USSR and to send interns to Soviet enterprises.

Stalin expresses agreement.

Zhou Enlai touches on the question of the military five year plan. Informs that materials are under preparation and that a written report will be presented. Also wishes to receive military equipment.

Stalin asks what Zhou Enlai has in mind: shipments of weapons or equipment for military factories.

Zhou Enlai says that he meant shipments of weapons. Noting that since agreement has already been expressed with regard to weapons for 60 divisions, he would like to discuss shipments for naval forces. Asks what sort of assistance could be received in the way of airplanes.

Stalin asks whether the Chinese government is thinking of building aero-manufacturing plants.

Zhou Enlai says that this would be very difficult to do in the course of the first five year plan, particularly with regard to jet airplanes. Notes that such construction is not planned to begin until at least 5 years from now, and motor-building - in 3 years.

Stalin points to the example of Czechoslovakia and Poland, which began with assembly plants. Says that the USSR could send China motors and other airplane parts, and China could organize the assembly of these airplanes. Cadres can be trained in this way. We went through the same process. Such a process would be more beneficial for Chinese comrades as well. First you must build 1-2 factories for motor assembly. We will send motors and other airplane parts which would then be assembled in China. That's how it was done in Poland, Czechoslovakia, and Hungary. This ought to be organized. Having organized assembly plants, you could then, in another 3 years, build an airplane factory. That is the easiest and the best way.

Zhou Enlai says that they are beginning to understand this and are organizing maintenance and assembly plants. He adds that if comrade Stalin finds it necessary to hasten the process, then they will take all appropriate measures to comply.

Stalin asks whether divisions of some sort have been organized in order to receive the shipment of weapons for 60 divisions which Soviet Union sent to China.

Zhou Enlai explains that out of the 10 divisions' worth of armaments that China has received, 3 have been given over to Korea and 7 have been earmarked for Chinese detachments in Korea.

Stalin asks if he understands correctly that all of the weapons will go to the Korean front.

Zhou Enlai affirms that it will be so, assuming that the war will continue. Informs that, out of the total of 60 divisions' armaments, the Chinese government is intent on sending 3 to Korea, preparing 42 divisions [of Chinese soldiers] to serve in Korea [ellipsis in original]

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Stalin asks whether the Chinese have gotten used to the new weapons.

Zhou Enlai explains that they are gradually becoming proficient with the new weapons, with 3-4 months of training.

Stalin. Under these circumstances we operate in a way so as to allow soldiers to become familiar with the weapons and the overall organization of the division. This takes time - approximately 6 months. Without it one could lose the weapons. Besides, during this time we inspect the operation of various mechanisms, and only then do we send these units to the front. Of course this preparation could be carried out behind the front, in Korea, for example. Half of the divisions receiving the new weapons should remain in China.

Zhou Enlai notes that the shipment of divisions to Korea results in losses, which must be made up.

Stalin emphasizes that it is imperative to train the divisions, so as to make them stronger.

Zhou Enlai raises the question of assistance with artillery.

lery pieces.

Zhou Enlai repeats his request for assistance with artillery. Emphasizes that for every Chinese shell fired, the Americans answer with 9 shells of their own.

Stalin. That's bad. Adds that if the Americans are firing 9 shells, the Chinese should be firing 20. We smothered the Germans with artillery. We had a gun stationed every 2 meters, while the Germans had a gun every kilometer. Artillery is important stuff. The Chinese government needs to get the munitions production going. We will help you build these factories.

Zhou Enlai points out that they are reorganizing existing factories and are planning new factories.

Stalin. That is necessary. Machine tools are of utmost importance here.

Zhou Enlai says that they have machine tools, but old ones.

Stalin says that machine tools are essential in the production of ammunition for 122mm, three-inch and anti-aircraft guns. We can help in this matter. Adds that it is not necessary to build large factories. We build ammunition in different plants: one plant makes shell casings while another loads them. It's difficult to do everything in one factory.

Zhou Enlai announces that the Chinese government will act upon the advice of the Soviet government regarding its aviation industry and take all measures to further its development.

Stalin emphasizes the importance of first organizing assembly plants.

Zhou Enlai says that the Chinese government plans to build tank-producing factories: one for light tanks with an output of 1 thousand tanks per year, and another for medium tanks, to be completed in 4-5 years.

Stalin advises to start here with assembly plans as well, pointing out that during the war we converted automobile factories to produce tanks. Says that it would be good for China to have 1-2 auto assembly plants.

Zhou Enlai says that they plan to build a factory in Changchun with an output of 20 thousand cars and are organizing an assembly plant with an output of 3 thousand cars a Stalin asks whether China can produce year. Asks for assistance in the planning of ammunition. yet another factory.

Zhou Enlai answers that they have not yet addressed this question.

Stalin notes that, all in all, it is more difficult to transport ammunition than artil

Stalin emphasizes that cadres must receive training in assembly and maintenance factories. This issue must be addressed. Zhou Enlai agrees completely with this

observation and notes that the Chinese government is addressing this matter. They have maintenance factories and are currently working to organize assembly plants; these plants will open next year.

Stalin inquires whether China has worker education schools in their factories. Adds that we have such a school in every factory.

Zhou Enlai admits that this is one of the weaker spots. They are taking measures to rectify the situation. There are courses given in factories. They are trying to attract students and are selecting party members to teach.

Stalin points out that we have a special ministry, the Ministry of Labor Resources. There are vocational schools. It would be good for China to establish something of the sort. Every year these schools graduate around 1 mln. young workers.

Zhou Enlai asks, what sort of institutions does Soviet Union have to train middle management cadres[?]

Stalin explains that there are special technical schools for this purpose.

Zhou Enlai says that he would like to discuss the question of radar.

Stalin promises to assist in this matter. Radio and radar are very important.

Zhou Enlai says that they were thinking of building assembly plants for this purpose.

Stalin emphasizes that subsequently they should build radar equipment manufacturing plants.

Zhou Enlai says that so far they are not capable of producing radar equipment.

Stalin promises to help.

Zhou Enlai returns to the question of specialists. Says that the Chinese government does not intend merely to ask us for help with specialists but also plans to prepare its own specialists.

Stalin approves of this, pointing out that, in time, other countries will ask China for specialists: India, Burma, Indo-China. Adds that it would be wiser for the Chinese government to send engineers and technicians to Soviet factories, where they could hone their skills.

Zhou Enlai raises the question of defraying the costs that China bears from the trade imbalance between the two countries. Says that the Chinese government would like to ask for a new loan. However, observes Zhou Enlai, we understand that this

would be a burden for the Soviet Union.

Stalin points out that this is because we came to power earlier, that we were lucky. If the Chinese comrades had come to power before us, then we would have had to ask the same of them.

To this Zhou Enlai responds that Moscow is the center from which all nations derive inspiration for their struggle for liberation.

He goes on to give a short account of the situation in Korea. He points out that up until May 1951 the war in Korea was not static, but was a war of movement. Since May 1951, a front has been established, and the war has become static. Both sides are about equal in strength. The enemy is in no position to carry out an offensive. There is a certain equilibrium. But we are not carrying out large offensives, either. Like the enemy which has reinforced its position 15-20 km. deep, so have we created our own fortified zone, and continue to dig even now. The enemy has not been able to destroy our fortifications. The front line extends for about 200 km and is completely fortified, as are the left and right flanks.

Mao Zedong has put forth three questions. First will we be able to repulse the enemy? We are convinced that we will. Second - will we be able to hold our present positions? This year has shown that we will be able to hold and strengthen our positions. Third - will we be able to carry out an offensive, to attack the enemy? Earlier we thought that we would hardly be able to carry out an offensive for more than 7 days. Now we are sufficiently strong to launch longer offensives and have entrenched ourselves well enough to withstand bombing raids.

Stalin asks whether they are capable of widening the scope of the offensives.

Zhou Enlai explains that they can launch offensives to capture isolated positions, but a general offensive would be difficult to carry out. Since the war acquired its static nature, the American command has been intent on drawing out the negotiations and is not interested in signing a truce.

Stalin says that apparently the Americans want to keep more Chinese POWs. That would explain their refusal to return POWs. Perhaps they turned them over to Jiang Jieshi.

Zhou Enlai affirms that there are agents of Jiang Jieshi among the POWs.

Stalin observes that Americans want to decide the POW question on their own, in

defiance of all international laws. Under international law the warring sides are obligated to return all POWs, except those convicted of crimes. What does Mao Zedong think regarding this matter: will he give in or will he hold his own?

Zhou Enlai briefly relates the differences that separate them and the [North] Korean comrades in this matter. America has agreed to return 83 thousand POWs, and [North] Korea was ready to accept the offer. However, they have not considered the crafty game that America is playing here - out of the 83 thousand, only 6400 are Chinese, and the rest Koreans. In truth, they are supposed to return another 13,600 Chinese volunteers, but the Americans don't want to do this, though they are quite willing to return 76 thousand Koreans. This clearly shows that they are out to provoke us, by trying to drive a wedge between China and [North] Korea. Stalin asks how many Korean POWS are there.

Zhou Enlai answers - 96,600. Emphasizes that the question of the number of Chinese and Korean POWs supposed to be returned is a matter of principle. Informs that the Chinese government is firmly committed on having all 116 thous. POWs, including 20 thous. Chinese, returned. But if Americans were to agree on returning a few less, then we would not strongly object, if [they] promised that negotiations for the return of the other POWs will continue.

tion.

Stalin affirms that this is the right posi

Zhou Enlai informs that Mao Zedong, having analyzed the current situation regarding this matter, believes that one should stand firmly committed on the return of all POWs. The [North] Koreans believe that the continuation of the war is not advantageous because the daily losses are greater than the number of POWs whose return is being discussed. But ending the war would not be advantageous to the USA. Mao Zedong believes that the continuation of the war is advantageous to us, since it detracts USA from preparing for a new world war.

Stalin. Mao Zedong is right. This war is getting on America's nerves. The North Koreans have lost nothing, except for casualties that they suffered during the war. Americans understand that this war is not advantageous and they will have to end it, especially after it becomes clear that our troops will remain in China. Endurance and

patience is needed here. Of course, one needs to understand Korea - they have suffered many casualties. But they need to be explained that this is an important matter. They need patience and lots of endurance. The war in Korea has shown America's weakness. The armies of 24 countries cannot continue the war in Korea for long, since they have not achieved their goals and cannot count on success in this matter. Koreans need our help and support.

Every American soldier is a speculator, occupied with buying and selling. Germans conquered France in 20 days. It's been conquered France in 20 days. It's been already two years, and USA has still not subdued little Korea. What kind of strength is that? America's primary weapons, says comrade Stalin jokingly, are stockings, cigarettes, and other merchandise. They want to subjugate the world, yet they cannot subdue little Korea. No, Americans don't know how to fight. After the Korean war, in Asks about the bread situation in Korea. particular, they have lost the capability to Says that we can help them.

Zhou Enlai says that Korea is having difficulties in this regard. The Chinese government knows that USSR has helped Korea. Says that they have also helped Korea and have told Kim Il Sung that this is not an obstacle, that they will give them foodstuffs and clothing and everything they ask for, but that they cannot give weapons.

Stalin says that we can give Korea additional weapons. We will begrudge nothing to Korea.

Zhou Enlai repeats that they cannot yield to the Americans during the negotiations.

Stalin observes that if the Americans back down a little, then you can accept, assuming that negotiations will continue on questions still unresolved.

Zhou Enlai agrees, adding that if the Americans don't want peace, then we must be prepared to continue the war, even if it were to take another year.

Stalin affirms that this is correct. Zhou Enlai emphasizes the truth of comrade Stalin's observations, namely that this war is getting on America's nerves and that the USA is not ready for the world war. Adds that China, by playing the vanguard role in this war, is helping to stave off the war for 15-20 years, assuming that they will succeed in containing the American offensive in Korea. Then the USA will not be able to unleash a third world war at all.

Stalin says that this is true, but with one stipulation: Americans are not capable of waging a large-scale war at all, especially after the Korean war. All of their strength lies in air power and the atom bomb. Britain won't fight for America. America cannot defeat little Korea. One must be firm when dealing with America. The Chinese comrades must know that if America does not lose this war, then China will never recapture Taiwan. Americans are merchants.

wage a large-scale war. They are pinning their hopes on the atom bomb and air power. But one cannot win a war with that. One needs infantry, and they don't have much infantry; the infantry they do have is weak. They are fighting with little Korea, and already people are weeping in the USA. What will happen if they start a large-scale war? Then, perhaps, everyone will weep.

Zhou Enlai states that if America makes some sort of compromises, even if they are small, then they should accept. If America does not agree to return all POWs and proposes a smaller number, then they should accept the offer, under the condition that the question of the remaining POWs will be resolved under mediation by some neutral country, like India, or the remaining POWS transferred to this neutral country until the question is resolved.

Stalin asks how many American POWS there are.

Zhou Enlai explains that the overall number of POWs in North Korean and Chinese hands is 12,000, out of which 7,400 are South Koreans.

Stalin does not exclude such a resolution to the question, as proposed by Zhou Enlai. On his part, [he] proposes that they could announce to the Americans that if they are holding back a certain percentage of Korean and Chinese POWs, then North Korea and China will hold back the same percentage of South Korean and American POWS until a final solution to the POW question is agreed upon. This needs to be tried as a way agreed upon. This needs to be tried as a way of pressuring Americans by publicizing it in the press. If America rejects this offer, then it should be declared that they apparently want to send Chinese POWs to Jiang Jieshi. If these proposals are unsuccessful, then you can resort to mediation. The main thing here is to propose a ceasefire.

Zhou Enlai declares that, indeed, an armistice agreement also involves a cease

fire. On the POW question [he] enumerates three positions. First announce from the beginning that they will hold back the same percentage of South Korean and American POWs as the percentage of North Koreans and Chinese held back by America, and leave it at that. Second - resort to mediation by a neutral country. Third - sign an armistice agreement by putting off the POW question and resuming its discussion afterwards.

Then Zhou Enlai returned to the question of military assistance and put forth the Korean comrades' request for 10 anti-aircraft gun regiments. We told the Koreans that we don't have such capabilities, but that we would bring this up with the Soviet government.

Stalin. Kim Il Sung asked as for 5 regiments. We promised to send him these. Perhaps China will also give 5 regiments?

Zhou Enlai repeats that they do not have such capabilities and that this is new to them. Stalin says that this question needs to be cleared up with Kim Il Sung.

As for Zhou Enlai's request to send 10 regiments, irrespective of those promised earlier, comrade Stalin answers that it will have to be examined.

Zhou Enlai brings up the Korean comrades' request for advice on whether they should start bombing South Korea. They are not sure whether it's the right way to go.

Stalin explains that the air force belongs to the state and that Chinese volunteers should not use state planes.

Zhou Enlai informs that the Korean comrades have asked about launching a new offensive, to which the Chinese government replied that they cannot carry out a strategic offensive.

Stalin points out that when armistice negotiations are taking place, they should not be launching either strategic or tactical offensives. They shouldn't be launching any offensives.

Zhou Enlai asks, referring to Mao Zedong's question whether Kim Il Sung and [Chinese military commander] Peng Dehuai should be invited to Moscow.

Stalin. I would happily talk to them, but they are far away. Besides, we are not very comfortable with inviting them. If they were to bring up the question, then we would happily welcome them here.

Zhou Enlai informs that Peng Dehuai would very much like to come, though he is

unsure of what Kim Il Sung thinks. Perhaps Transcribed by it would be good to speak to them about this.

Stalin agrees.

Zhou Enlai repeats that the Chinese government believes that it is wise to continue the negotiations in Panmunjom. But China is preparing for the possibility of another 2-3 years of war. Again asks for assistance with aviation, artillery, and ammunition, as China cannot deal with these matters on its own.

Stalin announces that everything we can give you, we will.

Asks how is the Korean morale. Is there confusion?

Zhou Enlai explains that, indeed, there has been much destruction in Korea, especially after the bombing of the electric power station on the Yalu river. This has had an impact on Korean morale and on their efforts to accelerate the struggle to achieve peace.

Stalin says that the American strategy is fright. But they have not frightened China. Could it be said that they have also failed to frighten Korea?

Zhou Enlai affirms that one could essentially say that.

bad.

Stalin. If that is true, then it's not too

Zhou Enlai adds that Korea is wavering somewhat. They are in a slightly unsteady state. Among certain elements of the Korean leadership one can detect a state of panic, even.

Stalin reminds that he has been already informed of these feelings through Kim Il Sung's telegram to Mao Zedong.

Zhou Enlai confirms this.

PRC five year plan does not. In addition, it A.Vyshinskii [signature] is necessary to have the complete picture of N.Fedorenko [signature] all expenditures provided by the plan.

[Source: APRF, f. 45, op. 1, d. 329, II. 5472; translation by Danny Rozas.]

IV: Conversation between Stalin and Zhou Enlai, 3 September 1952

RECORD OF MEETING BETWEEN COMRADES I.V. STALIN AND ZHOU ENLAI

3 September 1952

Present:

on the Soviet side

comrs. Molotov, Malenkov, Bulganin, Beria, Mikoyan, Kaganovich, Vyshinskii, and Kumykin.

on the Chinese side comrs. Chen Yun, Li Fuchun, Zhang Wentian, and Su Yu

translated by

comrs. Fedorenko and Shi Zhe.

After an exchange of greetings the discussion began with the question of the five year plan of the People's Republic of China.

Stalin. We have familiarized ourselves with your five year plan for construction. You are setting the yearly growth at 20%. Is Asks how should the Chinese delega- not the setting of yearly industrial growth at tion proceed further. 20% strained, or does the 20% provide for some reserve margin?

Stalin proposes to start work immediately. Informs that Soviet Union has assigned a commission under the chairmanship of comrade Molotov and consisting of comrs. Bulganin, Mikoyan, Vyshinskii and Kumykin, and that the Chinese delegation can speak to Molotov about when to start work.

Zhou Enlai expresses thanks for the information and asks comrade Stalin to name the time when he can brief comrade Stalin on the internal situation in the PRC.

Stalin agrees to see Zhou Enlai as soon as he receives a finished version of the written report.

Zhou Enlai draws attention to the fact that they do not yet have sufficient experience in such planning. The experiences of the past three years has shown that the PRC is underestimating its capabilities. The feasibility of the plan will depend on the efforts of the Chinese people and on the assistance that China is counting on receiving from the USSR.

Stalin. We draft the five year plan with a reserve margin, as it is impossible to take into account every instance. There are various reasons that may affect the plan in one direction or another. We always include the civil and military industries in the plan. The

We must know how much is required from us on a paragraph by paragraph basis. It is necessary to do the calculations. The given documents do not contain such data. Hence we cannot give our final answer. We need at least two months in order to do the calculations and tell you what we can provide you.

Usually it takes us at least a year to prepare our five year plan. Then we analyze the prepared draft for another 2 months, and still we manage to let mistakes go by.

We would like you to give us some two months to study your plan, so that we could answer your questions.

How do things stand in other matters? It seems that the question of Port Arthur has been examined. In that case we need to make a decision. If there are any sort of objections then they should be discussed right now.

In addition, it seems that there are also no objections to the draft communiqué on the transfer of KChZhD.

The third question concerns hevea [rubber] trees. We would like to receive from you 15 to 20 thousand tons of caoutchouc [natural rubber] each year. You, it seems, object, citing difficulties. The fact is that we have a tremendous need for caoutchouc, since automobiles and trucks, which are also being sent to you, require large amounts of rubber. We would like to receive at least 1015 thousand tons of caoutchouc. We have not much opportunity to buy caoutchouc, since Britain keeps it to itself. We ask you to reexamine the question of purchasing for us the necessary amount of caoutchouc.

If all these questions get resolved, then the remaining can be decided with other delegation members, as it seems that Zhou Enlai is hastening to return.

Zhou Enlai says that it's difficult for him to remain here for two months, that he would like to return to China in mid-September. [Vice chairman of the Northeast (China) People's Government] Li Fuchun can remain here.

Stalin. Fine.

There still remains the question of constructing the new Ulan-Bator-Pinditsiuan railroad. The Mongolian Premier, who was just here in Moscow, has given his approval.

In other words, four questions remain to be decided by Zhou Enlai: Port Arthur,

KChZhD, caoutchouc, and the construction of the new Ulan-Bator-Pinditsiuan railroad.

Zhou Enlai referring to the hevea question, says that they will take all measures in order to provide USSR with 15-20 thousand tons a year, but they are apprehensive that the blockade and other measures directed against China by its enemies may prevent it from fulfilling this commitment in full. The delegation is apprehensive that this may be seen as a breach of its commitments to the Soviet Union.

[He] repeats that they will take all measures to fulfill this commitment, but would like to reserve the right to explain the reasons and not be held in breach of its commitments, if in extraordinary cases the shipment falls short of what was promised.

Stalin says that he understands this. We can soften the wording in the agreement, by saying that China will strive in every possible way to realize the shipments of the stated amount. But if it is unable to deliver caoutchouc in the amount stipulated, then we will have to decrease the number of trucks ordered.

Asks jokingly whether President Ho Chi Minh might not be able to help in this

matter.

Zhou Enlai notes that China has many options in this regard (mostly through contraband).

[He] returns to the question of the construction of the new railroad. Notes that here are no objections.

Stalin notes that they can make public announcements on Port Arthur and KChZhD, but not on hevea, and only make announcements on the Ulan-Bator-Pinditsiuan railroad once it has been completed.

Zhou Enlai expresses agreement with this and returns to the question of the five year plan. Again emphasizes that they are underestimating their capabilities. He agrees that it is difficult to perceive the five year plan as a general picture, as it does not include the military, since they are having difficulties with military planning. Overall, they are unsure whether to include the military in the general plan. As for publishing the five year plan, they were not intent on publishing the plan itself, only its general trends.

Stalin explains that our five year plans are published and that we include incognito articles dealing with military technology production, chemical and other industries.

The publication of the plans is essential, if the people are to comprehend the scope of development. There must be numbers. It is not advisable to limit oneself by publishing solely its general trends. There are people who want to know and behold the entire scope of development as specified in the five year plan. That's why it is necessary to provide for military production in this plan, though without naming military enterprises and such. It will be better thus. There must be a single, unitary plan that includes both civil and military development.

As far as the USSR is concerned, we, as the provider, must also know in what capacity and what type of assistance will be required of us. There is but one source - the USSR. But we need a reckoning for both the civil and military sectors. We must know and calculate every portion of the entire

sum.

Let's say that in 1953 we provide weapons for 10-15 divisions. We need to know how much steel and other materials will be needed to fulfill this order. During that same year 1953 we must supply a certain amount of equipment for the civil sector. This must also be calculated. Then both sums, the civilian and the military, must be combined to determine whether we will be able to supply the entire amount. This is how a plan must be drafted for each and every year. Perhaps our Chinese comrades believe that all these weapons are lying around somewhere in a warehouse. No, they must be produced.

Zhou Enlai completely agrees with everything laid out by comrade Stalin, and will ascertain how the matter of the [weapons shipments for] 60 divisions will rest. If they will be billed to credit, then that will also have to be specified.

Comr. Mao Zedong had an idea - if the war in Korea were to continue for another year or two, then would it be possible to extend the duration of shipments for 20 divisions to next year?

Stalin says that right now it's difficult to say. Perhaps it will have to be shortened, perhaps not. It needs to be calculated. The calculation will tell us. Nothing here can be determined beforehand.

Zhou Enlai turns to the question of naval-military shipments. Asks whether these need to be included in the plan or not. Roughly speaking these shipments need to be delivered over the next six years. Will the

previous arrangement remain in force?

Stalin. Everything which we have agreed to- military and naval-military shipments - will remain in force. But this must be taken into account when determining the total number of shipments. We are not repealing any loans nor rescinding any agreements. In general, we find it unconscionable to run from the responsibilities that one has taken upon himself. Once an agreement has been signed, it is imperative to abide by it, and we will abide by it.

Zhou Enlai says that comr. Mao Zedong has entrusted him to present the general outline of the five year plan and to ascertain how much will have to be ordered from the Soviet Union for the civilian and military industries. They project 7,700 mln. rubles for the civilian industry, and 4,500 mln. rubles for the military. Mao Zedong asked to ascertain if this is a suitable ratio, if the military portion is not too great.

Stalin. This is a very unbalanced ratio. Even during wartime we didn't have such high military expenses.

Zhou Enlai says that the 4,500 mln. rubles earmarked for military orders are composed of the following: weapons for 60 divisions 985 mln. rbls., military-naval shipments -2,126 mln. rbls., aviation - 1,200 mln. rbls., and others.

Emphasizes that under normal conditions the ratio between the military and civilian sectors is not so unbalanced. The military portion is smaller.

Stalin. During wartime our military production constituted about 40-45%, but China doesn't have a real war on its hands. However, shipments for the air and naval forces are necessary. Perhaps Mao Zedong is right about the ratio of 7.7 bln. rbls. to 4.5 bln.rbls.

Zhou Enlai informs that in 1950 expenses for the military constituted 44% of the entire budget (4.2 bln. rbls.), in 1951 52% (8 bln. rbls.), in 1952 - 27.9% (6.6 bln. rbls.). Says that, according to the five year plan, investments in the military industry (munitions arsenals, aviation, tank production, military shipbuilding) constitute 1213% of all industrial investments. If comrade Stalin believes that such a ratio is acceptable, then they will use that as the basis when drafting their general requisitions list. Stalin. Good. It is acceptable.

Zhou Enlai says that at first they projected constructing 151 industrial enterprises, but now they have dropped this number to

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