Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-06-30

pensive and usually small in guam
tity-shows how badly the Reds
need such items. American officials
argue.
The Russians are permitted to
buy many items that Red China
can't buy. This is the so-called
China differential."
Last May 30, Britain announced
her intention to reduce the level
OF controls on trade with China to
the level Of the controls at present
applied to trade with the Soviet
bloc"
Reaction from key trading points
around the world takes this form
today:
Observation-Disclosures and indus
trialists are very cautious. None
would say publicly that Japan
should follow the British decision
Immediately. A trade agreement
signed in 1858 has not worked out
satisfactorily. Prime Minister
Kishi's recent visit to Washington
is expected to bring Japanese re-
taxation Of trade barriers-imposed
during the Korean war-sometime
next month.
HONG KONG-The British Crown
Colony formerly had a $156 million
annual trade with the Chinese Reds.
1t dwindled to $23 million last year
With Britain's relaxation of con-
trolls. the most optimistic traders
estimate a 20 per cent increase.
WEST GERMANY-The Bonn
government decided to follow the
British move. Last year, German
merchants sold $39 million worth
Of goods to Red China, imported
$56 million worth. mostly in eggs,
skins. fats and wool. Most of this
trade was on barter basis.
NDONESIA-An official spokes-
man said the government "wel-
comes Britain's move as part. of
the world drive for international
trade cooperation. Indonesia has
been shipping rubber and other raw
materials to China for over two
years. The volume is small, how
ever, only Ia per cent of the total
exports.
Trouble Expected
Two nations that have fought
the Chinese Reds-Korea and For
mosa-expect the British move to
lead to trouble.
The Chinese Nationalist believe
there will be incidents" between
their naval patrols and British
merchantmen.
A Korean government spokes-
man said the trade even in non
strategic" items to China will def
initely augment Communist war
potential, directly or indirectly"
In announcing their action, the
British pointed out that the Chinese
Communists could get around the
"differential" by having Russia or
some other Soviet bloc country buy
items that China can't buy.
That is one argument for apply
ing the same trade controls to
Peiping as are applied to the Soviet
bloc. Here are some others:
. That commercial intercourse
with the West may tend to draw
the Chinese Reds further away
from Russia.
. That the present control sys-
tenn may delay the Chinese five-
year plans for building industry,
but can't halt 1t entirely.
. That nations like Britain. ia
pan and West Germany are far
more dependent than the United
States on an export trade and must
find new markets.
And here are some arguments
American officials advance for con-
tinuing the "differential."
. That Peiping is tied to Moscow
both by id.ology and economics
about 80 per cent of China's trade
today is with the Soviet bloc) and
that these bonds are not likely to
be loosened merely by trade.
. That any change in relations
with the Reds will tend to throw
the IL million Chinese who live out
side metropolitan China mot in
Guiding those on Formosa) closer to
Peiping because it will be seen as
a step toward world recognition of
the Communist regime.
. That Red China's aggressive
designs in Asia have been held in
check. to large degree, by the fact
that her industrial base is not capa-
BILE Of supporting a long. large scale
war.
. That even though the Soviets
act as brokers" for China, buying
articles for them. trans-shipment
slows delivery Of the goods and
makes them far more expensive.
THE Associated PresO