The Chargé in China (Atcheson) to the Secretary of State

No. 1397

Sir: I have the honor to transmit herewith a copy of an article appearing in the Daily Bulletin of the China Information Committee for June 24, 1943,27 summarizing an address made at a meeting of the China Social and Economic Reconstruction Association by Dr. Y. C. Koo, Acting Vice Minister of Finance and General Manager of the Farmer’s Bank.

Dr. Koo emphasizes the importance of rural industries in the reconstruction of China’s economy, pointing out that such industries would give both full-time and part-time employment in the over-crowded farming districts, increasing the prosperity of those districts and making unnecessary a movement of the rural population to the cities to seek work. Rural industrialization would also alleviate the transportation problem to some extent, if mills were planned with a view to using locally-available raw materials and selling in nearby markets. (A list showing the various provinces to which certain industries are suited is given in the article.)

Rural industrialization, according to Dr. Koo, would modernize the farm districts and improve farming methods by increasing production of farm implements, fertilizer, insecticides etc. and by making the farmers sufficiently prosperous to purchase these and other products. Hydroelectric power is to be made available by a Rural Hydraulic Power Company, which the Farmers Bank and the National Conservancy Commission are preparing to organize.

Some observers believe that there will be a movement of industry back to the former treaty ports and other large industrial centers after the war and that such suggestions as those advanced by Dr. Koo, meritorious though they seem, will be given inadequate attention. It may be noted, however, that in various districts of Free China which were not industrialized to any extent before the war, there are now a number of factories engaged in the production of a wide variety of goods. In Shensi, for example, a cotton and wheat-growing province, a number of cotton and flour mills have recently started production. Kweilin, in Kwangsi Province, has developed into a fairly important industrial center and several towns in Hunan are active industrially, despite the proximity of enemy forces. Szechuan Province has nearly half the factories in Free China, centered around Chungking and Chengtu, and Yunnan Province has a number of active industries.

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The Chinese Industrial Cooperatives has about 1600 member cooperatives, located in cities and villages all over Free China and producing a wide variety of goods. While some of these industries will undoubtedly be moved back to the port cities after the war, it is believed that most of them will remain and serve as a nucleus for a possible industrial decentralization program. The growth of village and farm industries will probably depend on the success of the Chinese Industrial Cooperatives, now undergoing a drastic reorganization.

Respectfully yours,

For the Chargé d’Affaires a. i.:
J. Bartlett Richards

Commercial Attaché
  1. Not reprinted.