893.50/335: Telegram

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

1728. Embassy’s 1607, August 31.29 Following are excerpts from (1) resolution on industrial reconstruction and (2) resolution on policy for encouraging foreign investments adopted by Eleventh Plenary Session of CEC September 11th as reported by Central News Agency:

1. [“]Industrial reconstruction shall be a planned one, mapped out by the Government according to the principles laid down in the San Min Chu I and Dr. Sun Yat-sen’s industrial program.

The Central Government shall formulate a comprehensive nationwide plan for the establishment of industrial areas which is to be based upon the requirements of the national economy, existing communication facilities and the location of natural resources.

In the post-war industrial reconstruction, the Government shall adopt the policy of emphasizing a simultaneous development of state and private industries which shall be operated on a division of labor [Page 866] and collaboration basis, under a complete industrial reconstruction plan, so that the production quota prescribed for various categories of industries may soon be reached.

Industries which may be entrusted to individuals, or industries which will be less suitable for the state to operate shall be privately operated. The Government in such cases shall give them encouragement and the protection of the law. Industries, the operation of which cannot be entrusted to individuals, or industries which assume the nature of monopoly, shall be state operated. The Government shall stipulate specifically what constitute state-owned industries, and what constitute private industries.

In order to increase international trade, export industries shall be given encouragement and support. Encouragement and commendation shall also be given to the people for the manufacture of goods for export as well as for the operation of export industries.

In order to speed up the completion of the industrial reconstruction plan, foreign capital and technical cooperation shall be welcomed.”

2. “All restrictions applying to Chinese-foreign joint enterprises shall be revised. Hereafter no fixed restriction shall be placed on the ration of foreign capital investment in joint enterprises. In the organization of a Chinese-foreign joint enterprise, although the chairman of the Board of Directors must be a Chinese the general manager need not necessarily be a Chinese. The foregoing terms of cooperation shall become effective after an agreement by the parties concerned has been reached and the approval of the Government secured. At the same time, aliens, in accordance with the provisions of Chinese laws and regulations, and having received the sanction of the Chinese Government, may invest in private enterprises in China. Negotiations for foreign loans for state enterprise shall be centralized. Private individuals’ may negotiate foreign loans for their enterprises and such loan agreements shall become effective following the approval of the Government. The Government shall determine at an early date which categories of state enterprises may accept foreign investment and which categories may seek foreign loans.”

  1. Not printed; see footnote 28, p. 864.