893.50/354
The Ambassador in China (Gauss) to the Secretary of State
[Received November 6.]
Sir: I have the honor to refer to the Embassy’s despatch no. 1595, September 18, 1943, on the subject of the Chinese official policy on foreign investments as expressed in a resolution approved by the Central Executive Committee of the Kuomintang, and to transmit herewith a copy of an editorial from the National Herald,44 a Chungking English language newspaper published under the auspices of the Foreign Office, commenting on the resolution.
Summary of editorial: China should not place too much reliance on foreign capital in its economic reconstruction program. The United States, Great Britain and Russia are spending enormous sums in the prosecution of the war. Russia is unlikely to be willing to export capital after the war, Great Britain has mortgaged her future and the United States will be faced with a tremendous problem of rehabilitation at home and in Europe as well as in the Far East. Such capital as is available for China will have to be carefully guided into the most useful channels. Most of it will probably be invested in state enterprises rather than in private companies. Foreign capital will undoubtedly seek investment in China and will be welcomed, but the greater emphasis should be laid on the investment of foreign brains and technical knowledge. End of summary.
The National Herald editorial expresses a point of view more realistic than that of most commentators on China’s industrial reconstruction program, who commonly assume that there will be an unlimited flow of capital from the United States. The Minister of Economic Affairs, in a private conversation with an officer of the Embassy some two months ago, expressed the opinion that China would have to [Page 876] provide at least half the cost of reconstruction, but he was not prepared to say how much that would be.
Respectfully yours,
- Not reprinted.↩