The Ambassador in China (Gauss) to the Secretary of State
[Received August 14.]
Sir: With reference to the Department’s telegram no. 905 of July 3, 1 p.m. and my message, no. 1235 of July 18, 10 a.m., in regard to the registration of American firms in China, I have the honor to enclose memorandum of my conversation on July 13th, with Dr. Wong Wen-hao, Minister of Economic Affairs.
In this connection, I also refer to my despatch no. 2752 of July 8, 1944, enclosing an English translation of a memorandum25 from the Ministry of Economic Affairs in reply to the questions raised by the National Foreign Trade Council in their memorandum26 transmitted to the Embassy by the Department’s no. 628 of May 3, 1944.26
By way of additional clarification of several of the questions raised by the National Foreign Trade Council, I should point out that there are in China some municipalities located in the provinces which are, however, not under provincial control. For example, Chungking is a special municipality depending from the National Government and not from the Szechuan provincial government. In the same way, Shanghai was a special municipality under the National Government, in no way responsible to the Kiangsu provincial government. A foreign firm locating in Chungking would apply for registration through the Bureau of Social Affairs of the Chungking Municipality, while a foreign firm locating in Chengtu would apply through the provincial Bureau of Reconstruction. For practical purposes, special municipalities should be considered as areas separate and apart from the provinces in which they are located.
Another point which it is believed has been cleared up is the reference to “registration” and “licensing”. Under Chinese laws—such as the banking and insurance laws—it is required that companies engaging in special lines of business must be specially licensed so to do. Therefore, if a foreign company, for example, wished to engage in certain insurance business for which under Chinese law a special license would be required, that Company would need not only to obtain registration but also a license.
In my telegram of July 18, 10 a.m., I suggested to the Department that it would be helpful to the Embassy if information might be supplied showing the legal requirements for “registration” of foreign firms in the United States—requirements which may differ with the various State laws; and also the legal requirements of other foreign [Page 996]countries in reference to the “registration” of foreign firms and companies. This information would probably be useful in our conversations with the Ministry of Economic Affairs to persuade that Ministry that the Chinese registration requirements are onerous and unreasonable.
As to British firms, our inquiry develops the information that several British firms at Chungking are discussing the registration requirements with the Bureau of Social Affairs of the Chungking Municipal Government, and that they, like the American firms, find the requirements vague and unsatisfactory, and desire an extension of time for registration. The Commercial Counselor of the British Embassy informed an officer of this Embassy who inquired, that all British firms in Chungking are endeavoring to register, that they have made numerous calls on the head of the Bureau of Social Affairs of the Chungking Municipality, and that they have experienced the same difficulties as the American firms and also desire an extension of time. The Commercial Counselor, when informed that Dr. Wong Wen-hao had intimated to me that the period for registration would be extended until the end of this year, commented that this action confirmed his opinion that the Chinese authorities are in no hurry to have foreigners register branches of their firms in China. The Financial Counselor of the British Embassy in casual conversation with me some days ago said that he thought that if the Chinese Government could be persuaded to permit the registration of a firm with one National Government ministry, in this case, the Ministry of Economic Affairs, for one registration fee, such registration to be effective for all branches in the country, British firms would register.
Apparently the British Embassy has not been particularly active in regard to the matter of registration; and there has been a suggestion in some quarters that the British prefer to have the Americans “carry the ball” in the discussions with the Chinese on the registration requirements.
If the National Foreign Trade Councilor any other organization has further questions to put to the Ministry of Economic Affairs in connection with the registration requirements, the Embassy will, of course, be glad to transmit them and to translate and forward the replies.
I have noticed in the press that Dr. H. H. Kung, Vice President of the Executive Yuan and Minister of Finance, in his public statements and addresses in the United States, where he is now attending the Monetary and Financial Conference, has been rather generous in his assurances that American business interests will be welcome in post-war China. It might be desirable that some of those interests [Page 997]take occasion during Dr. Kung’s visit to let him know of their dissatisfaction with the official National Government attitude toward foreign business interests in China in the matter of vague and impractical regulations and reports of proposed extensive restrictions which will discourage rather than encourage American interests in the China field.