The Secretary of State to the Ambassador in China (Gauss)
The Secretary of State refers to instruction no. 628 of May 3, 1944,29 in regard to the question of registration of American firms under Chinese laws and regulations.
There is transmitted a further memorandum received from the National Foreign Trade Council on this subject.29 It will be noted that the Council has been in contact with all American companies known to be doing business in free China; that none of these companies objects to registration with the Chinese authorities provided that the regulations are reasonable under the circumstances and that the companies are able to understand the requirements. It will be observed that the Council makes a strong plea for the simplification of existing registration regulations so as to permit a single registration with the Central Government, rather than multiple registrations with various provincial and municipal governments as seems to be contemplated by the existing regulations. It is pointed out in the Council’s memorandum that inasmuch as the Chinese system of government and administration [Page 1001]vests in the Central Government full control and authority over such matters as the registration of companies throughout the provinces and territories under its jurisdiction, there appears to be no impediment in the Chinese system of administration to a single registration with the Central Government which would be valid throughout China. The Council also expresses preference for the extension of such a procedure to the payment of fees required for registration.
The memorandum also calls attention to Article V of the Registration Regulations, which prescribes that the registration of branch establishments shall not be allowed until a license has been issued by the Ministry of Industry to such branch. The question is raised whether or not this provision is in conflict with Article V of the Treaty for the Relinquishment of Extraterritorial Rights concluded between the United States and China on January 11, 1943,30 which provides in effect that nationals of the United States shall have the right to carry on trade in China. The Council feels that under the Registration Regulation cited above the Ministry of Industry might arbitrarily prohibit the establishment of branches by American companies simply by refusing to grant a license. In this connection, it is pointed out that in the United States the State official in charge of the registration of foreign companies has no authority to withhold the granting of registration and that he must register an applicant company provided it has complied with the laws governing the registration of foreign corporations. In conclusion, the Council, on behalf of American business concerns which are doing or intend hereafter to do business in China, requests that the Department use its good offices to arrange with the Chinese Government that American concerns shall not be required to register in China until such time as the Registration Regulations have been simplified and clarified.
In reply, the Department has informed the National Foreign Trade Council and also the China–America Council of Commerce and Industry of the efforts being made by the Embassy to induce the Chinese authorities to grant a further extension of time and to clarify and simplify the procedure for registration. The Embassy will no doubt find the comments set forth in this further memorandum from the National Foreign Trade Council of value in connection with the representations being made to the Chinese authorities regarding this matter, which the Department hopes will result in the adoption by the Chinese Government of a clear and simple procedure under which American companies may effect registration.