893.50/11–1944: Telegram
The Chargé in China (Atcheson) to the Secretary of State
[Received 2:10 p.m.]
1864. 1. Embassy confidentially informed by responsible Chinese officials that Supreme National Defense Council, with Hoo[Ho?] presiding, November 6 approved statement of general principles governing postwar economic development and foreign participation therein. Foreign Office said preparing translation for Sino-English issuance near future (ReDeptel 1430, November 3 and ReEmbs 1499, September 4 and 1767, November 3).
2. Following are main provisions as described by Franklin Ho, Deputy Secretary General, Central Planning Board:
- (a)
- Government monopolization will be limited to arsenals, public [works?], mint, posts and telecommunications, important railways and important hydro-electric projects.
- (b)
- All other industries and public utilities will be open to private, domestic and foreign investment, without requirement of Chinese participation in foreign enterprises.
- (c)
- Chinese Government may elect to engage in industries regarded by it as essential, such as petroleum and steel production, but only through companies organized under Chinese company law and subject to same privileges and obligations, including taxation, as private concerns in same industries. When engaging in such industries, Government may accept foreign capital in partnership.
- (d)
- When foreign capital participates with Chinese Government or private capital in joint enterprises, proportion of foreign interest will not be subject to fixed limits. While Board chairman must be Chinese, managing director may be foreign.
- (e)
- Private concerns, before engaging in industries such as public utilities and petroleum deemed essential by Chinese Government, may be required to obtain franchise containing provisions respecting duration, charges, et cetera.
- (f)
- Government in case of any industry, may disapprove of particular locations proposed by a foreign concern, presumably to obtain desired geographical distribution of industry. There may also be limits on amount of investment permitted in any one industry relative to others in accordance with over-all plan for industrialization.
(May go beyond text of statement to include some interpretations by Dr. Ho.)
3. Ho predicts public statement, substance of which he says was telegraphed to Chinese delegates to International Business Conference in United States and which appears to have formed basis of public statements made by delegates November 15, will be issued here in 2 or 3 weeks. He says similar statements on general principles will be issued later on other subjects including specifically commercial policy and banking.