893.50/12–844: Telegram
The Chargé in China (Atcheson) to the Secretary of State 64
[Received December 8—11:45 a.m.]
1974. 1. Postwar industrial development be organized with participation of both state and private interests.
2. All economic enterprises, whether state or private, should be coordinated under general economic plan.
3. Number and kinds of state enterprises should be limited and clearly defined rather than extensive and general in nature, and these strictly state enterprises should include postal and telecommunications, important national railways, large hydroelectric power plants, arsenals and mints, and such public works as harbor construction, irrigation, and conservancy works.
4. All other enterprises not strictly within the category of state enterprises [shall] be open to private undertaking, ownership and operation. Complete break was made with past theories of rigid spheres of interest for state and private capital.
5. Large enterprises, though not included in category of state concerns, may still be undertaken by the Government or may be operated jointly by the state and private interests. Such large enterprises are, for example, petroleum production, iron [and] steel production, air lines, et cetera.
6. All enterprises operated jointly by state and private interests should be organized in form of public corporations or companies.
7. Government-operated enterprises other than those considered strictly state enterprises, whether owned and operated solely by the Government agencies or jointly with private and/or foreign capital, should be treated, as far as their interests and obligations are concerned, on strictly equal basis vis-à-vis private enterprises of same category. This means that such enterprises should not be given special privileges in respect of freight rates, discounts and allowances or state subventions by Government agencies, as against private enterprises.
[Page 1093]8. All privately owned and operated industrial enterprises should conform to the terms of the general economic plan in respect to: location, plant capacity, kinds and quality of products, issues of debentures and shares must be reported and approved, et cetera.
9. All those private industrial enterprises which conform to general economics plan should be entitled to receive state aid in the form of technological assistance, and transport facilities.
10. There should be no restriction on the percentage of foreign capital in joint enterprises which are open to Chinese private capital, but chairman of the board of directors must be Chinese national.
11. All approved enterprises, whether state or private-owned, or both, may negotiate for finance from foreign sources through or with approval of competent Government authorities.
12. Foreign nationals, in accordance with Chinese laws, may directly invest in enterprises operated solely by them; and that for certain special enterprises which would require special authorization for their establishment and operation, special charters may be granted to foreigners upon application and approval by Government.
13. All Government officials whose duties are concerned with control and supervision of industry or enterprises are forbidden to participate directly in ownership and operation such enterprises for personal profit.
- In telegram No. 1975, December 8, 9 a.m., the Chargé explained that telegram No. 1974 contained excerpts of speech by Sun Fo before the Rotary Club on November 30.↩