The Chargé in China (Atcheson) to the Secretary of State

No. 208

Sir: I have the honor to transmit herewith a copy of an article15 which appeared in the Central News Agency’s English Service, March 3, 1945, in regard to an interview with Mr. Kan Nai-kuang, Deputy Secretary General of the Supreme National Defense Council, regarding the question of postwar foreign investments in China.

Summary of article: Under the policy set forth in the statement; of principles (issued by the Supreme National Defense Council and transmitted with the Embassy’s despatch no. 53, January 3, 1945) there are four ways in which foreign capital may be employed in postwar China: (1) foreign loans may be made for the development of state monopolies including principal railways, large scale hydraulic plants and telecommunications; (2) foreign capital may participate [Page 1338] in joint enterprises with Chinese private or government capital; (3) foreign enterprises may be established, subject to Chinese laws; (4) foreigners may operate certain “special enterprises” with the permission of the government.

Fear that the competition of state enterprises would handicap private enterprises, either foreign or domestic, is unwarranted. Under a master five-year plan for reconstruction, many state enterprises would be concerned with the development of projects which private capital was unable or unwilling to undertake. Furthermore, in industries where there was both state and private operation, state enterprises would be organized as corporations subject to liquidation, and would not be entitled to unlimited subsidies from the Government. End of summary.

Respectfully yours,

George Atcheson, Jr.
  1. Not printed.