The Chargé in China (Atcheson) to the Secretary of State
[Received March 20.]
Sir: I have the honor to transmit herewith a copy of an article16 which appeared in the Central News Agency bulletin of March 3, 1945 regarding an interview with Dr. Wong Wen-hao, Minister of Economic Affairs, on China’s postwar economic policy as expressed in a statement of general principles governing economic reconstruction issued by the Supreme National Defense Council, a copy of which was forwarded to the Department with the Embassy’s despatch no. 53, January 3, 1945.
Summary: Two of the principles adopted are of particular importance. The first delineates the field of government activity, making it the duty of the government to operate the post office, telecommunications, arsenals, mints, railway trunk lines and large hydraulic plants. While other industries are open to private capital, the government may undertake large enterprises, beyond the present capacity of private industry, such as oil fields, iron and steel mills and water transportation, either alone or jointly with native or foreign private capital. While the government will engage in industry only where it is necessary to do so, its policy will not be one of laissez-faire, for it will channelize private activities in order to place first things first, and to coordinate government and private activities.
The second principle of particular importance is the welcome accorded foreign capital. Extraterritoriality made it necessary to place certain limitations on foreign capital, such as the restriction of the proportion of foreign capital in an enterprise to 49 percent of the total, and the requirement that both the chairman of the board and general manager of a business should be Chinese. Under the new principles, all regulations which place the foreigner at a disadvantage [Page 1339] are abolished, with the exception that the chairman of the board of directors of a Sino-f oreign enterprise must be Chinese.
Industrialization will not only raise the standard of living of the people, but in doing so will facilitate the maintenance of peace and order. End of summary.
The reference to the abolition of limitations on foreign capital, in the penultimate paragraph above, should not be taken to mean that old laws have already been replaced by new statutes expressive of the principles adopted by the Defense Council. The Embassy understands that the problem of revision is being considered.
- Not printed.↩