The Ambassador in China (Hurley) to the Secretary of State
[Received May 22—10 a.m.]
821. Following tentative outline of 5–year post-war plan for China’s cotton industry put forth by prominent members of cotton industry who informed Dawson29 that, although plan not yet coordinated with that of Central Planning Board or officially adopted, they believed major points thereof will be approved (ReEmbsdes 3185, Nov. 25, 194430):
- Increase number spindles to 7 million from maximum of 2 million expected to be recovered on liberation of occupied areas.
- Of 5 million spindles required it is hoped to obtain from U. S. 2½ million and possibly from England 500,000. It is hoped to obtain at least the former from U. S. within 3 years after war but absolutely necessary to set up priority at once.
- For remaining 2 million spindles it is hoped with cooperation of American and British interests to set up machine shops in China for their manufacture.
- Product of these spindles will be used as far as possible for export of cloth. One estimate is [by?] competent authority places yarn equivalent for this purpose at 3 million bales or half total output.
- For obtaining most of raw cotton required, it is proposed promptly to reestablish central cotton plantation improvement bureau and maintain branch offices in each of the different cotton producing provinces. It is aimed to increase production to 25 million shih piculs from pre-war average of about 11 million and high 1936 production of 16 million shih piculs. This cotton would compete more with Indian than American cotton but probably latter would be reduced to comparatively low figure following immediate post-war rehabilitation requirements. Policy in this regard not yet clear.
- In addition to above, acquisition of 100,000 new looms and improvement of 100,000 home weaving looms for farmers are envisaged.
Cotton acreage and production plans [in] free China this season will be reported later.