803.6363/11–2145
The Chargé in China (Robertson) to the
Secretary of State
No. 880
Chungking, November 21,
1945.
[Received December 11.]
Sir: I have the honor to attach hereto for the
Department’s information, copies of the outlines of discussions47 held recently between Dr. Chin Fen, Vice Minister for Economic
Affairs for the National Government of China and Chairman of the National
Control Commission of Liquid Fuels, and the several representatives of the
American and British oil companies established in China, concerning the
importation of petroleum products into China and the subsequent marketing of
same.
It is of particular interest to note the Chinese Government’s expressed
desire that the foreign oil companies resume business and rehabilitate their
facilities in China. As for rehabilitation, however, I feel that these
companies will hesitate to invest the large sums necessary to restore their
properties to pre-war condition until they have some fairly definite
assurance that the Chinese Government has no early intention of buying and
setting up refineries for handling imported crude oil.
There is also attached a copy of the memorandum48 prepared and submitted by the
Standard-Vacuum Oil Company at Dr. Chin Fen’s request, outlining the
disadvantages to China of erecting her own refineries so to process imported
crude petroleum.
I believe that the Department of Commerce will be much interested in the
regulations under which the established oil companies are at
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present distributing petroleum products
released to them by the United States Armed Forces, as set forth in the
account of the meeting held November 13, and also in the “provisional
Regulations Governing the Import of Oil Products” as translated by The Shell
Company of China, Ltd. I suggest that this material be made available to
that Department. Incidentally, substantial orders are being booked for
importation early in 1946.
Respectfully yours,
[Enclosure]
Memorandum by Representatives of American and British
Oil Companies in China
[Extract]
[Chungking,] November 15, 1945.
. . . . . . . . . . . . . .
Aims arid Policies of Chinese Government Respecting
Oil for the Short-Range Post-War Period:
Dr. Chin Feng had carefully prepared agenda for this meeting and, at the
outset, read the following as representing the aims and policies of the
Chinese Government with respect to oil for the short-range post-war
period:
- 1.
- China is very badly in need of supplies of petroleum products
and will welcome imports into China by the foreign oil
companies;
- 2.
- The Chinese Government is going to adopt a policy for the
protection of indigenous fuels as these involve alcohol
production (largely centered in Szechuan Province) and the
development of China’s crude petroleum resources in the Kansu
and other fields. (Dr. Chin Feng made it clear that later on it
may prove more economic and beneficial for China to utilize
molasses, now forming the basis for alcohol distillation, for
sugar requirements. In this event, alcohol production will be
discontinued.);
- 3.
- The Chinese Government desires the foreign oil companies to
rehabilitate their installations and distributing facilities in
China on pre-war scales and the Chinese Government will assist
the companies in such rehabilitation. The Chinese Government
will try its best to solve satisfactorily the inland shipping
problems, as these apply to the transportation of oil products
and to the benefit of the oil companies. For the present and
pending rehabilitation of the foreign oil companies’ terminal
and bulk storage facilities and a restoration of normal
transportation facilities within China, the Chinese Government
desires imports of oils into China to be in drums;
- 4.
- The Chinese Government finds it necessary to conserve its
foreign exchange. The Chinese Government wishes the foreign oil
companies to import as much oil as possible into China and the
Chinese Government will try its best to provide foreign exchange
for such imports;
- 5.
- It is essential that the Chinese Government maintain certain
controls over distribution of imported petroleum products in
China but will amend the wartime regulations on this matter to
as simple a basis as possible.
. . . . . . . . . . . . . .
