893.24/11–2445: Telegram
The Consul General at Shanghai (Josselyn) to the Secretary of State
[Received December 13—10:25 a.m.]
260. Reourtel [Embassy’s] 1806, October 17, 8 a.m.79 and subsequent communications: by [my?] estimate of import requirements for consumption raw cotton this season ending August remains little changed at about 600,000 bales of 500 pounds net. The above estimate is based upon reasonably conservative assumptions, and information as to power available for the Shanghai mills, restricted labor supply and reduced prospects for obtaining domestic cotton. At present only about 150,000 spindles are in operation owing to lack of cotton.
Rehabilitation of the textile industry at Shanghai has been progressing at a slower rate than expected earlier in the season owing to organizational difficulties and power shortage but domestic supplies available for mills are very small so that foreign cotton is now much needed and is becoming an actual limiting factor in resumption of potential mill activity. It is, therefore, urgent that raw cotton imports move in active volume soon.
Latest figures indicate Shanghai spindles total 2,301,906, including 1,307,276 in Chinese mills and 967,972 in former Japanese mills, 41 small mills spinning up include 26,658 spindles. Present prospects indicate operation of about 500,000 of these spindles by the close of the year and an equal number of the Chinese-owned spindles all on one shift progressing to two shifts as fast as possible depending chiefly on available raw material. Progressively through the season another million may be brought into operation and also half million in other parts of liberated North China depending chiefly on political developments and available cotton.
[Page 1185]The cotton crop in the three lower provinces of Central China is estimated at over 1,300,000 piculs or 40% of average owing to small acreage. About half of this is normally available mills but much is now cut off. An endeavor is being made to procure 100,000 piculs from Hankow area. Information on available raw cotton for the mills of North China indicates a maximum of 500,000 piculs. My present estimate for the present total cotton crop in China exclusive of Manchuria is raised slightly to 6,800,000 shih piculs compared with 6,400,000 for 1944. Of this probably not more than 2,000,000 piculs will be available for modern spinning mills this season, the remainder going to home spinning and stocks. Present Shanghai stocks are estimated at not more than 20,000 bales of raw cotton and in North China centers approximately an equal amount. Yarn stocks in Shanghai are very small. Foreign cotton shipped or contracted for including UNKKA cotton about 60,000 bales.
Cost of imported seven-eighths middling American cotton to China at present is about 45,000 CNC per shih picul while domestic cotton for 32 counts costs about 100,000 CNC. Profits on yarn for the latter are nearly 75% which is indication of the potent demand for foreign cotton.
With number of spindles in China expected available for operation next season in China excluding Manchuria raw cotton requirements expected approach 1,900,000 bales of which only approximately one-half might be available from domestic supplies according to the present prospects. Therefore demand for imported cotton expected to be even larger next season.
Sent to Department, repeated to Chungking.
- Not printed.↩