893.5034 Registration 1–845

The Secretary of State to the Ambassador in China ( Hurley )

No. 14

The Secretary of State refers to the Embassy’s telegram no. 1235 of July 18, 19443 in which it was suggested that advantage be taken of the presence of Dr. H. H. Kung4 in the United States to bring to his attention the views of American business interests and the dissatisfaction felt with regard to certain Chinese laws and regulations. This suggestion was conveyed informally to the several business organizations interested in China trade developments with the result that a joint memorandum entitled “American Approach to the Development of China–American Trade and Industry” has been presented to Dr. Kung by the National Foreign Trade Council and the [Page 1207] China–America Council of Commerce and Industry. A copy of the memorandum5 is enclosed under cover of a letter addressed to the Ambassador by W. Gibson Carey, Jr.,6 President, China–America Council of Commerce and Industry, Incorporated.

The memorandum sets forth some of the conditions which it is thought will permit the growth of trade and encourage the inflow of capital to China. The view is expressed that it would be much sounder to look to private venture capital for financing China’s reconstruction and development program than to rely largely or wholly upon intergovernmental loans; that consequently as large an area of operation as possible should be reserved for private enterprise, the development of mineral resources, transportation, communications and utilities being mentioned in this connection. In the interest of encouraging the flow of American capital to China, it is urged that American banks should be permitted to operate as freely as possible; that Chinese laws and regulations with regard to corporations should be simplified, particularly in the matter of registration of firms; and that comprehensive legislation on the subject of patents and copyrights should be adopted in line with progress already made in the field of trademark legislation. The memorandum further suggests that the basis for taxation of foreign enterprise should be more clearly defined by domestic laws; that tariffs and other trade barriers should be reduced as much as possible; and that China should join with other nations in support of the objectives of Article VII of the Mutual Aid Agreement.7

In general the memorandum represents a serious effort on the part of responsible committees to present a carefully thought out resume of American business thinking on the future of Sino-American trade relations.

It will be noted that Mr. Carey states in his letter that it is anticipated the memorandum will serve as background for conversations which the China–America Council is conducting with Chinese leaders in the fields of Finance and Investment, Heavy and Light Industry, Imports and Exports, Transportation, Telecommunications and Public Utilities, Policy-making and Legal Problems. Through these discussions, which are of an informal and exploratory nature, the China–America Council confidently expects to develop constructive measures for the advancement of American and Chinese business.

  1. Foreign Relations, 1944. vol. vi, p. 994.
  2. Vice-President of the Chinese Executive Yuan.
  3. Not printed; Embassy’s despatch No. 305, April 17 (611.9331/4–1745), states that copies of the memorandum were transmitted to the Chinese Minister for Foreign Affairs (Soong) and other key Chinese officials.
  4. Not found attached in Department files.
  5. The Mutual Aid Agreement with China was signed at Washington, June 2, 1942, Department of State Executive Agreement Series No. 251, or 56 Stat. (pt. 2) 1494.