893.5034 Registration/11–845: Telegram
The Chargé in China (Robertson) to the Secretary of State
[Received November 8—3:35 a.m.]
1940. On November 2 we delivered to Ministry of Foreign Affairs a formal note expressing apprehension at effects upon trade and investment relation of certain aspects of Revised Company Law as approved by Legislative Yuan. Attention was directed particularly to requirement (articles 7 and 292) that to qualify for registration in China a foreign company must also have transacted business in country of its origin. In suggesting that elimination of this requirement would do much to clarify law and to facilitiate efforts to promote commerce and investment between China and United States, Embassy pointed out that definition of a foreign company in article 7 of Revised Company Law as approved by Legislative Yuan is at variance with definition approved June 18, 1945 by Supreme National Defense Council in its statement of principles governing revision of the company law. According to paragraph 15 in that statement as published in Ta Kung Pao, the term foreign company was to designate companies which have their head office located outside Chinese territory and which established branch offices in China for purpose of profit seeking. According to Dr. Kan Nai-kuang, formerly Assistant Secretary General of the Supreme National Defense Council and now Political Vice Minister for Foreign Affairs, view existed among certain elements in Chinese Govt, that company law as drafted is inconsistent with aforementioned statement of principles, and he stated to Chargé d’Affaires that law is being returned to Supreme National Defense Council for its consideration and approval prior to promulgation.
Points raised in Department’s telegram 1737, Oct. 25, 1781 and 1782, Nov. 2,64 are being taken up with appropriate officials. Reference [Page 1250] Part 7, Dept’s telegram 1737, Oct. 25, a responsible official of Ministry of Economic Affairs states that regulations governing the deposit of special reserve by industry and commercial enterprise during time of emergency April 14, 1941, were repealed on Oct. 7, 1945.
Pending review of law by Supreme National Defense Council, it would appear undesirable to make any public distribution of the mimeographed copies of certain sections of the Revised Company Law forwarded as enclosures65 to Embassy’s despatch No. 802, Oct 15 [17], 1945.
Please inform Commerce.