893.5034 Registration/12–1045: Telegram
The Chargé in China (Robertson) to the Secretary of State
[Received 1:42 p.m.]
2130. As reported Embtel 1940, November 8, Embassy on November 2 delivered to Foreign Affairs Ministry a note expressing the apprehension of Departments of State and Commerce and of American business with respect to certain provisions (especially of articles 7 and 292) of Revised Company Law. Embassy explained reasons for this apprehension and stated that a further statement of considered views of China–America Council was being sent air mail and if desired could be forwarded for consideration by interested officials. On November 20 Ministry acknowledged Embassy’s note stating that it had been brought to attention of competent authorities and expressing hope that views of China–America Council would be forwarded for reference purposes. This was done November 30 and in its note of transmittal Embassy reiterated attitude of American Govt and business regarding objectional provisions of articles 7 and 292 (ReDeptel 1853, November 16, 1 p.m., and 1932, December 4, 1 p.m.).
On December 3 Ken Lee, Commercial Counselor, Chinese Embassy, Washington, in conversation with Assistant Commercial Attaché referred to a recent discussion with Wong Wen-hao regarding articles 7 and 292 and stated he has expressed view to Wong that American companies if dissatisfied might establish their offices for China business in Hong Kong. He was not able to state however what decision of Chinese Govt, would be. As instructed Deptel 1932, Embassy will now make inquiry and representations at highest levels Chinese Govt, and promptly inform Dept. of results.
[Page 1254]Regarding questions raised in Deptel 1853, November 16, it was normal procedure for company law to be referred to Supreme National Defense Council for review prior to its promulgation by Executive Yuan. It appears doubtful, however, that criticism of law by other elements in Chinese Govt, as mentioned by Kan Nai-kuang would have stopped promulgation. Dr. Chang Chao-yuen, drafter of law, has privately stated that law would have been promulgated several weeks ago if it had not been for Embassy’s representations.
For background on article 305, see page 3 Embassy’s despatch 716, September 15.69 As written, language now reads that a foreign company which only occasionally transacts business in China and which has not been granted “authorization” may report certain particulars to appropriate governmental authorities, most important of which is a designation of agent in China to accept legal process. Present language clearly makes filing this report optional. Embassy doubts, however, that this was intent of legislators who probably meant to say “in view of registration such a company may report”, etc. Official clarification on this point was requested in Embassy’s note of November 30.
Clarification has also been requested on article 298. Embassy believes, however, that interpretation expressed in Deptel 1853, November 16 is correct.
Please inform Commerce.
- Not printed.↩