893.5034 Registration/1–1546: Telegram

The Counselor of Embassy in China (Smyth) to the Secretary of State

107. Decision was reached by Supreme National Defense Council [on January 14] to delete from articles 7 and 292 of revised company law any requirement that foreign companies must transact business in country of origin in order to qualify for registration in China (ReEmtel 94, January 13, 9 a.m.). We are also informed by Dr. Wang Chung-hui that only procedural action in Legislative Yuan remains prior to promulgation of law in 2 or 3 weeks. He states all other articles will stand as originally approved in Legislative Yuan.

This is reported confidentially for the Dept and for Commerce, and it is requested that no public announcement be made prior to promulgation of law. Also requested is the assistance of the Foreign Trade Council and the China America Council in withholding publicity about pending revision of law as face-saving gesture during next few weeks. Dr. Wang stated yesterday’s decision was reached only after extended and even heated discussion, and he expressed hope that public airing of these differences might be avoided.

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