893.00 Manchuria/1–2046: Telegram

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

136. Last evening Vice Minister [for] Foreign Affairs Liu Chieh invited me to Foreign Office and, saying that Foreign Office wished to keep State Dept. currently informed of situation in Manchuria, gave me orally following information:

1.
It now appears that Soviet forces will not be able to complete their withdrawal from Manchuria by February first, date agreed upon previously.1 Soviet authorities gave limited transportation facilities as reason. Chinese authorities feel that, if that is the case, the delay should not be more than a few days and therefore see no necessity for any further formal extension of date. (Sent to Dept. as 136, repeated to Moscow as 17.)
2.
Soviet Govt, has maintained that Japanese industries in Manchuria constitute war booty. In some cases where they have not taken away equipment, they have offered joint operation with Chinese. Chinese Govt, is not opposed to some form of economic cooperation with Soviet Govt., but cannot agree to the view that Japanese industries in Manchuria should be considered as war booty for Soviets. Any arrangement for joint enterprise in industrial field cannot be agreed upon until after withdrawal of Soviet troops from Manchuria and reestablishment of Chinese administration in Manchuria. Negotiations on this question are taking place between Chinese and Soviet officials in Changchun, but no agreement has yet been reached. This deadlock has added some difficulty to task of taking over administration of Manchuria.

Smyth
  1. For correspondence on this subject, see vol. ix, pp. 712 ff.