893.48/4–1247: Telegram

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

798. Embassy regards formal Chinese request for post-UNRRA assistance as primarily an effort to conserve its foreign exchange resources against diversion to essential but expendable imports (reEmbtel 777, April 10, repeated Shanghai 337). Government can ill afford internal costs of direct relief on any substantial scale. Department should therefore not anticipate any really wide relief distribution in China with either indigenous or imported supplies this year. China obviously needs to continue to import food however and Embassy would favor allocation of post-UNRRA relief funds to China. It does so fully realizing that there may be other claimant countries which can give assurance of accepting what Chinese Government cannot—namely, the creation, adequate financing with local currency and completion of a program of direct relief where it is really needed.

[Page 1304]
2.
Information and reports presently available, most of which have been already transmitted to the Department, do not indicate existence of potential famine areas (even in provinces mentioned specifically in Foreign Office note) if serious maldistribution of indigenous production can be avoided, and imports of food to meet part of coastal cities requirements could undoubtedly contribute to such avoidance. (ReDeptel 409, April 7, repeated Shanghai 572.) Yellow River is probably region requiring direct relief on large scale. Survey of this now being made after which report and conclusions will be filed.22
3.
Embassy suggests formal reply to Foreign Office note, receipt of which has merely been acknowledged with statement that substance thereof being transmitted to Department be considered along following lines, assuming U. S. Government contemplates including China among recipients of post-UNRRA relief: Advise that no decision will be made as to countries definitely eligible for post-UNRRA assistance from U. S. or to what extent until pending legislation has been acted upon and until Congressional conditions such aid have been fully clarified, at same time giving information with proper qualifications concerning general operating arrangements and conditions. Suggest meanwhile that Chinese Government should appoint representatives who can consult informally with appropriate Embassy officers. Purpose of such exploratory talks would be to develop tentative conditions which will be required by U. S. in new relief program, justification of Chinese needs for review by Department vis-à-vis other such applications being presented and other pertinent data.
4.
Embassy believes more useful recommendation can be made by it following conclusions procedure suggested paragraph 3 above. This will also permit maximum flexibility in negotiating with Chinese for important guarantee for other operating conditions in connection with this program without having to give even indirect assurances amounts which may be involved. There are indications here that Chinese are expecting determination of post-UNRRA assistance to be made early in May and apparently without presentation of further detailed information or advance discussion of other conditions. Further delay in exploratory talks may also lead Chinese to permit outstanding feed allocations to lapse without completing procurement arrangements.

Sent Washington 798, repeated Shanghai 352, April 12, 5 p.m.

Stuart
  1. Despatch No. 1122, April 23, from the Consul General at Shanghai, not printed.