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The Secretary of State to the Consul General at Shanghai (Davis)

1230. Reurtel 1692 July 13. ConGen comments to Li appear cover significant general considerations. Dept not clear, however, whether [Page 1373] Chinese Gov intends dispose all properties China Textile Industries, Inc. to private Chinese and foreign investors, or whether some plants or portion ownership thereof to be retained by govt. Regardless which alternative followed, but particularly in case latter procedure adopted, additional point of concern to prospective Amer. investors would be assurance Chinese-owned mills would not receive preferential treatment with respect such matters as taxation and import-exchange controls.