893.50/7–3047: Telegram

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

1615. Executive Yuan July 29 approved statement aimed to clarify Chinese Government’s industrial and financial policies along lines requested in Embassy’s February 19 aide-mémoire (Department’s telegrams 178, February 13, 6 p.m., and 801, June 30, 5 p.m., Embassy’s despatch 516, February 24 and Embassy’s telegram 1481, July 8, 2 p.m.14).

Statement to be taken up August 1 by State Council which expected to approve without much, if any, change. Embassy promised copy immediately after approval by State Council and will telegraph complete translation.

While Chinese officials refused to divulge contents of statement, they indicated that statement would very likely be considered favorable to private, including foreign, enterprise and that provisions contained which would restrict Government participation in industry to arsenals, large hydro plants, naval shipyards, large iron and steel mills and other enterprises for which appreciable amounts of capital required and which not ordinarily attractive to private investors. Statement also reliably said to include provision for remittance of profits abroad by foreign enterprises, such remittances to be permitted on restricted basis during present emergency but to be permitted on more liberal basis as soon as conditions permit.

Sent Department 1616 [1615]; repeated Shanghai 657, Tientsin 107.

  1. Despatch No. 516 and telegram No. 1481 not printed.