The Ambassador in China (Stuart) to the Secretary of State
[Received February 6—6:55 a.m.]
210. Following is text of article issued February 5 by official Central News Agency, Nanking, regarding creation of board for development of export trade:
“Dr. T. V. Soong, President of the Executive Yuan, announced today the establishment of a board for the development of the export trade. The board, which has been set up under the Supreme Economic Council, is to encourage the production and movement overseas of China’s export produce. During the long years of war much of this export production has been neglected. Purposeful action is therefore necessary to bring these ‘distressed areas’ into renewed production. The disruption of communications now means longer and more devious journeys which, at the prevailing very high cost of moving goods to the ports, adds greatly to their sale price. These longer journeys entail correspondingly longer periods of financing and, with market rates of interest at their present penal level, leads in a matter of months to a doubling of the delivered costs of export goods. Attention must also be given to improving qualities and to establishing recognized and acceptable standards for export produce. To the removal of these obstacles, to the production and shipment of China’s export produce the new board will devote its energies.
It is the belief of the Government that the long run interest of the export trade will be best fostered through mobilizing the resources and experience of individual producers and merchants. In setting up the new board, the Government has no intention of creating a monopoly. With this in view, the new board is inviting a number of experienced Chinese and foreign merchants to assist it in an advisory capacity. The board will not be conducting business operations.
The Government confidently expects that action along the above lines will materially reduce export costs. However, in order to give an immediate stimulus to the export trade, the Government announces the grant of a bonus of 100 percent of the f. o. b. value which will be paid through the appointed banks at the time export exchange is delivered. This bonus will apply to all cargo moving from China excepting [Page 1053] those originating from Manchuria and Taiwan where the internal currency values are already favorable to exports.
To provide the necessary funds an ad valorem surcharge of 50 percent is being imposed as from February 6, 1947, on selected categories of imports. Exemption from this surcharge is given to all the ‘capital goods’ in schedule I of the revised temporary foreign trade regulations of November 17, 1946,52 and to the following prime necessities in schedule II: rice, wheat and wheat flour, coal and coke, raw cotton, fertilizers and sulphate of ammonia. The goods so exempted amount to 60 percent of the total volume of imports.
Imports which have arrived on or before February 5, 1947 are exempted from this surcharge.”
Please repeat to Commerce, Treasury and Agriculture. Sent Dept as 210; repeated Shanghai as 116.