811.516 Export Import Bank/10–947: Telegram
The Consul General at Shanghai (Davis) to the Secretary of State
[Received 10:44 p.m.]
2397. For Export-Import Bank. Concerning exports cotton products from China reDeptel 1354, August 1249 and ConGentel 2060, August 26. Production of cotton yarn in China August 1, 1947–July 31, 1948 estimated at 1,500,000 bales excluding home industry. Chinese sources calculate about 700,000 bales yarn will be converted in organized textile mills into piece goods roughly totalling about billion yards. Present plan calls for export of 469,000,000 yards and [Page 1197] about 30,000 bales twenties yarn during calendar year 1948. Approximate value these exports U. S. dollars calculated at 125,000,000. Prospective markets for piece goods are Manila, Siam, Malaya, Near East and Persian Gulf areas and Dutch East Indies. Because of anticipated delays getting program started some Chinese authorities believe exports for first year will total only 244,000,000 yards and 30,000 bales yarn. Anticipated yardage sales on this basis are divided as follows: Manila 35,000,000, Siam 35,000,000, Malaya 35,000,000, Near East 88,000,000, Dutch East Indies 51,000,000. Prospective pattern of distribution of yarn not settled.
This office not in position definitely assess whether designated market would purchase such quantities of Chinese cotton products although it appears reasonable in view continued worldwide shortage piece goods. Believed, however, quantity exports not possible unless Government continues allow raw cotton import for conversion into products for export to be paid for on basis official mean exchange rate CNC dollars 12,000 to U. S. dollar 1.
Full details of export program not clear. Information reported this message based on proposal made by China Textile Industries, Incorporated,50 to Governor Central Bank neither acted upon by textile stabilization board nor accepted by private mill owners.
Inform Commerce and Agriculture.
Sent Department, Nanking 1661.