The Ambassador in China (Stuart) to the Secretary of State
[Received July 30—3:10 a.m.]
1387. At July 29 press conference Director Chinese Government Information Office31 replied to questions by correspondents re new measures announced July 28 on relaxation Government control over privately-owned foreign exchange assets by means written statement briefed as follows:
Main object new regulations step-up production in China and utilize idle capital. Also to encourage interest of overseas Chinese in industrial development at home. During period when foreign exchange under control, adequate supplies for maintenance our industries persistent problem. Regulations have following principal objectives: (1) To promote productive enterprises actually needed in China by facilitating importation machinery and other equipment now unobtainable this country; (2) to meet requirements for raw materials of existing productive enterprises by permitting use of foreign funds of Chinese nationals for purchase commodities. This to be accomplished [by] (a) stabilization of value of money invested in such productive enterprises and (b) supplementing present requirements of productive enterprises through importation of materials and commodities required; (3) to halt import of highly profitable luxuries which have hitherto been brought in by unscrupulous traders under pretense of being funds of overseas Chinese.[Page 377]
Now program devised meet actual present needs. Import procedures simple as possible order assure maximum results. Authorities concerned will extend every possible facility to applicant importers. New undertaking designed supplement American aid program; essentially a self-help program. American aid to China, while generously large, is, of course, insufficient to meet all China’s economic needs. China deeply grateful for what US doing but acutely conscious of her duty to utilize all available Chinese resources in present economic situation. Hence expressly hoped new policy will induce sizeable investments of foreign funds of Chinese nationals in productive enterprises in China.
Full texts of new measures and comment being sent Department by Consulate General Shanghai.32
Department please refer to ECA.
Sent Department 1387; repeated Shanghai 668.