The Chinese Embassy to the Department of State42

Translation of the Statement of General Chang Chun, President of the Executive Yuan of the Republic of China, Which Is Scheduled To Be Released for Publication in Nanking on Wednesday, January 28, 1948, at 4:00 p.m.

“As a result of her suffering and losses during more than eight years of war and the subsequent Communist rebellion, China is now [Page 463] facing unprecedented economic difficulties. In order to overcome these difficulties, the Chinese Government, in the light of the long history of Chinese-American friendship, has requested economic and technical assistance from the United States. It was with gratification that the Chinese Government noted the inclusion of China in the interim aid bill and the announced intention of the United States Government to take early action during the present session of the Congress to provide substantial aid for China. The Chinese Government fully recognizes that in order to secure the maximum benefit from external aid an adequate and practicable program of domestic measures of self-help is needed. This program should at the beginning lay stress on financial and economic measures of immediate importance which will be followed or accompanied by certain other reforms in the fields of general administration and military reorganization.

The main financial and economic reform measures which the Chinese Government intends to undertake are:

Control and readjustment of government expenditures both in Chinese national currency and foreign currencies so as to realize all practicable economies.
Improvement of the national, provincial and local tax systems and the administration thereof with the dual object of increasing the yield and placing the tax burden upon economic groups that are best able to pay.
With a view to insuring greater efficiency in the performance of their duties, the treatment of civil servants as well as officers and men will be gradually raised. Simultaneously, a program will be enforced for the gradual reduction of government personnel.
Strengthening and extension of control over the supply of essential commodities of daily necessity with a view to checking speculation and the abnormal rise of prices.
In order to insure the maximum effectiveness of external aid, every effort will be made toward laying the basis for a more stable monetary system.
Banking and credit systems to be reformed through the centralization of control in the Central Bank of China and the maintenance of a counter-inflationary policy.
Promotion of exports through removal of obstacles to export movements.
Improvement of import control, but as soon as conditions permit the emergency control measures shall be modified.
Improvement of agricultural production and rural conditions and land reforms through the adoption of such recommendations of the China–United States Agricultural Mission43 as are suitable for early introduction.
Rehabilitation of communications and essential industries as far as conditions permit in order to increase production and reduce dependence upon abnormal imports.”44

  1. Handed to the Deputy Director of the Office of Far Eastern Affairs (Penfield) by the Chinese Minister (Tan).
  2. For correspondence on this subject, see Foreign Relations, 1946, vol. x, pp. 1268 ff.
  3. In a memorandum of January 30 (893.50/1–3048), Mr. Butterworth informed the Secretary of State that he had indicated to Mr. Kan Lee the Department’s interest in the specific measures through which the Chinese Government intended to implement the Premier’s statement. Thereafter, Mr. Pei informally submitted to the Department 10 reports each of which elaborated on one of the reform measures promised in the statement. These reports were forwarded to Mr. Butterworth by Mr. Ringwalt with his memorandum of February 17 (893.50–Recovery/2–1748).