893.50 Recovery/6–2348: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received June 23—8:06 a.m.]
1128. For Department and ECA. In further conversation with Foreign Office re bilateral, it was informally indicated that US draft article VIII (Deptel 900, June 19, 10 a.m.) would be acceptable to Chinese. Text had been communicated to Foreign Office by aide-mémoire June 21.
Tung Ling of Foreign Office unmistakably speaking for Foreign Minister reiterated political impossibility of Government accepting article V, subparagraph b. Department is aware of state Chinese public opinion re Japan in any aspect. If, as Embassy understands, MFN treatment for Japan and southern Korea is not specifically required [Page 558] by text Economic Cooperation Act, Embassy strongly recommends deletion this subparagraph.
Tung also re-expressed hope article III could be covered by expansion of article II, subparagraph d, but Chinese resistance on this point Embassy believes can be overcome.
Embassy informed that at prolonged Executive Yuan session June 22, decision was unanimously taken to treat bilateral as in nature of a US executive agreement. Legislative Yuan is being asked to pass resolution thanking US Government for aid and authorizing Executive Yuan to negotiate necessary agreements within scope of China Aid Act. When concluded, Legislative Yuan would be informed of terms of agreement but according to plan prior ratification by Legislativa Yuan is not being sought.
Sent Department 1128, repeated Shanghai 51.