893.50 Recovery/6–2548: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received June 25—7:20 a.m.]
1152. For Department and ECA. Foreign Affairs (Foreign Office] today orally informed Embassy (with confirming aide-mémoire due [Page 573] tonight) that article VIII contained Deptel 900, June 19, and submitted by aide-mémoire to Foreign Office June 21 is unacceptable. Foreign Office requests deletion. Request reached after consultation Foreign Minister, Finance Minister and Governor Central Bank. It is based on (1) their fear of impact its presence in agreement might now or later have on highly sensitive Shanghai speculative markets with consequent damage to whole Chinese economy and (2) suspicion amounting almost to conviction as a result of newspaper stories widely publicized here that certain or all European beneficiaries of EC Act have successfully resisted inclusion this or similar article in their negotiations with USA. This connection see Embtel 1119 of June 22, 7 p.m.30
Given advanced state inflation here, Embassy inclines believe article VIII says either too little or too much and accordingly might well be dropped.
Sent Department 1152, repeated Shanghai, 527.