893.6359/8–948: Telegram

The Secretary of State to the Ambassador in China (Stuart)

1329. Ref Embtel 1462, Aug 9, and previous.

Dept and AEC have given careful consideration to points raised by Wong. In view impracticability incorporating point 2 in agreement because of reasons outlined below, Emb requested continue discussions with Wong looking toward acceptable compromise on point 1 which would provide required “face” to achieve conclusion “agreement”.
On assumption monazite available for shipment is similar to material, analysis of which reported in Dept’s instruction of June 8,19 it appears that grade not suitable for purchase by Munitions Board for stockpile. AEC itself not buyer of monazite. Also questionable whether US industry interested in purchasing concentrates of only 90% purity, particularly since rare earth plus thoria content of cleaned concentrates indicated as only 62% against 65% minima content desired. Should industry be interested it is likely that offering price for such concentrates would be under $100 rather than over. It should be pointed out to Chinese that paragraph 8, our proposed draft (Deptel 1437 [437], March 24) provides medium for eventual conclusion long term purchase arrangements for monazite of suitable grade and that, in meantime, US suggests sale of available quantities to be subject to commercial negotiations with US firms.
In any event, it appears that dollars cannot be acquired immediately through monazite sales, and that Chinese not in position assume obligation for laboratory research equipment through internal financing. Dept requests Emb obtain Chinese reaction to alternative whereby US would furnish without charge equipment required for analysis of mineral samples in China for 2-year period and would agree to leave this equipment there after completion project. US would of course insist that provision be made for inclusion American analysts in laboratory during work on project.
With reference Wong’s original suggestion for training Chinese scientists in US, Dept prefers this question be considered independently. If he again raises matter, Emb should state that regular mechanism for exchange of students exists and that Dept would be glad to facilitate assignment of qualified students to private US universities depending on merits of individual cases.
With reference last paragraph Embdes 321, July 27,19 Keiser (now employed by Geological Survey) has requested appropriate offices in Interior to expedite delivery material desired by Hsieh.
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