Foreign Relations of the United States, 1948, The Far East: China, Volume VIII

711.9327/1–848: Telegram

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

Nanking, January 8, 1948—8 p.m.
[Received January 9—6:21 a.m.]

55. Following receipt of note from Minister of Foreign Affairs⁵ (reEmbtel 41, January 7), Civil Air Attaché⁶ discussed numbered paragraphs 2 and 3, which Embassy considered vague, with Lin, Director International Relations Dept., Ministry of Communications, and Tso and Shaw of Chinese CAA.⁷ During course this discussion it was indicated by Chinese that paragraph No. 2 of note (concerning sections (a) and (b) of annex) was inserted in view of Chinese desire to revise Chinese routes designation in annex so as to resemble broad and flexible language used describe US routes.

No. 3 of note inserted because Chinese have been confronted with one minor difficulty in obtaining a visa for a CNAC⁸ employee who wished to proceed US work for CNAC there. Air Attaché indicated any difficulty encountered in the procurement of visas from Consulate, Shanghai, could be worked out locally and that he did not think revision or addition to agreement necessary to insure to Chinese Govt that such a situation would not arise again. Request made for consultation re approval transportation rates both parties (also outlined paragraph No. 3 of note) assertedly because Chinese are of opinion that in event governmental action deemed necessary in connection with rates Chinese Govt would be unable, due its cumbersome procedures, to act within first 15 of 30 days provided for section d, paragraph No. 5 of annex.

Reference paragraph No. 1 of note just received, Embassy has again reviewed language in paragraph b of notes exchanged on occasion signing of agreement. Meaning of term “shuttle service” as used in English text of paragraph in question is, of course, carrier operating solely back and forth between two specified points as opposed to through line which stops these points en route to ultimate destination. This meaning not, however, clearly expressed in Chinese text which literally translated states that designated airline “may not operate inter-regional air business” between Hong Kong and any of the points mentioned in annex of agreement. Embassy believes that, taking nothing else into consideration, Chinese can interpret Chinese text this paragraph to exclude American airlines from carrying any traffic this segment of international route, notwithstanding all movement Shanghai-Hong Kong traffic by US carrier is on through international planes.

Lin of Ministry Communications—who played most prominent part for Chinese in negotiations—has frequently mentioned to Air Attaché that Powell⁹ informed him during course negotiations that US carriers would not be interested in movement of Shanghai–Hong Kong traffic and that Lin was, therefore, of belief US would not engage in movement traffic this segment its route and that exchange of notes provided this. Dept may wish consult Powell this connection as statement from him might be used advantageously refute Lin’s statements.

As Embassy recalls negotiations, this question was frequently raised by Chinese. Each time they were assured that primary interest US carriers was to carry through traffic for the greatest distance possible on each route and that no concern need be felt over possibilities for competition with Chinese lines on Hong Kong–Shanghai route. Statement was never made by negotiators to effect that positively no Hong Kong–Shanghai traffic would be carried by US carriers. When this question raised, effort was always made to remove it as an issue rather than to solve it absolutely. It was finally agreed to add the proviso which in English assured that no “shuttle service” would be instituted, because Chinese insisted and because US negotiators knew that no US carrier would institute what is described by that term. This narrow term was deliberately used by US negotiators because it gave the type of assurance which the Chinese sought at that time.

When negotiations under way Chinese had had no previous experience along this technical line. They were obviously at a loss to comprehend all the implications of the terms of agreement. Regarding description their routes, for instance, after they had several times failed to produce a route description for section b of annex, Powell himself drafted what he considered a suitable description, which they used as a basis to commence discussion on this subject. These are matters which Butterworth¹⁰ and Powell will probably recall. It appears to Embassy that US Government should hardly be expected to make concessions now because Chinese were so completely inept in handling original negotiation of the agreement, dragging out as it did for about 4 months. The Ministry of Foreign Affairs did not even have representative in negotiations until very last. Ministry of Communications even attributed delay of number of weeks toward end of negotiations to fact it, rather than Foreign Office, was making original translation of agreement because of technical character of document. Agreement (and its appendages) in translation was checked numerous times by Chinese (including Foreign Office) and meaning of term “shuttle service” was made clear to them. It is hard to believe that men like Wu Yuan-chao and Andrew Lin of Ministry of Communications did not know real meaning of term. (Department may wish refer to telegram despatched by Powell during negotiations, especially number 1404 of August 30, 1946.¹¹

The question of Hong Kong–Shanghai carriage by US Lines was not raised as violation of agreement by Chinese when US carrier flights commenced, but, apparently, has only come to be of importance to them since the recent conclusion of bilaterals with Dutch and Siamese (see despatches 1541, July 30, 1947 and 1714, September 26, 1947 from Consul General [at] Shanghai and 1151, December 15, 1947 from Embassy)¹² in which Chinese may be obliged to accord rights Hong Kong–Shanghai traffic to carriers those nations as long as any third nation other than UK enjoys such right.

Sent State 55; Shanghai 28 via courier January 8, 8 p.m.

Stuart

5. Wang Shih-chieh.
6. Francis C. Jarvis.
7. Civil Aeronautics Administration.
8. China National Aviation Corporation.
9. Boiling Powell, Adviser to the Office of Transport and Communications in 1946 and sent to China to assist in negotiation of the Air Transport Agreement.
10. W. Walton Butterworth, Director of the Office of Far Eastern Affairs; in 1946, Minister-Counselor of Embassy in China.
11. Foreign Relations, 1946, vol. x, p. 1232.
12. None printed.