The Consul at Tihwa (Paxton) to the Secretary of State
[Received March 9—9:49 a. m.]
56. Have approached several contacts on matter Sino-Soviet airline re negotiations [(]reference penultimate paragraph our telegram to Department 49, March 3,28 and Nanking telegram to Department 516, March 429) including subordinate of Foreign Affairs delegate Liu and gleaned following: Liu’s assistant confirmed arrival 5 not 6 Soviet delegates and said Liu and Chinese manager airline office appointed Chinese delegates and that 2 or 3 other Central Government representatives were to come soon perhaps by plane due 11th.
Another informant again mentioned Soviet request for extension line to Lanchow. If granted USSR would thus control line of strategic airfields (in Horgos, Ili, Tihwa, Hami and Kansu panhandle to Lanchow including several emergency fields) pointing well into China which could be used both for air transport and to hold roads along route.
Liu’s subordinates stated 1 or 2 weeks’ delay now probable before conclusion trade pact, much sooner than previously reported. Each section is being separately telegraphed to both governments for approval. Current [text?] might accordingly be available at Canton. Apparently agreement in principle already reached on trade pact, at least locally, and now mere haggling over phraseology. Chinese here appear unlikely accept any dubious clauses without recognition of possible implications.
Liu’s man further said mining rights now being discussed (which Liu had denied), adding that China could save few of these in three dissident zones as Russia was never interested in negotiations except for special privileges but China now had no choice particularly in Sinkiang [in] view current weakness.[Page 1053]
He mentioned in passing other Sino-Soviet economic cooperative plans as also under consideration. I did not follow this up at time in order not to disturb him, but merely asked he pass to Liu as my suggestion that data might come through him to quiet Soviet suspicions of Liu’s talking too much to me (constantly assumed this spy-ridden place all contacts known to Russians) which he promised to do and felt response might be favorable. This assumption that Liu favorably disposed thus to give me information he could not otherwise provide may be without factual foundation but might work.
Sent Department, repeated Nanking 55, Embassy Canton 16.