Foreign Relations of the United States, 1949, The Far East: China, Volume IX

893.51/12–1549: Telegram

The Consul General at Shanghai (McConaughy) to the Secretary of State

Shanghai, December 15, 1949—4 p. m.
[Received December 16—1:27 a. m.]

5241. Manager American Asiatic Underwriters told by official People’s Insurance Co., high level decision reached Peiping that corporations organized under Chinese law must divest themselves of foreign shareholders. This policy to be initiated about March 1950 with final liquidation to be concluded by June 30. No indications re terms on which liquidation foreign interests would be permitted, presumably unfavorable. Uncertain if decision applies only to financial institutions or Chinese corporations generally. Possibly foreign shareholders may be forced accept payment in Communist government bonds (mytel 5229, December 15⁵⁸). Will follow report developments.

Please pass Commerce for information American banks, their clients.

McConaughy

58. Not printed.