693.0031/4–3049: Telegram

The Consul General at Peiping (Clubb) to the Secretary of State

736. ReContel 732, April 29 [30]. Chang58 called today. Said he in contact Ministry [Minister] Industry and Commerce, Yao, who desires establish trade contacts North China and Japan. Confirmed North [Page 977] China ready offer 100,000 tons each coal and salt [and] wants in return machine parts particularly for textile and steel industries, newsprint, medicines. Professes be uninformed re other items possible trade, said it was desire first determine matter in principle, then get down details.

He said proposed trade should be mostly barter basis, no money exchange operations contemplated. Trade would be handled Chinese firms this end, some existing, some to be formed, operating under general license North China Government. Shipping would be handled Japanese, contract already existing. Would expect no trouble Chinese Navy. Whole matter decision [for] SCAP.

Told him I would try get information re matter. Please instruct.

Took occasion outline desirability offering facilities for foreign businessmen, noting particular case American oil men unable get North China entry permit (Contel 691, April 2259), bad effect anti-American propaganda on trade relations and stressed matter Chinese apparent need foreign trade.

He said Yao willing restore Sino-American trade to prewar level, that Mao Tse-tung’s60 political thinking was along moderate lines set forth “new democracy”. He indicated that situation was complicated by thinking in lower Communist levels along more strictly Communist lines, but concluded by saying there was reason to believe there would shortly be political veering to right.

Handed Chang excerpts from House Foreign Affairs Committee’s [report61] regarding amendment China Aid Law April 1948,62 for reference.

Sent Department, repeated Nanking, OffEmb Canton, Shanghai, Tientsin.

  1. Chang Tsung-ping, charged by Chinese Communist Minister of Industry and Commerce Yao I-lin with fostering foreign trade, particularly with Japan.
  2. Not printed.
  3. Chairman of the Central Committee of the Chinese Communist Party.
  4. No. 323, 81st Cong., 1st sess.
  5. Approved April 3, 1948; 62 Stat. 158.