693.0031/4–3049: Telegram

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

265. 1. Dept believes desire Chi Commies develop Sino-Jap trade might be used improve position ConGens, but doubts wisdom open demand for recognition ConGen’s status as absolute quid-pro-quo in view possibility extreme reaction Commies. (Urtels 723, April 28,68 732 and 736, April 30).

2. Dept considers that position re role ConGens could be taken more effectively by SCAP than by ConGens; that when SCAP approached by agents re trade Commie China, if capital goods involved proposed transaction, he should indicate as follows:

[Here follows quoted section of paragraph 5 of telegram No. 88278, supra.]

3. Proposed transactions that do not involve Jap capital goods could be carried forward by SCAP without reference ConGens as inducement Chi Commies. Above tactics being considered Army and SCAP. If they concur, anticipate authorize you respond initial inquiries by stating SCAP willing consider specific trade proposals, but that general arrangements and details particular transactions should be worked out directly by SCAP with firms concerned. Envisage that Commie agent firms or private firms acting on own would then contact SCAP under circumstances subject SCAP’s discretion, and would be advised in sense para 2 above if capital goods involved proposed barter arrangement.

4. Meanwhile, if you feel immediate response necessary, suggest you indicate understanding inquiries reftels being considered SCAP and that you authorized transmit any further proposals or info regarding trade desired.

5. Request your comments above tactics and will instruct soonest.

  1. Not printed.