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

893.50 Recovery/6–2448: Telegram

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

Washington, June 24, 1948—11 p.m.

921. Following is revised text certain articles China Agreement as indicated Deptel 920 together with minor drafting changes other articles:

Preamble: The Government of the United States of America and the Government of the Republic of China:

Considering that it is the policy of the Government of the United States of America to extend economic assistance to the people and the Government of China in accordance with the provisions of the China Aid Act of 1948;

Considering that it is the policy of the Government of China to undertake a vigorous program of self-help in order to create more stable economic conditions in China, and to improve commercial relations with other countries;

Have agreed as follows:

Article I—(Assistance)

The Government of the United States of America undertakes to assist China, by making available to the Government of China or to any person, agency or organization designated by the latter Government such assistance as may be requested by it and approved by the Government of the United States of America. The Government of the United States of America will furnish this assistance under the provisions, and subject to all of the terms, limitations and conditions, of the China Aid Act of 1948 (other than Section 404 (b) thereof), acts amendatory and supplementary thereto and appropriation acts thereunder, and will make available to the Government of China only such commodities, services and other assistance as are authorized to be made available by such acts. The Govt of the United States of America may suspend or terminate at any time the assistance under this Article.

Article II—(General Undertakings)

1. In order to achieve the maximum improvement of economic conditions through the employment of assistance received from the Government of the United States of America, the Government of China undertakes

a) to adopt or maintain the measures necessary to ensure efficient and practical use of all the resources available to it, including:

(i) such measures as may be necessary to ensure that the commodities and services obtained with assistance furnished under this Agreement are used for purposes consistent with this Agreement; and

(ii) to the extent practicable, measures to locate, identify and put into appropriate use in furtherance of its efforts to improve economic conditions in China, assets, and earnings therefrom which belong to nationals of China and which are situated within the United States of America, its territories or possessions. Nothing in this clause imposes any obligation on the Government of the United States of America to assist in carrying out such measures or on the Government of China to dispose of such assets;

b) to promote the development of industrial and agricultural production on a sound economic basis;

c) to initiate and maintain financial, monetary, budgetary and administrative measures necessary for the creation of more stable currency conditions and for the promotion of production and marketing of goods for domestic consumption and export; and

d) to cooperate with other countries in facilitating and stimulating an increasing interchange of goods and services with other countries and in reducing public and private barriers to trade with other countries.

2. The Government of China will take the measures which it deems appropriate to prevent, on the part of private or public commercial enterprises, business practices or business arrangements affecting international trade which restrain competition, limit access to markets or foster monopolistic control whenever such practices or arrangements have the effect of interfering with the execution of the provisions of this Agreement.

Article III—(Improvement of Commercial Relations)²⁴

Article IV—(Principles of Distribution)

Article V—(Local Currency)

Insert “within China” in paragraph 3 following “administrative expenditures in Chinese currency” and preceding “incident to operations”. Change introductory phrase first sentence, para 4 to read “The Government of China will further make such sums” instead of “The Government of China undertakes further to make such sums”.

Paragraph 4 (b) changed to read as follows:

“b) costs (including port, storage, handling and similar charges) of transportation from any point of entry in China to the consignee’s designated point of delivery in China of such relief supplies and packages as are referred to in Article VII.”

Article VI—(Access to Materials)

• Paragraph 1, first sentence: Replace “undertakes to” immediately following “the Government of China” with the word “will”. Delete word “and” and insert comma in last phrase immediately preceding “after due regard”. Second sentence: First phrase revised to read “The Government of China will take such specific measures as may be necessary to carry out the provisions of this paragraph.” Third sentence: Revised to read “The Government of China will, when so requested by the Government of the United States of America, enter into negotiations, etc”. Paragraph 2: Revised to read “The Government of China will, when so requested by the Government of the United States of America, negotiate such arrangements, etc.”
• Paragraph 3: Revised to read “The Government of China will, when so requested by the Government of the United States of America, use its influence with its nationals to further the objectives of paragraphs 1 and 2 of this Article in respect of materials originating outside of China.”

Article VII—(Relief Supplies):

The Government of China will, when so requested by the Government of the United States of America, enter into negotiations for agreements (including the provision of duty-free treatment under appropriate safeguards) to facilitate the entry into China of supplies of relief goods donated to or purchased by United States voluntary non-profit relief agencies and of relief packages originating in the United States of America and consigned to individuals residing in China.

Article VIII—(Consultation and Transmittal of Information)

1. The two Governments will, upon the request of either of them, consult regarding any matter relating to the application of this Agreement or to operations or arrangements carried out pursuant to this Agreement.

2. The Government of China will communicate to the Government of the United States of America in a form and at intervals to be indicated by the latter after consultation with the Government of China:

a) detailed information regarding projects, programs and measures proposed or adopted by the Govt. of China to carry out the provisions of this Agreement;

b) full statements of operations under this Agreement including a statement of the use of funds, commodities and services received thereunder, such statements to be made in each calendar quarter;

c) information regarding its economy and any other relevant information which the Government of the United States of America may need to determine the nature and scope of operations, and to evaluate the effectiveness of assistance furnished or contemplated under this Agreement.

3. The Government of China will assist the Government of the United States of America to obtain information relating to the materials originating in China referred to in Article VI which is necessary to the formulation and execution of the arrangements provided for in that Article.

Article IX—(Publicity)

1. The Government of China will keep the people of China fully informed of the progress achieved by the Government of China in implementing the undertakings contained in this Agreement designed to achieve more stable economic conditions in China, and it will provide continuously information to the people of China regarding the nature and extent of assistance furnished pursuant to this Agreement. It will make such information available to the media of public information and will take practicable steps to ensure that appropriate facilities are provided for the dissemination of such information.

2. The Government of the United States of America will encourage the dissemination of such information and will make it available to the media of public information.

3. The Government of China will make public in China in each calendar quarter full statements of operations under this Agreement, including information as to the use of funds, commodities and services received.

Article X—(Missions)

1. The Government of China agrees to receive a Special Mission for Economic Cooperation which will discharge the responsibilities of the Government of the United States of America in China under this Agreement.

2. The Government of China will, upon appropriate notification from the Ambassador of the United States of America in China, consider the Special Mission and its personnel as part of the Embassy of the United States of America in China for the purpose of enjoying the privileges and immunities accorded to that Embassy and its personnel of comparable rank. The Government of China will further accord appropriate courtesies to the members and staff of the Joint Committee on Foreign Economic Cooperation of the Congress of the United States of America, and will grant them the facilities and assistance necessary to the effective performance of their responsibilities.

3. The Government of China will extend full cooperation to the Special Mission and to the members and staff of the Joint Committee. Such cooperation shall include the provision of all information and facilities necessary to the observation and review of the carrying out of this Agreement, including the use of assistance furnished under it.

Article XI—(Settlement of Claims of Nationals)—Text being forwarded separate telegram.²⁵

Article XII—(Entry into Force, Amendment, Duration)—Add following sentence to paragraph 1: “Article V shall remain in effect until all the sums in the currency of China required to be disposed of in accordance with its own terms have been disposed of as provided in such article.”

Make additional changes Article VI (Access to Materials) as follows:

• Paragraph 1, first sentence: Change “materials which are required”, to “materials originating in China which are required”.
• Paragraph 2: Substitute “appropriate” for “required” immediately following “negotiate such arrangements as are”.

Marshall

24. For proposed text of this article, see Department’s telegram No. 923, June 24, 11 p.m., p. 571.
25. Telegram No. 927, June 25, 8 p.m., p. 573.