893.50/7–1247: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received July 12—11:45 a.m.]
1518. Plan now being studied by National Economic Council is economic reform plan adopted March 23, 1947 by Central Executive Committee of Kuomintang described Embassy’s despatches 652, April 21 and 665, April 25.96 (ReDeptel 1112, July 7, sent Shanghai,97 repeated Nanking 831, Tientsin 114, Geneva 735.)
Embassy officer July 9 discussed with Chen Li-fu,98 whose proposals for economic reform are embodied in plan now being discussed by NEC, present status that plan. He said that plan, while containing basic objectives stated Embdes 652, has been redrafted; that it contains 87 articles grouped under 3 major headings including (1) economic projects already undertaken but not vigorously carried out; (2) projects for which Ministries concerned will be instructed to draft detailed plans for early execution; and (3) projects of long-range nature not presently considered urgent.
Chen stated that “only defect” of plan is that it does not take up in detail question of land problems; that plan as now drafted contains about 95% of his original proposals for economic reform (Embdes 665, April 25); that it has no connection with 5-year industrial plan (Embdes 473, February 497) which continues to be shelved; that part of emergency economic measures promulgated February 17 [16]99 are included in plan; and that NEC currently discussing inclusion of recently announced general mobilization measures in economic plan.
Other meetings with Chen will be held soon and efforts will be made to obtain full text of redrafted plan and additional information on proposals affecting foreign trade. Plan adopted March 23 by Kuomintang includes following recommendations:
“For international trade, restrictions should be applied to importation those articles other than production tools, raw materials, books and scientific research equipment so as to save our foreign exchange—encouragement should be given to all exporting trades. To stimulate business of export and import, exporters may use their foreign exchange for importations. To improve export trade, efforts should be made to standardize manufacture of different native products. [Page 1158] Handicrafts should be organized in the form of cooperatives with aim of expediting export. National commodity supply cooperative should be charged with responsibility of contacting international cooperative and trade committee of international cooperative union and wholesale cooperatives all over the world and trying barter system.”
Embassy withholding comment on points raised Deptel pending receipt of further information from Chen Li-fu with whom those points will be discussed. Meanwhile, impression gained in talks with Chen and several of his associates that he is optimistic regarding adoption economic reform plan by NEC and that development described Embdes 830, June 25 [23]2, only temporary reversal. Chen stated that [he?] had been appointed Vice Chairman of NEC and, in absence of Premier Chang Chun, had alternated with Hsu Kan, Director General of Office of Comptroller-General, as temporary Chairman.3
Sent Department 1518; repeated Shanghai 623, Tientsin 86. Department please pass to Geneva USDel ITO.4
- Latter not printed.↩
- Not printed.↩
- Vice Chairman of the National Economic Council.↩
- Not printed.↩
- See telegram No. 299, February 17, from the Ambassador in China, p. 1071.↩
- Not printed; this despatch indicated that Dr. Chen had not realized his ambition to attain control of top economic positions in the Chinese Government (893.50/6–2347).↩
- For discussion of the plan, see memorandum of July 23 by the Assistant Commercial Attaché in China, p. 661.↩
- United States Delegation to the International Trade Organization.↩