811.516 Export-Import Bank/11–1047: Telegram
The Consul General at Shanghai (Davis) to the Secretary of State
[Received November 10—1:38 a.m.]
2599. Governor Central Bank has given ConGen copy of message received from Chilean [Chinese] Ambassador, Washington, summarizing Exlm Bank reply58 to Chinese application for a cotton credit. Officers concerned note with gratification that bank’s response agrees substantially with statistics set forth mytel 1991, August 18 repeated Nanking 1439. Believe however that bank’s indication of earliest time for reconsideration being next spring has discouraged Chinese on two counts as follows.
[Page 1205]- a.
- Need for up to 600,000-bale import during August, September and October 1948 previously agreed all concerned here as reasonable carryover into new domestic crop year on basis present indications and trends. Three months’ advance, margin for commercial procurement, shipment and delivery this reserve necessary, which would necessitate conclusion of credit arrangements by May. This time schedule justifies in Chinese view negotiations early next year for financing, at which time consumption estimates and availabilities from indigenous crops can be forecast more accurately.
- b.
- Chinese seriously disturbed by bank’s failure to appreciate psychological factors involved. They apparently feel that door was slammed pretty loudly, and without taking into account more delicate balances in present situation, anticipate that Chinese will make their own response along these lines. They are apparently somewhat unnerved by wording of Exlm reply at this particular time since in their view it indicates no disposition even to talk about extending lifeline in emergency.
Sent Embassy 1761, repeated Department.