Evening star., 1932-05-15
CHINA PLANS OPEN DOOR
FOR FOREIGN CAPITAL
Nanking Program Provides for Joint
Operation of Factories, Investments
and Concessions With Experts.

shares or transfer them by sale to q
foreigner.
Contributions to the capital of COM
panies formed under this plan may be
made in kind, such as machinery,
equipment, buildings or factory sites.
Shares are to be issued for such con-
tributions at the prevailing market
values thereof.
Government Purchase Provided.
The government may, whenever it
desires or after the lapse of a. definite
period to be stated in the agreement,
purchase the shares held by the for
eign or private Chinese investors. with
the investors consent. Subject to the
proviso that previous sanction must be
obtained from the government. these
measures also will apply to enterprises
operated jointly by Chinese and foreign
private interests.
With regard to industrial enterprises
operated by means Of foreign loans, 1t
is provided that the power of admins
tration shall rest completely in the
hands of the Chinese government. De-
tailed provisions are to be made in the
agreements relative to the interest and
the method and period for the re-
demption Of the loan. The rate OF
interest will be fixed in accordance
with the average rate prevailing IN the
country Of the lenders, and the period
for the redemption Of the loan adapted
to the special requirements Of the in
dustry concerned.
Loans Payable In Kind.
Loans may be paid by the lender in
kind, such as machinery and other
equipment, which are to be appraised
according to the market value current
at the tirue Of the loan. The lenders
will have the right TO supervise the re-
ceipts and disbursements of the COM
pany concerned, and these measures
will also apply to private Chinese en-
terprises operated by means of loans
obtained from foreign interests.
The measure provides that conces-
sions may be granted either to an in
dividual or group Of investors, but
that in the latter case the group must
be of the same nationality. The gov
ernment viii have the right of supervi-
sion over companies formed under this
plan. Upon the expiration of the con-
cession all the properties Of the COM
pany except the working capital are to
be taken over by the Chinese govern
ment without compensation. When
the Chinese government deems it neces-
sary, it may take over the companies
formed under this plan by giving fair
compensation to the concessionaire.
However, it will not be permissible for
the government to take this step until
at least half Of the prescribed term Of
the concession shall have elapsed. Com
panies formed under this plan will be
required to install up-to-date ma
chinery and methods Of MANAGEMENT.
Chinese experts and workmen, as far as
possible, are to be employed. A per-
centage of the annual output or net
profits of companies formed under this
plan will be paid to the Chinese gov
ernment unless this interferes with the
development Of newly formed COM
panies.
If a concessionaire suspends opera
tions before the expiration Of the term
of the concession, he will be liable to q
penalty. In the event of disputes be-
tween the concessionaire and the gov
ernment the Chinese courts will have
jurisdiction and Chinese laws will ap-
ply.