Evening star., 1932-05-15
BY VICTOR KEEN.

y HANGHAI-China is looking to
foreign capital and foreign ex-
~ resources. Regulations providing
for foreign participation in the
expansion of the country's industrial
resources have been drafted by the min
istry of industry at Marking for early
submission to the executive Yuan.
The proposed foreign assistance will
take the form of joint Chinese and for
eign enterprises financed by foreign
capital and concessions granted to for
eign interests. The draft measure stip-
ulates that any industrial enterprise or
ganized under its provisions must not
violate the principle Of equality and
reciprocity and must in no way impair
China's sovereignty and administrative
integrity
BY the terms of the measure the Ma
tional government is authorized to en-
ter into agreements with foreign fac
tory interests for supplying joint capital
for the operation of Chinese industries,
provided the foreign interests are in
position to assume full responsibility
for the planning of the proposed indus
tries and to supply all necessary ma
chinery and other equipment. In the
case Of exclusively Chinese enterprises
the Nanking authorities are authorized
to obtain loans from foreign factory In
terests or banking consortiums.
Adequate Capital Required.
The regulations permit the govern
ment to grant concessions to foreign
factory interests for the operation for
a specified number of years Of indus
tries requiring expert knowledge and
special experience. The concession
aires must have had experience in op-
Grating such industries and command
adequate capital.
To stimulate the influx of foreign
capital special provision is made, at
the direction of the National govern
ment, for reduction in import duties
on machinery or other equipment. All
industrial corporations formed in ac-
cordance with these measures must
conform to the Chinese industrial leg
islation. The National government may
send Chinese students, engineers and
superintendents to receive special train
ing in the countries of foreign investors
and the latter shall be responsible for
introducing those selected for such
training.
Subject to such general limitations
as may be imposed upon the export
of gold or silver in special circum-
stances, the foreign investors may ex-
port all the profits they derive from
their investments.
Group Investments Permitted.
Foreign interests may make their in
vestments either singly or in combina-
ton. When investments are made In
the combination and where such in
vestors are of the same nationality
there must not be more than five in
vestors. II the investors are of differ
ent nationalities there must not be
more than six investors or more than
three nationalities represented. At
least 81 per cent of the shares of
companies formed under this plan
must be held by the Chinese. and
majority of the members OF the board
of directors, the chairman of the board
and the general manager must be Chi
nese.
Private Chinese business interests
may be allowed to hold a part of the
shares allocated to the Chinese gov
ernment, provided the total of such
privately owned shares does not ex-
ceed rs per cent of the total sub
scribed shares of the proposed COM
pany and provided also that 1t shall
not be permissible for the private Chi
nese investors either to pledge their