The United States started trading with China soon after the American Revolution, sending its sailing vessels (historically termed "China Clippers") down around Cape Horn on the long and hazardous route to Canton. This trading has continued amicably and prosperously for over 150 years and the adventurous Yankee sailors are commemorated in modern counterpart by the new trans-Pacific flying boats of the Pan-American Airline called the "China Clipper."

Thus, over this long period of time and until the present, the trade between China and the United States has amounted to billions of dollars.

At the turn of the present century, the year of 1900 witnessed the Boxer Rebellion in China, and the subsequent encroachment by foreign powers of Chinese territory into "spheres of influence." The United States championed the "Open Door" policy to protect China's territorial integrity in the interest of moral right and to maintain a free state of commercial trading.

2

The "Open Door " policy has allowed all nations to benefit by trade with China through commercial progressiveness and ability but not through means of compulsion or coercion.

To show what political and commercial friendship exists between China and the United States, figures taken from the China Year Book of 1936 show that during the years 1934 to 1936 inclusive, the United States exports to China amounted to 271 millions of dollars in 1934, 175 millions in 1935, 186 millions in 1936. Imports from China amounted to 94 millions in 1934, 136 millions in 1935, 186 millions in 1936. The value in percentage of the trade with China was over 26% of all China's imports in 1934, 19% in 1935, and nearly 30% in 1936. Thus in the whole year of 1936 the total trade between the two countries was over 370 million dollars. This is a greater amount than China's trade with Japan, Great Britain or Germany.

Nations in this modern world must depend upon international trade for everyday existence and no one nation can be industrially and economically self-sufficient.

3

The more developed industrially a nation becomes, the more variety of goods that nation requires in consumption. The motor car is illustrative of this fact. The products of 57 nations are needed in its manufacture, of which China contributes tung oil for paints, tung-sten for steel, mohair for upholstering and other products.

China's purchases from the United States are principally machinery, metal manufactures, automobiles and trucks, airplanes, raw cotton, cereals and flour, paper and wood pulp, timber and chemicals. The principal goods that China sells to the United States are tung oil, raw silk, tea, eggs and egg products, furs and skins, bristles, tungsten, and antimony. Thus the trade between these two nations has grown immensely in value and variety of goods since the early beginnings of the Yankee traders with their comparatively few items of commerce then common.

The Chairman of the United States Economic Mission to China in 1935, the Honorable W. Camaron Forbes made the following remark upon his return to this country.

4

"Our Economic Mission came away profoundly impressed with the importance and significance of the new movement, what they in China called the 'New Life.' China under a new and spirited ruler is being unified and, with the new means of communication now under development and well advanced toward an effective instrumentality, has already achieved a cohesion that few even of the Americans cognizant of Chinese trade and problems appreciate, which in my opinion cannot fail to revolutionize business and trade in China, once the facilities now available become used to anything near their potentialities."

In 1935 over 50,000 miles of graded and surfaced highways were open to vehicular traffic connecting the more important provinces and civic centers in China. Over 60,000 miles were constructed in 1936. The national economic program includes the five year plan for the construction of railways, an average of 1700 kilometers a year or a total of 8,500 kilometers in all. 1936 witnessed the completion of the Canton-Hankow Railway connecting the nation from South to the North. As evidence of the great strides in railway construction, imports of railway materials increased from 65 million (American gold) dollars in 1932, 10 millions in 1934, to nearly 20 millions in 1936. Purchases were made from the United States but Great Britain was the leading supplier due to credit facilities.

5

During 1936 progress was made in the stabilization and unification of currency, a benefit to a trade which has shown the highest stability of foreign exchange since the early part of 1936 to date, and a construction and industrial development which owed much to the stimulation of the national government. The first half of 1937 has shown a continuation of this upward trend of business welfare. In Shanghai alone, for example, electric power consumption increased 67% over 1936, yarn production 27%, flour production 13%, cement 42%, and new buildings 47%.

Commerce with the United States has greatly increased during 1937 over the period of a year ago. Julian Arnold, United States Commercial Attache in Shanghai, in his report of August 15, 1937, stated that China's imports for the first 6 months increased 30% and exports 45%, while the total trade increased 38% over the same period of 1936. Individual products such as motor cars show a 75% increase and imports from the United States made up 80% of the total purchases.

6

The increasing popularity of American goods in China together with the greater and greater purchasing power of the Chinese people, arising from national unity and industrial development, will result in the increased trade and greater prosperity of the two friendly nations.