CO129-619-1 Parliamentary delegation to China 1-9-1947 - 23-12-1947 — Page 129

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corruption and reactionary intransigence. The drastic

reorganisation which would be needed to bring this

about might be imposed by the Americans as a

condition of the provision of large-scale financial

and economic aid which the United States alone are in a

position to supply, and which Chinese now admit is the

sole hope of economic salvation for their country.

10.

Moanwhile, evidence is not lacking that the

recent deterioration in the economic position in China,

the gradual weakening of the authority of the Chinese

Central Government, and the decline of morale in the

army, have caused the United States Government to

undertake a review of their China policy. As a first

step, a mission was sent to China in July under General

Wodemeyer, the war-time commander of the United States

forces in China, to investigate the position and furnish

a report. General Wodemoyer's military qualifications

make it reasonable to suppose that the military position

in China, and the ability of Chiang Kai-shok's army to

sustain, unaided, the Central Government's position in

the face of Communist pressure, would engage his

principal attention while in China, though

ho will undoubtedly at the same time

study the economic situation, which is largely bound up

with the military factor. Goneral Wodomeyer is due to complete his investigations towards the end

of August. It is not anticipated

that any decision can be reached by the United States

Government in regard to China until after his return.

Any programme for large-scale aid for China would

presumably require Congressional approval.