28 June 1949
Moscow, 28th of June 1949
The reception was held on 27 June and continued from 11 PM to 12 AM.
The following were present at the reception: comrades Molotov, Malenkov, Mikoyan, Liu Shao Chi, – Secretary of the Central Committee of the Communist Party of China, Gao Gan – member of the Politbureau of the Central Committee and also the Secretary of the Bureau of the Central Committee and Chairman of the Government of Manchuria, Van Tsyasyan – member of the Central Committee of the Communist Party of China, Karsky (Shi Chzhe) – interpreter and I. V. Kovalyev.
After mutual greetings and handshakes with the delegation, Comrade Stalin enquired about the health of comrade Mao Tse Tung.
Comrade Liu Shao Chi thanked Comrade Stalin for his attention to Comrade Mao Tse-tung and handed him a letter from Comrade Mao Tse-tung expressing gratitude to comrade Stalin for the extraordinary support, which was provided to China by the Soviet Union and requested comrade Stalin to receive the delegation.
Later comrade Stalin turned to the discussion of the questions put forward by the delegation.
1. Credit. Comrade Stalin said that the Central Committee of the All-Union Communist Party (b) has decided to provide the Central Committee of the Communist Party of China a credit worth $300 million. He noted that such an agreement between the two parties is being done for the first time in history.
A credit of $300 million carrying 1% interest per annum will be provided to China in terms of equipment, machines and different sorts of materials and commodities amounting to $60 million per year for a period of 5 years.
Repayment of the credit by China would be over a period of 10 years after the full realisation of the credit. Comrade Stalin also said that Comrade Mao Tse Tung in a telegram to him had expressed the opinion that 1% interest per annum is too small for a sum of that magnitude and that it should be increased.
Comrade Stalin explained to the delegation that to the countries of Western democracies (the countries of Eastern Europe – Editor) the Soviet Union has provided credit at 2% per annum, but from China it is asking for 1%, as, unlike the countries of western democracies where there is no war and the economies have strengthened, in China the war is continuing as also the devastation and thus China needs greater support on the basis of greater concessions.
Later comrade Stalin jokingly added that after all if you still insist on a higher interest then it is your cause and we can accept even that.
Regarding the signing of the agreement for providing the credit Comrade Stalin said that there are two options: first – the agreement can be signed by the representatives of the Central Committees is of the All-Union Communist Party (b) and the Communist Party of China, and second by the representatives of the Soviet government and the government of Manchuria which already exists so that later when the all-Chinese Democratic Coalition government is established the agreement can then be redefined as one between the governments of the Soviet Union and China.
2. Regarding the specialists. Comrade Stalin said that we can provide specialists. We are ready in the near future to send the first group of specialists you had asked for. But we have to agree about the conditions of their stay. We think that the payment is possible through provisions if you do to your own specialists and must be at the same level as for the best of your specialists, neither less nor more. In this regard in case that the salaries of our specialists are higher then we can if needed augment these at the expense of the Soviet state.
We request you, Comrade Stalin said, that you must inform us about any inappropriate behaviour by any individual specialist if such behaviour occurs, as no family is without a black sheep and among the good ones there may be a bad one too.
Bad behaviour would put to shame the reputation of the Soviet State and therefore we would take preventive measures of educating and if needed punishment.
We will not allow the Soviet specialists to look down upon the Chinese specialists and the Chinese people and ensure that they relate to them with sensitivity.
Responding to what was said by Comrade Stalin, Comrade Liu Shao Chi said that there are foreign specialists in China who are not related in any way with the imperialists and that their salaries are much higher than that of the Chinese specialists. To which comrade Stalin said that the Soviet state has its own thinking and regulations different from that prevalent in capitalist countries and we would like to adhere to these.
3. Sending Of Specialists To Shanghai. Comrade Stalin said that we have chosen 15 specialists and we can on demand send them at any time. Please discuss about it and let us know. In general you should keep in mind that in large cities and specially in Shanghai there are large number of your own specialists and qualified workers who are capable of not less but more than what the Soviet specialists can do and, therefore, you need to employ the former actively.
4. Comrade Stalin said that we are ready to offer you help in the removal of mines in the waters off Shanghai as we have large numbers of specialists and trawlers.
We could, for example, send a number of minesweepers to the government of Manchuria and train Chinese sailors subsequently in Dalen, Vladivostok or Port Arthur for the mine-clearing. He added, laughing, that the Manchurian government can then ‘sell’ them to the Central Government.
5. Regarding Sinkiang. Comrade Stalin said that the occupation of Sinkiang should not be further postponed as the postponement may allow the English to intervene in the affairs of Sinkiang. They may instigate the Muslims including the Indian Muslims for continuing the Civil War against the communists which is undesirable as there are large reserves of petroleum and cotton in Sinkiang which are greatly needed by China.
The Chinese population in Sinkiang is not more than 5% and after the occupation of Sinkiang it is necessary to increase the percentage of the Chinese population to 30%. Resettling Chinese will serve the purpose of comprehensive development of such a large and rich region and strengthening the defences of the Chinese border.
In general for strengthening the security of China it is necessary to resettle Chinese population in the border areas.
You, said Comrade Stalin, greatly overestimate the strengths of M.A. Bufan (the commander of the Kuomintang military forces in the north-west of China – Editor). He has cavalry which can be routed by the help of artillery. If you want we can give you 40 fighter planes which would help you in crushing this cavalry very quickly.
6. Navy. Comrade Stalin said that China does not have a flotilla of its own but added it appears that you have some ships which have been captured from the Kuomintang?
China must have the navy of its own and we are ready to help you in creating the navy. As of now, for example, we can lift sunken military and commercial ships and help in repairing them.
And concerning your request for strengthening the defence of Tsindao we can send a group of ships on a visit to the port of Tsindao after the establishment of the All-Chinese government.
7. Comrade Liu Shao Chi thanked Comrade Stalin for the enormous help being given in all the spheres of life in China on extremely concessional conditions such as never before in history.
He immediately pointed out that the Central Committee of the Communist Party of China has formulated instructions which will be sent to all the party organisations for creating conducive conditions for the Soviet specialists.
8. Comrade Stalin said that we will work out a set of similar instructions for the Soviet specialists so that they do not offend Chinese specialists.
9. Replying to the request of the Chinese comrades to set up an air link between Moscow and Peking Comrade Stalin said that we are ready to start organising this air route.
We are ready to help you in building an assembly and repair aviation workshop. We can give you the latest fighter planes (the word ‘latest’ was underlined by Stalin – Ed.) – Czechoslovakian or Russian as you desire so that you can use them to train your own aviation cadres.
10. Comrade Stalin agreed to the request made by the delegation to a hearing in the Political Bureau of their report about the war-political and economic situation in China, and to exchange opinions on a range of crucial questions, when it would be ready, in 3 or 4 days.
11. Comrade Stalin said that we are ready to give you comprehensive help in studying the state apparatus or the industry or anything else which you would want to know, but for this purpose we must first have you legalised by naming you as the trade delegation from Manchuria.
12. If this satisfies you then we can publish a statement in the press that the trade delegation headed by Comrade Gao Gan has come to Moscow on a visit which will allow you to see all that you wish to including the places of entertainment.
The Chinese comrades requested to be allowed to give a reply after consultations with Comrade Mao Tse-tung.
Note. The notings were made by I.V. Kovalyev (1901-1993), head of the group of Soviet experts on economic issues, representative of the CC of the AUCP(b) under the CC of CPC. Stalin later went through the document. The numbering and the underlining of parts of the text are his own.APRF. F. 45, Op.1. D.329, L.1-7.
Translated from the Russian by Tahir Asghar.
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