The Sino-American Commercial Treaty of 1946 was a controversial agreement aimed at providing the Nationalists with much needed wartime aid during their Civil War with the Communists. The Chinese Communists condemned the treaty as imperialist while segments of the American population criticized the commercial rights granted Chinese in the United States.
The Treaty of Friendship, Commerce, and Navigation (Sino-American Commercial Treaty of 1946), signed in Nanjing on 4 November 1946, was a comprehensive commercial treaty between the United States and China, the first such treaty concluded by either nation after World War II. Chief U.S. negotiators were U.S. Ambassador John Leighton Stuart (1876–1962) and U.S. Consul-General at Tianjin Robert Lacy Smyth. Chief Chinese negotiators were Wang Shih-chieh, foreign minister, and Wang Hua-chang, director of the Treaty Department of China’s Ministry of Foreign Affairs.
The purposes of the treaty included updating the January 1943 commercial treaty by which the United States had relinquished extraterritorial rights enjoyed in China since 1844 and developing a new framework for commercial ties between the two allies following the conclusion of the war. According to the U.S. Department of State announcement, the ten thousand-word treaty “is somewhat broader in scope than existing United States commercial treaties with respect to the rights for corporations, and includes…commercial articles similar in principle to the general provisions of recent trade agreements…” (Fox, 1947, p. 138). While the treaty may have been intended as a routine protocol, it was signed at a time when China was in the midst of a civil war between the Nationalist (Guomindang) government of General Chiang Kaishek (1887–1975) and the Chinese Communists headed by Mao Zedong (1893–1976). The treaty was to serve as a mechanism for inducing an influx of U.S. capital for China’s wartime recovery and economic development but ultimately proved ineffective. Although China’s Legislative Yuan ratified the treaty on 11 November 1946, one week after the signing, the final ratifications were not exchanged in Nanjing until 30 November 1948. The treaty was put into force too late to affect positively the Nationalist war against the Communists. On the contrary, its provisions created a storm of controversy both in China and the United States.
Chinese Communist Party Chairman Mao Zedong used the treaty to bolster his campaign against the Nationalists, accusing his enemies of being the puppets of U.S. imperialism. Having declared 4 November 1946 “National Humiliation Day,” Communist leaders at Yanan ordered Chinese flags flown at half staff for three days after the treaty’s signing. Mao vehemently denounced the original terms of the treaty, referring to it as “a commercial treaty of enslavement” in his October 1947 Manifesto of the Chinese People’s Liberation Army (October 10th Manifesto). He proclaimed, “[T]o maintain his dictatorship and carry on civil war, Chiang Kai-shek has not hesitated to sell out our country’s sovereign rights to foreign imperialism.” Communist radio broadcasts announced: “The harshness and scope of the treaty far surpass the Twenty-One Demands that Yuan Shikai signed with the Japanese. The country will be subjugated and the nation exterminated if this treaty is carried out” (Orlean, 1948, 354). The Chinese Communists’ sentiments were echoed by the Soviets, who accused the United States of attempting to wrest control of China’s economy and return the country to a semicolonial state.
The inflammatory rhetoric was targeted at several articles in the treaty that encouraged U.S. investment in Chinese industry. China would benefit from capital, modern technology, and other resources, and, in a restatement of portions of the 1943 wartime commercial treaty, U.S. interests could eventually take control of much of China’s commercial development. While the provisions incurred the wrath of Chiang Kai-shek’s enemies, they were consistent with Nationalist appeals for U.S. aid at the time.
The treaty also ran into difficulty in the United States. After U.S. president Harry Truman (1884–1972) submitted the original version to the Senate for ratification, nearly two years passed before the Senate Foreign Relations Committee completed debate and put forward revisions. On 2 June 1948 the Senate consented to ratification “with a reservation and understandings.” The final ratification by the United States took place on 8 November 1948.
Among the problematic issues was language in the treaty that guaranteed equality, mutuality, and reciprocity for citizens of both countries, a significant change over earlier commercial treaties with China by which the United States and other foreign nations benefited from extraterritorial rights. As a result, provisions for “alien land ownership” became a concern for those states that regulated land ownership by foreigners or, as in the cases of Nevada and Oregon, specifically prohibited the ownership of property by Chinese. Debate in the Senate reflected the history of poor relations between Chinese and white U.S. citizens, particularly in the western states, that had resulted in a series of “exclusion laws” passed by the U.S. Congress in the late nineteenth century. Not until December 1943 did Congress pass the Act to Repeal the Chinese Exclusion Acts, an act that paved the way for naturalization and property ownership in the United States by Chinese. The 1946 commercial treaty would override discriminatory provisions still in effect. Several states, including Nevada and Oregon, revised outdated state laws soon after the signing of the Sino-American Commercial Treaty of 1946.
The final version of the treaty was proclaimed by President Truman on 12 January 1949, just months before the Chinese Communists’ victory and the establishment of the People’s Republic of China on 1 October. In 1951 the treaty was modified with acknowledgments by the Chinese Nationalist government on Taiwan that certain provisions were no longer applicable because of the Communist victory over the Nationalists. In March 1965 the U.S. Department of State notified Taiwan that portions of the treaty “were considered suspended with respect to areas of China not under control of the National Government of the Republic of China” (U.S. Department of State, 2008).
U.S. Department of State. (2008). History of United States relations with China, 1784–2001. Retrieved March 4, 2009, from http://www.state.gov/r/pa/ho/pubs/fs/90851.htm
Source: Grasso, June. (2009). Sino-American Commercial Treaty. In Linsun Cheng, et al. (Eds.), Berkshire Encyclopedia of China, pp. 1985–1986. Great Barrington, MA: Berkshire Publishing.
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