FINANCES OF CHINA

Poverty Bay Herald, Volume LXVI, Issue 19884, 10 March 1939, Page 5

FINANCES OF CHINA

PROVISION OF £10,000,000 BRITISH BANKS FIND HALF G OVERNMENT GUAR ANTEE (Elec. Tel. Copyright—Unitod Press Assn.) (British Official Wireless.) Reed. 9 a.m. RUGBY, March 8. In announcing in the House of Commons to-day that the Government had agreed to give a guarantee of £5,000,000, which would enable the Hong Kong and Shanghai Bank and the Chartered Bank to participate m the stabilisation fund for the support of Chinese currency, the Chancellor of the Exchequer, Sir John Simon, said that the stability of the Chinese dollar was a matter of great importance to Britain in view of her financial and economic relations with China. “China has achieved considerable success in her efforts to maintain the convertibility of Chinese currency for trade transactions to the limit of its depreciation in exchange against, sterling and to keep the rate reasonable for many months,” continued Sir John ’Simon. “China has informed Britain that it intends to continue its existing monetary policy and that as part of that policy it desires to establish a stabilisation fund of £10,000,000 m addition to its other reserves. Subscription Invited

“China has invited the two Chinese Government banks to subscribe a total of £5,000,000 lo the fund and the two British banks, the Hong Kong and Shanghai Bank and the Chartered Bank, to subscribe a further £5,000,000 between them. The British banks have agreed to subscribe these amounts subject to xeceiving an undertaking from the Treasury to reimburse them for any loss that- might be incurred when the fund is wound up.”

The arrangement would be that the fund would operate for 12 months, but it could be continued for a furthei period of six months by agreement. If the necessity arose, however, the fund could be wound up at any earlier time.

Britain would welcome the establishment of this stabilisation fund, the successful working of which would be of material assistance to British tiade and enterprise in China, and the Treasury had agreed, subject to leg . - lative approval, to give to these banks the guarantee against loss tor whicn they asked. A hill was being prepared and he hoped to present it early next week. _______