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1 Signed on May 2,1944; Entered into force at same date.
Whereas the Government of the United Kingdom of Great Britain a-
nd Northern Ireland, in pursuance of their policy of the closest
cooperation with China in the financial as well as in the Mili-
tary sphere in the war which they are waging against their comm-
on enemies, have decided to offer certain measures of assistance
to China;
And whereas the Government of the Republic of China (hereinafter
referred to as the Chinese Government), for the purpose of pros-
ecuting the war, desire to obtain facilities for the purchase of
material necessary for national purposes in China arising out of
the war and to provide for the cost of services in connection w-
ith such purchases and for the cost of other services required
for war purposes:
NOW, therefore, the Government of the United Kingdom and the Ch-
inese Government have agreed as follows:
1 The Government of the United Kingdom shall make available to
the Chinese Government, at the request of the Chinese Governm-
ent, sterling sums not exceeding in the aggregate £50 million
sterling for all or any of the following purposes:
(i) For payments during the war in respect of the purchase of
material necessary for national purposes in China arising
out of the war, being material which shall be produced or
manufactured in countries within the sterling area, and p-
urchased under contracts made by the Chinese Government b-
efore the termination of hostilities with Japan;
(ii) For the cost of services incurred in the sterling area in
connection with such purchases under contracts made by t-
he Chinese Government before termination of hostilities
with Japan;
(iii) For sterling backing to an internal loan to be floated
to the extent to which the use of this sterling would e-
nable the Chinese Government to withdraw from circulati-
on redundant purchasing power which could be brought in
only by this means, and so to help to check inflation.
Provided that (a) both Governments are agreed as to the
terms and conditions on which such a loan could success-
fully be issued, and (b) the sum so to be made available
shall not in the first instance exceed £10 million;
(iv) For the provision of rupee currency required by the Chin-
ese Government to meet the pay and local expenditure of
Chinese forces in India and Burma;
(v) For the cost of such other services for war purposes incu-
rred within the sterling area as the two Governments may
from time to time agree.
2 The method of making available the sterling for the purposes
referred to in subparagraphs (i), (ii) and (v) of paragraph 1
of this Article shall, unless otherwise agreed beween the two
Government, be that the Government of the United Kingdom shall
pay on behalf of the Chinese Government sums payable by the C-
hinese Government under the relevant contracts.
3 In this Article the expression "the sterling area" shall have
the meaning assigned to it for the purpose of the regulations
in force in the United Kingdom in regard to exchange control,
provided that, if the Government of the United Kingdom shall
at any time amend the definition of the sterling area for the
purposes of the said regulations, such amendment shall apply
to the definition of the sterling area for the purposes of th-
is Agreement as from the date of the notification of the amen-
dment by the Government of the United Kingdom to the Chinese
Except as may be otherwise agreed between the Governments, any
supplies for which orders or contracts have already been placed
under the terms and conditions of the Agreements of 18th day of
August, 1939, and the 5th day of June, 1941, shall continue to
be dealt with in accordance with the arrangements made under th-
ese Agreements.
The final determination of the terms upon which this financial
aid is given, including the benifits to be rendered to the Gove-
rnment of the United Kingdom in return, is deferred by the two
Contracting Parties until the progress of events after the war
makes clearer the final terms and benefits which will be in the
mutual interest. of the United Kingdom and China and will promo-
te the establishment of lasting world peace and security. In de-
termining the final terms and benefits, full cognizance shall be
given to the desirability of maintaining a healthy and stable e-
conomic and financial situation in China in the post-war period
as well as during the war, and to the desirability of promoting
mutually advantageous economic and financial relations between
the Governments of the United Kingdom and China and the betterm-
ent of world-wide-economic and financial relations.
In this Agreement the expression "termination of hostilities wi-
th Japan" means the signature of a general armistice or treaty
of peace (whichever is the earlier) with Japan to which the Uni-
ted Kingdom and China are parties.
In witness whereof, the undersigned, duly authorized for that p-
urpose by their respective Governments, have signed the present
Agreement and have affixed their seals.
Done in duplicate, in London, the second day of May, 1944.
(Signed) V. K. Wellington Koo (L.S.)
(Signed) Anthony Eden (L.S.)