China's Plan

China is still too busy pitting flesh & blood against a mechanized enemy to set off any fanfares about her postwar business plans. But China is looking to the future. From Washington this week came news of one blueprint already completed: a full-blown, carefully planned program for a five-year plan of industrialization.

The program was drawn in the U.S. But it has already been examined and approved by 300 of her technicians and by Economic Minister Wong Wen-hao. It has also been O.K.'d by Generalissimo Chiang Kaishek.

China's plan was born late in 1943, when Lauchlin Currie, then acting deputy administrator of the Foreign Economic Administration, sat down to discuss it with FEA's electric, little, British-born chief engineer, Alex Taub. Taub had just completed a ten-year industrialization plan for Brazil. Said Currie: "China's alive. Why not do one for China?"

Canvass of Industry. Taub and his FEA engineers went to work, made their first stop in the front office of U.S. industry. To one leading company in each of 52 basic industries, they posed this question: how much would it cost to put an economically feasible unit of your industry in China, capable of affecting China's economy nationally?

Such companies as Baldwin Locomotive Works, Giddings & Lewis Machine Tool Co., H. K. Ferguson Co. and American Cyanamid supplied FEA with detailed specifications.

The engineers knew what they wanted. They were seeking the basic, minimum parts of an integrated industrial system. Put together, the individual parts would give China a fundamental industrial plant from which greater variety and specialization could grow.

Broadly classified, the program was broken down by Taub's engineers into six sections:

1) Mining and Metallurgy;

2) Chemical and Basic Processing;

3) Manufacturing;

4) Processed Foods;

5) Agricultural Foods;

6) Commercial Power. The first five sections include 625 plants, commercial power accounts for another 260 units, laid out in detail.

Backbone of Steel. Under Taub's plan, China's industrialization program is fixed to her blueprinted steel units. As planned, they will ultimately produce about 2 1/2% to 3% of the U.S. 1940 production of 67 million tons. All other industries are similarly designed to turn out about 2 1/2% of the production of their U.S. models.

When the plant system--steel and all--is in production, China will be able to manufacture an impressive range of products, e.g., steel ingots, rolled shapes, aluminum, sulphuric acid, coal tar, alcohol, gasoline, fertilizers, electric motors, tires and tubes, light bulbs and bicycles.

Deliberately, Taub left transportation from the program, to be planned separately. But the industrial program provides for part of the equipment needed to expand transportation in China. The plan includes cement plants, locomotive and freight-car shops, and factories to make earth-moving equipment. It also plans to locate many industries at Jap-held centers like Peiping and Tientsin.

Off to Headquarters. The plan was in its final form when Washington began to talk of a Donald Nelson trip to China. When Nelson boarded his plane, Taub went along, expecting, at best, only a show of interest by the Chinese. So he was agreeably surprised when Chiang Kai-shek said: "Show it to our experts."

In his wrinkled blue suit, Alex Taub worked day after day explaining his program to groups of Chinese technicians. Some of their revisions he accepted, others he fought. He was glad to find the Chinese willing to supply some $300 million in materials and labor. But that did not surprise him. Like any engineer in similar circumstances, Taub had never seen any obstacle to financing a program costing nearly $1 billion. He figured that long-term loans from the U.S. would be a good investment. Furthermore, the plan was designed to increase China's capacity to pay, spur modernization of her merchandizing methods for age-old exports.

At last the 300 technicians were satisfied. They made their report and the documents reached the top again. Said Chiang Kaishek: "This is our plan for the next five years." Then he ordered the work to start. But until the Japs were driven from China, most of the work would be planning and hoping.

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