Reopened Door

Needy China wanted foreign goods; foreign traders wanted to re-enter the vast Chinese market. But China's great ports stood idle except for a trickle of coastal trade. Last week the Chinese government took a belated, essential step to make it possible for the world's traders to buy goods from China and sell goods there.

China's Central Bank abandoned the official exchange rate of 20 Chinese dollars to one U.S. dollar. On the spot in China, before the change, one U.S. dollar could buy up to 3,000 dollars in Chinese currency. But traders elsewhere in the world could not (except at the prohibitive official rate) get Chinese dollars to make purchases in China, nor could Chinese traders get foreign currency for export to buy goods abroad. Under the new regulations, 27 Shanghai banks are licensed to buy and sell dollars on the open market. The new rate found its level at about 2,000 Chinese dollars for one U.S. dollar. With the new privilege, new regulations (similar to those in Britain) went into force, prohibiting Chinese from wasting their country's limited dollar resources by buying anything but necessities.

Stabilization of the Chinese currency was yet to come, but the Central Bank's move, reopening world trade with China, was a heartening landmark in China's recovery from over ten years of war and occupation.

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