Report, Zhou Enlai to Chairman Mao

Chairman Mao [Zedong] and the Central Committee:

On September 1 after the telegram about rubber, we had a discussion at the invitation of the Soviet delegation to continue commercial talks. Comrade Molotov proposed a draft China-Mongolia-Soviet Union draft agreement on rail transportation. The main points of the draft agreement include:

[1.] The two sides make repairs according to the gauge of the railway;

[2.] Repairs should be completed by the end of 1955;

[3.] Once repairs are completed, the two side will need to make an additional agreement on rail transportation.

During the exchange of opinions, the comrades of the Soviet side recognized that the rail transportation should be carried out on the basis of equality and equal benefits for both sides. We are examining the draft agreement now and once we have studied it, we will send you another telegram and ask for instructions.

As for the exchange of letters on the Lüshun Port and the two agreements on the Changchun Railway Communique, we have already formally notified them that we agree and now are in the final stage of editing the text.

As for the rubber issue, we brought up two difficulties and exchanged opinions about how to resolve them. First, we explained that the annual purchases we make of 15,000 to 20,000 tons of rubber which we purchase on behalf of the Soviet Union may be impeded by the trade sanctions and we may not be able to fulfill the agreement and even violate the agreement. We are willing to strive to get more rubber imports but it would be better if the agreement does not specify a certain quantity of rubber.

They were, however, unwilling to remove the stipulation on the quantity of rubber delivered. They stressed time and again, that we will be able to import rubber, adding that they have assumed many heavy responsibilities on our behalf and also face many practical difficulties in fulfilling them. They are, however, determined to overcome those difficulties and if somehow they cannot fulfill them, they will certainly inform us.

Their meaning is that the stipulated quantity to be delivered cannot be deleted from the agreement and that we should strive hard to fulfill it. Only if sometime in the future there really is some obstacle that cannot be overcome will there be some margin for negotiation.

After we got back to where we were staying, after some discussion, we decided that there were two ways to resolve this:

1. We again propose that an additional phrase be added to the original text “except if insuperable objective obstacles arise”;

2. If they still don’t agree, then agree to the text as it stands, but when we announce our agreement add an oral clarification, we will explain that we will do all that we can to fulfill the agreement but if insuperable practical obstacles should arise, please permit us to raise them for your consideration.

Next, with regards to the issue of lead, they agreed that to determine the time and quantity of exports according to our actual production.

We request that the Central Committee, once it has reviewed the original texts, to please advise if it agrees with the opinions of this and the previous telegram.

Zhou Enlai

September 1 at 2200