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(a)
C
A policy of economic pressure is likely to prove an ineffec-
tive instrument for bringing the Chinese to more moderate
policies; it would encounter strong opposition from other
Government departments; and it could be considered only if
Ministers were to think it essential to demonstrate to public
opinion in this country that we were taking firmer action
against China.
(0) In the present circumstances, any attempt to apply economic
pressures would not be right.
BACKGROUND AND ARGUMENT
4.
From the outset of the present crisis in our relations with
China, we have kept the possibility of economic pressure under conti-
nuous review. But we have always come to the conclusion that such
pressures would be ineffective against the Chinese. My submission
of 21 March on Sino-British relations summarised the position in
the following terms:
"Threats to stop trade from the United Kingdom would not
modify the Chinese attitude, and loss of trade would be harmful
to us here. Economic measures in Hong Kong directed against China
would hurt the Colony more than the Chinese."
This was approved by the Secretary of State at an Office meeting
on 26 March.
5.
The possible forms of economic pressure suggested by Sir D.
Hopson were these:
(a) Prevention of the Chinese from chartering ships in Britain
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../ The Board