GR 500

SECRET

SECRET

FI WASHINGTON 082234Z NOV 32

TO IMMEDIATE "FCO

TELEGRAM NUMBER 3602 OF 8 NOVEMBER 1932

HKK

околу

COPY

in. Pasalu

INFO IMMEDIATE PEKING (PERSONAL FOR AMBASSADOR) HONG KONG (PERSONAL FOR GOVERNOR)

YOUR TELNO 1890: FUTURE OF HONG KONG

*CCOMPANIE

127

Repected to Ammon with Washington

1. ACCOMPANIED BY DONALD, I CALLED ON SHULTZ ON 5 NOVEMBER AND SPOKE AS INSTRUCTED. SHULTZ THANKED US WARMLY FOR HAVING TAKEN HIM INTO OUR CONFIDENCE AND GAVE ME HIS ASSURANCE THAT KNOWLEDGE OF OUR CONVERSATION WOULD BE HANDLED ON A STRICT NEED-TO-KNOW BASIS. HE SAID THE UNITED STATES WAS CONCERNED ABOUT THE FUTURE OF HONG KONG AND THE PROBLEM HAD A PERSONAL DIMENSION FOR PEOPLE LIKE HIMSELF WHO KNEW IT WELL: IF THE CHINESE BELIEVED THAT CONFIDENCE IN HONG KONG COULD BE MAINTAINED WITHOUT THE BRITISH LINK THE CHINESE DID NOT UNDERTSTAND WHAT CONFIDENCE WAS.

IN

2. SHULTZ SAID HE WOULD BE GLAD TO GIVE US ADVANCE NOTICE OF IMPORTANT VISITS TO HONG KONG WITH A VIEW TO OUR PROVIDING BRIEFING. HE HIMSELF WOULD BE GOING TO CHINA IN LATE JANUARY OR EARLY FEBRUARY. HOWEVER, THE UNITED STATES WOULD HAVE TO CONSIDER CAREFULLY WHAT HELP THEY COULD GIVE US, BECAUSE THEY COULD DO OUR INTERESTS MORE HARM THAN GOOD. IN HIS VIEW, WE SHOULD KEEP WELL AWAY FROM ANY PARALLEL WITH TAIWAN. AT A MINIMUM HE THOUGHT THAT,

THE IF ASKED OR GIVEN AN OPPORTUNITY TO COMMENT BY THE CHINESE, 'AMERICANS SHOULD TRY TO TACKLE THEIR ASSUMPTION THAT THEY COULD MAKE MAJOR CHANGES STILL AND MAINTAIN BUSINESS. THE HONG KONG PROBLEM WAS QUITE DIFFERENT FROM WHAT THE CHINESE WERE USED TO, THAT GOVERNMENTAL ACTION WOULD NOT BE THE DETERMINING FACTOR. THE MARKET HAD ALREADY CONVEYED A SIGNAL TO THE CHINESE, WHICH MIGHT NOT BE AN UNHELPFUL THING. THERE WAS THEN SOME DISCUSSION AS TO WHETHER US BUSINESSMEN IN HONG KONG COULD BE USEFUL TO US IN GETTING THE MESSAGE OVER TO THE CHINESE. SHULTZ THOUGHT THAT IT WOULD BE NATURAL IN ANY CASE FOR AMERICANS VISITING PEKING TO ENQUIRE ABOUT CHINESE GOVERNMENT INTENTIONS. WE NOTED HERE THAT THIS MIGHT RAISE DIFFICULTIES FOR MAINTAINING CONFIDENTIALITY. WE ALSO MENTIONED THAT THE CHINESE BELIEF THAT BRITAIN MADE A LARGE PROFIT FROM HONG KONG WAS QUITE MISTAKEN, BUT INDICATIVE OF THEIR MISUNDERSTANDING OF REALITY.

tel 3603

for Secretory

of State's porty.

See/133

134

/137

146

کنا

Repested

Amation as

FCO te 297

of 4/4/

24

SECRET

/3. SHULTZ

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