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(THIS DOCUMENT IS THE PROFERT OF HIS BRITANNIC MAJESTY'S GOVERNMENT)

SECRET

C.P.(51) 96

30TH MARCH, 1951

CABINET

COPY NO.

31

DETENTION OF A CHINESE TANKER AT HONG KONG

Memorandum by the Secretary of State for Foreign Affairs and the Secretary of State for the Colonies

The Hung Hao, originally a Japanese oil tanker of 10.519 G.R.T. and an estimated speed of 17 knots, was sunk off Formosa in 1945 and was shown then as belonging to Tyugai Kaiun K.K.co. She was raised and taken over by the Chinese Aliens Property Administration, was towed into Hong Kong towards the end of 1948, where she has since been under repair at a cost to the China Tanker Corporation of over Hong Kong $8,000,000. Following a dispute about payment for repairs her moorings were cut and she was towed out of the dockyard in a fog, when she was intercepted by the Hong Kong Police. An action was brought against her master for shifting her berth without permission and a fine of 100 imposed. An interpleader action by the Dock Company for direction as to custody and ownership had to be withdrawn as the tanker was no longer in their possession.

The vessel has now completed all the necessary formalities and has applied for towage to take her to Canton.

2.

By exercising administrative delays the Governor of Hong Kong has arranged to defer her departure until after Monday, 2nd April. Thereafter he cannot detain her further except by use of his Emergency regulations, which in view of the grave implications referred to below he is strongly averse from doing. This vessel is, and will be claimed as, Chinese by the Chinese People's Government who are reported by His Majesty's Charge d'Affaires in Peking to be giving serious attention to the matter.

3.

The Secretary of State for Foreign Affairs is most anxious that this tanker should not be allowed to pass into the control of the Chinese People's Government on the following grounds:-

(a)

that we should do everything possible to deny this valuable asset

to the Chinese war potential in view of the fact that United Nations forces including our own are at present engaged in resisting Chinese aggression in Korea. (Oil is a major shortage of the Communist forces and the supply of oil under British and American control to China has been embargoed without reper- cussions.) The release of this vessel might evoke strong criticism in this country.

(b) that there would be a very strong anti-British reaction in the

United States if the tanker were allowed to go to China, which

Page 153iously prejudice relations with the Hited States with

repercussions which might go wider than Hong Kong.

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5.

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