This Document is the Property of His Britannic Majesty's Government.
AFFAIRS OF CHINA.
CONFIDENTIAL.
3393 [December 31.]
Rec Red 20 JAN 08 SECHOS
[42673]
No. 1.
India Office to Foreign Office-(Received December 31.)
Sir,
India Office, December 30, 1907.
I AM directed by the Secretary of State for India in Council to acknowledge the receipt of your letter of the 9th instant, forwarding print of a telegram from Sir J. Jordan to Sir Edward Grey on the subject of the proposed restriction of the import of foreign opium into China.
2. With reference to the statement made by the Chinese Government that the average annual import of Indian opium into China during the five years 1901 to 1905 was 42,327 chests of 120 catties (160 lbs.) each, according to the Customs Returns, I am to explain that the 51,000 chests mentioned in my letter dated the 29th May, 1907, as the annual average export from India to China represent the number of chests consigned from Indian ports to Hong Kong and to Treaty ports in China. The Chinese Government are correct in their statement that the imports of Indian opium into Treaty ports averaged only 42,827 chests for the five years, according to the Returns of the Maritime Customs. The difference between the two sets of figures is due to the position occupied by Hong Kong as an opium entrepôt for the Far East. It is possible that all the opium which enters China from Hong Kong does not come under the cognizance of the Maritime Customs. For the purpose of the proposal made by Mr. Secretary Morley that the Indian opium trade with China should be reduced by means of a restriction enforced in India on the total export of opium from India to all countries beyond seas, and that no direct limitation of imports should be applied by China in the Treaty ports, a rate of reduction based on an assumed export of 51,000 chests to China would be more favourable to the policy of the Chinese Government than a rate based on the recorded import of 42,327 chests.
3. It is not clear from the telegram whether the Chinese Government have accepted what Sir J. Jordan, in his letter to Prince Ch'ing dated the 12th August last, termed the "counter-proposal of His Majesty's Government." It might be inferred from their wish to base restriction on a standard of 42,327 chests that they desire to obtain power by Treaty or Convention with His Majesty's Government and other Treaty Powers to impose direct limitation on the import at the Treaty ports, and that, starting from this standard, they would reduce by one-tenth per annum the amount of Indian opium permitted to enter China through the Treaty ports.
4. I am to suggest that inquiry should be made of His Majesty's Minister as to this point. I am to say that, if the Chinese Government prefer to obtain power of direct restriction by means of Convention or Treaty, Mr. Secretary Morley sees no objection. The counter-proposal was made as a simple, expeditious way of indirectly reducing the amount of Indian opium available for the China market, which could be put into effect by the Government of India without the necessity for negotiating a Convention which would require to be accepted by other Powers before it could be operative.
5. If the Chinese Government prefer the method of direct restriction, it must be understood that the counter-proposal would drop, and that the Government of India would be free to regulate the production and the export of opium in accordance with their estimate of the requirements of the world generally. In so doing, they would, of course, have regard to the reduced requirements of China, but they would be unable to control the ultimate destination of such stocks of opium as might, within the limits fixed by them, be exported from India, inasmuch as any restrictions which they might lay down could be evaded by shippers consigning, for instance, to ports out of China and subsequently altering the destination of their consignments.
6. I am to inclose the draft of a telegram, the substance of which, if Sir Edward Grey sees no objection, might be communicated to Sir J. Jordan.
I am, &c.
(Signed) COLIN G. CAMPBELL.
* See telegram to Sir J. Jordan, No. 2, January 4, 1908.
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