[This Document is the Property of His Britannic Majesty's Government.]
CHINA.
CONFIDENTIAL.
No. 1.
March 12, 1929.
SECTION 1.
43
F 1088/11/10]
Sir Austen Chamberlain to Sir M. Lampson (Peking).
(No. 295.) Sir,
Foreign Office, March 12, 1929. WITH reference to Lord Cushendun's despatch No. 696 of the 9th August last and subsequent correspondence on the subject of a commercial treaty with China, I transmit herewith the draft of such a treaty,* which has been prepared by the Board of Trade in consultation with the Foreign Office, and which has received the concurrence of the other Departments concerned.
2.
The general principles upon which the draft is based are explained in the "Note on the proposed Anglo-Chinese Commercial Treaty," a copy of which, together with the first draft of the proposed treaty prepared by the Board of Trade, was transmitted to you in my despatch under reference. This note should now be read. subject to the modifications necessitated (1) by the signature of the Tariff Autonomy Treaty of the 20th December last, and the consequent abandonment for the present, at least, of any endeavour to obtain conventional schedules of tariff rates, and (2) by the fact that the draft in its present form does not deal with the question of extra- territoriality, but aims at leaving the extra-territorial rights of British subjects so far as possible in statu quo.
3. China has not yet arrived at the stage when she is prepared to grant freedom to foreigners to reside, trade and acquire property throughout her dominions; nor would it serve any useful purpose to claim such a right, and at the same time claim exemption for British subjects from Chinese law and jurisdiction. We are, however, prepared to grant this right to Chinese citizens in Great Britain. Consequently it may be possible to secure a measure of real equality and reciprocity by balancing the complete freedom which we give to Chinese to trade anywhere in Great Britain, subject to the jurisdiction of our courts, coupled with the right to enter, travel, reside and acquire property, subject to conditions and regulations applicable to all foreigners, against a right to reside, trade, &c., limited to certain places, but not subject to Chinese alien restriction regulations and coupled with the maintenance of extra-territoriality. In this connexion I have to call your attention to article 4 of the enclosed draft. For the reasons just stated, this article will probably not be acceptable to the Chinese Government, but there may be an advantage in retaining it in the draft, because the Chinese Government in rejecting it will have to admit that they are not in a position to give to British subjects and ships in China treatment equal to that which His Majesty's Government are prepared to give to Chinese citizens and ships in this country. It is left to your discretion, however, whether or not the article should be included in the draft as presented by you to the Chinese Government. His Majesty's Government see no objection to the omission of article 4, provided that the Chinese Government accept articles 6 and 7, which together with article 5 have been specially drafted to meet the situation.
4. Article 8 differs from the common form in two respects. A phrase taken from the Sino-Austrian treaty has been added relating to books and correspondence, and the usual clause prohibiting domiciliary visits and search of premises, except under conditions applicable to natives or to nationals of the most favoured nation, has been omitted with a view to avoiding any discussion in connexion with the proposed commercial treaty of the extra-territorial rights and privileges of British subjects. His Majesty's Government hope to preserve these rights and privileges intact for the time being, reserving discussions on the subject of extra-territoriality until after the negotiations for the commercial treaty have been brought to a successful conclusion. For the same reason the usual provision for the same legal protection as nationals has been omitted from article 9, which otherwise is practically the stock form. You will notice that the words "in fact," which were employed in the treaty alteration proposals of January 1927, have been introduced into this. article as also into the second paragraph of article 11.
5. Article 10 is the common form of a general most-favoured-nation clause except that it applies also to companies (vide paragraph 7 below).
[734 m- 1
* February 28, 1929, Section 2.