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reason, why all the China firms at home insist on the need
for an agreement being made between the Hong Kong Government
and the Chinese Customs without further delay, is that
without such an agreement there is every chance of continuous Anglo-Chinese friction, which will re-act on British interests
and British trade not only all over China but in this country,
and that with it we shall have done something pleasing to the
Chinese Government and incidentally in many ways directly
advantageous to Hong Kong as a port, which will promote amity
and further trade between the two nations"
I quite agree with these views, as from a business
point of view the relations of Hong Kong with China are at least
as critical and important as those of the International settlement
at Shanghai. It is impossible to get away from the fact that
Hong Kong has prospered and supports a very large population,
because it is the natural port of South China. The continuance
of that prosperity depends on Hong Kong being in the closest
commercial relations with China, even if it involved in the
last resort going within their tariff wall. The claims of
Hong Kong born Chinese and Chinese owned Hong Kong registered
ships to extra-territorial privileges has been one of the.greatest
sources of friction between Britain and China, and the smuggling
problem is now making things worse. If this is not remedied
it will cause deliberate discrimination against trade with Hong
Kong, to which it will be almost impossible for the Foreign
Office to object.