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no other places, except perhaps Macao and
Kwongc hauwan, are in a position to offer similar
concessions to those which China is now seeking to
obtain from Hong Kong.
To this Mr. Maze returned a counter-reoly
on the 18th October. He pointed out that the proposal
to delete Article V. did not mean a total withdrawal
of Inland Waters benefits from Hong Kong vessels
on the contrary, the Chinese Government had expressed
their willingness to concede the original Inland
Waters privileges to Chinese-flag vessels trading
to and from Hong Kong. "which at present cannot
function under Inland Waters Regulations". The
Inspector-General suggested that this arrangement
ought not to be regarded merely as a special concession
to Chinese merchants, because such an extension of
shipping facilities would promote the general
commercial interests of the Colony. As regards
the question of granting further concessions, he
was prepared to recommend that all the extra-Treaty
privileges now enjoyed by British trade in the Treaty-
ports of China should be conceded, where necessary,
to the Colony's trade.
"Furthermore", the letter
continued, "there remains, if I may be permitted to say
-
so, the question of 'friendly relations' this
point has not been specially stressed by the Nanking
authorities, but, nevertheless, it seems to me to be
a factor which, viewed politically, is closely
associated with the whole question. It is clear
that organised smuggling has now developed in South
China to an unprecedented extent and that China's
revenue