33.
120
To Shanghai Tel.No. 366 Dec.2.1929 (p.25 in 5Y).
Position of Macao. Interview with Portuguese Chargé. (p.27 in byT
illicit entry of salt (it will be remembered
that the question of control of the illicit salt
traffic was the main reason why the Chinese de-
sired the agreement originally). A new article
(Article 10) was also introduced giving Hongkong
manufactures privileged factory treatment in China.
Article 9 was re-cast to give further privileges
regarding goods transiting Hongkong. These various
amendments were not considered an excessive quid
pro quo in view of the extraordinary privileges
to be granted to the Chinese Customs, which were
fraught with an appreciable measure of danger to
the administration of the Colony. On receipt of
this despatch the Minister telegraphed to Shanghai
asking the opinion of the Chamber of Commerce as
to what effect rigid insistence on Article 5, and
its certain refusal by the Chinese, would have on
British shipping interests in China generally, and
suggesting deletion of this article altogether, in
view of a prejudice to our commercial treaty nego-
tiations if we accepted the Chinese version. His
Majesty's Minister feared that the extension of
privileged factory treatment to Hongkong would only
increase the feeling in China of the assimilation
of Hongkong to a Treaty Port. In view of the
probable seriousness of the smuggling problem,
would it not be as well to conclude the agreement
without either Article 5 or Article 101
34. The Minister saw the Portuguese Chargé
d'Affaires on the subject on December 6th, and
gave him an account of the present position of
/the