5.
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Shanghai Municipal Council will still continue to possess all the powers conferred on them by the Land Regulations, they will still be subject only to the
jurisdiction of the Court of Consuls, and therefore
in the exercise of these powers they will enjoy the
protection of extra-territorial status. It is possible,
therefore, that it may not be so difficult as the
State Department is disposed to believe to reach some
agreement with the Chinese Government before the end
of the ten year period on the subject of the future
administration of Shanghai.
6. The Foreign Office view with considerable
concern the proposal of the State Department to abandon
in the last resort the reservation of Tientsin with &
view to securing the assent of the Chinese to the
remaining provisions of their Draft cf Article 16.
There are considerable British interests at Tientsin
and from the point of view of the general foreign
position in China Tientsin is comparable to, and stands second only to, Shanghai. His Majesty's Government therefore attach great importance to the reservation of Tientsin, if only for the comparatively short period
of five years. Such a breathing space appears to them
to be essential.. It was with great difficulty that
they secured the assent of the Chinese Minister for
Foreign Affairs to this provision in Article 16.
If
the same demand is strongly pressed by the United States Government, the Chinese Goverment will probably yield,
but if the United States Goverment show any sign of
weakening on this point there is little doubt that the
Chinese