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goods ex-exported in their original packages within three
years of the date of importation received, on complying with
certain formalities, drawback certificates entitling them to
a refund of the import duty paid at the port of entry into
China. A similar privilege was accorded to native goods
re-exported abroad within one year from the date of importation
in respect of coast trade duty paid at Shanghai or other port.
The term "re-exportation abroad" was held to apply not merely
to foreign countries, but also to the ports of Dairen and
(until its restoration to China) Tsingtao, as having a foreign
status. With the abolition of the Coast Trade duties, the
need for drawbacks on native cargo re-exported abroad
disappeared, and the Chinese Government decided to withdraw
also the similar privilege hitherto accorded to foreign imports.
As regards the effect of this withdrawal on foreign trade generally, enquiries made by the Commercial Counsellor to this Legation amongst Shanghai merchants led to the conclusion that
it was not likely to be serious; no very great importance
appeared to be attached to the abolition of the drawback
system, the position being apparently that re-exports of duty-
paid cargo to foreign countries were negligible. While
I have no information ar to the particular position of Hong Kong in regard to this point of the re-export abroad of foreign imports, it would not seem therefore that the elimination of the provision for such drawbacks in Article
XVI (d) is likely to have any serious consequences.
I have the honour to be,
Sir,
Your Excellency's obedient servant,
(Sd). E.M.B. Ingram.
In the absence of H.M. Minister.