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even though the passage involves "transhipment, warg-
housing, breaking bulk, or change in the mode of trans-
port"
The contract is required to be produced to the
Hong Kong authorities as evidence of the in transit
status of the munitions, but once they are satisfied
on this point they are precluded from making any further
investigations and the peruits which the Hong Kong
regulations pro forma require cannot be refused. The
onward passage from Hong Kong to China of munitions or
any other goods ordered in China from countries beyond
Hong Kong is not regarded as a "direct expert to abroad" ;
it is not even an expert or re-export at all in the sense
in which those terms are commonly used in commerce.
As regards munitions imported into Hong
Kong on consignment, no re-exports to China are allowed
without the production of a huchao from the Ministry of
Var at Nanking, and this rule is applied both to muni-
tions from the United Kingdom and from other countries.
In practice, however, apart from occasional samples,
ars in this category are not re-exported to China.
The Hong Kong Government add that the
possibility of such "on consignment" munitions being
smuggled out of Hong Kong into China in defiance of the
decision of the Hong Kong Government is very remote. Not
only are stocks of any magnitude required to be kept in
the Government depôt, but the stocks held and sales
/ made