MACAO.
(Previous reference: Cabinet 16 (35) Con- clusion 3).
Report of Chiefs of Staff Sub- Committee.
SECRET
R
44111
For record in the Dept.
Est Boyd.
28.3.35
Extract from Conclusions of Cabinet 17 (35) held on Wednesday, 27th March, 1935.
1. The Cabinet had before them the following documents
on the subject of the Japanese offer to the Government of the
Portuguese Colony of Macao to buy a large concession there,
including the development of a new port: -
A Report by the Chiefs of Staff Sub-Committee (C.P. 68 (35)), furnished in accordance with the Conclusion referred to in the margin, reviewing the strategic, political and economic implications of the Japanese offer, which were closely inter- locked. The Chiefs of Staff had reached the con- clusion that it would be to our great disadvantage on all grounds that Japan should obtain any con- trolling interests in Macao, and as a result of consultations with the Foreign Office and Colonial Office they submitted for consideration that in the first instance His Majesty's Government might review the possibility of an approach to the Portuguese Government, with a view to that Govern- ment itself taking steps to prevent the intrusion of Japanese interests in the Macao Concession:
A telegram from the Governor of Hong-Kong to the Secretary of State for the Colonies, dated March 15, 1935, together with a Note prepared in the Colonial Office (C.P. 67 (35)), both of which had been under consideration by the Chiefs of Staff Sub-Committee.
A view was expressed that, on the commercial
side, the more the question had been looked into the less was
the disadvantage found to be. Coasting trade would merely pass
up the coast and the river. Transhipment trade was still likely
to come to Hong Kong owing to the immensely superiod facilities
of all kinds, and even if a harbour capable of taking 5,000-ton
Y
ships