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Summary.
20. It would be to our great disadvantage on all grounds
that Japan should obtain any controlling interests in the
Portuguese concession of Macao. On strategic grounds the
main danger to Hong Kong is air attack by shore-based air-
craft, and if Japan become established in Macao in time of
peace sho would be able to create an air base within forty
miles of Hong Kong for use in war without violating Chinese
neutrality. There are other sites within striking distance
of Hong Kong from which shore-based aircraft could be
operated, but they are at present unprepared and undeveloped
and, moreover, are on Chinese territory, and there might
therefore be difficulties in Japan taking any action in
time of peace.
21. If Japan was to establish herself in Macao it would
be necessary to review the cxisting scale of air and ground
defences in Hong Kong, because unless we were strong enough
to neutralise completely any Japanese air forces located at
Macao, severe damage could be inflicted in time of war on installations at the naval base, and the use of the anchorage
The difficulties in might be denied by air action alone.
relieving the fortress, if attacked, would also be
materially increased. In addition it would assist in
establishment of air superiority in connection with a
landing.
The fleet in Hong Kong harbour would also be vulnerable
to Coastal or other motor boat attack from Macao, a distance
Defence of 40 miles across comparatively sheltered water. against this form of attack would be difficult and costly. 22. From an economic aspect it is undesirable that Japan should acquire a concession which might provide her with an outlet to South China, and thus be in a position to operate
in direct conflict with our commercial interests in Hong
Kong. In any case the extension of Japanese influence in Central or South China, which could only be at our expense,
Political and commercial is strongly to be deprecated.
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