Extract from Summary enclosed with Weekly letter from G.^.C. China Command, to D.M.0.4 I., No. 400
dated 1.2.55.
137
1.
JAPANESE ACTIVITIES IN SOUTH CHINA.
(a) MACAO: Effort to increase commercial footing.
A Japanese dentist in MACAO, one Dr. WADA, strongly suspected of being a naval surgeon and a secret service agent, has made a firm offer to the Macao Government to take over the Vacao Vaterworks, which are in considerable financial difficulties, on any terms the Government care to propose If this Japanese offer is accepted they (the Japanese) would also arrange a service of cargo boats to MACAO and assist in industrialisation.
VADA has also in recent months made proposals that Japanese should erect an alcohol plant and a sugar refinery, and that they should take over the Green Island Cement Company Macao plant.
Whereas previously Macao had been ignored by the Japanese, there have been three visits of Japanese destroyers during the past year, and a large influx of Japanese visitors.
The Macao Vaterworks belonged to a Company but this got into such a bad financial state that although the Company was not bankrupted or dissolved, the Macao Government took over the operation of the works.
An Englishman and his associates have made an offer to the Macao Government to take over the Waterworks and run them as a Portuguese Company (necessary under Fortuguese law), this Company to be under a British holding Company registered in Hong Kong. The difficulty is to find the necessary funds, about H.K.21,500,000. The Hong Kong & Shanghai Bank will not advance this money without a guarantee either from the Hong Kong or H.M. Government.
The Governor of Macao is believed to be anti-Japanese, and an Englishman proceeded to Hong Kong to lay information before the Trade Commissioner at the urgent request of the Macao Government. The Governor fears he may have to accept the Japaneas offer in connection with the present negotiations going on between Japan and Portugal for a commercial treaty.
COMMARNA:
Reliable: H.M. Trade Commissioner, Hong Kong.
H.M. Consul-General, CANTON, is in possession of all the above information. The waterworks are close to ground which can easily be made into an serodrome.
(D) CANTON: New port at HONAW: Japanese bid for control.
The Mayor of Canton has informed the Manager of the Asiatic Petroleum Company that an offer has been received from the MITSUI BUBSAN KAISHA and SOUTH MANCHURIAN RAILWAY to purchase the whole of the site of the new inland port at CANTON, and that civil authorities are anxious to refuse this offer but nervous of what the military may do if offered several million dollars cash. The Mayor has suggested that some British firm should advance $500,000 and received a "red deed" for essential portion of property and that an agreement be made for subsequent redemption, i.e. in effect a legal mortgage.
Consul-General, Canton.
26th January 1955.