40
and would
to reduce Hong Kong's powers of competition with Shanghai
in such matters as shipping repairs and port services
generally, for which there is always keen competition.
It would also reduce the competitive powers of Hong Kong's
ies
manufacturing industry, both in China and still more in
fore
reign countries, by revising the cost of certain raw materials, Merely to some
Other Implications of a Customs Union. stat Extent countract, the advantage refoner 5. to at the beginning of paragraph 7.
بز
Politically, a Customs Union must mean some loss
of sovereignty and must strengthen the tendency of
Chinese politicians to assimilate the position of Hong
Kong to that of a treaty port and to look forward to an
eventual time when Hong Kong as well as the treaty ports will
revert to the full control of China.
10. It has been assumed that purely administrative
difficulties, although considerable, could, with goodwill,
be surmounted; but an extremely difficult politico-
financial problem would arise. On what basis would the
revenue collected in Hong Kong be divided between the
Colony and China? That might be theoretically capable
of solution, but it is certain that the position would give rise to endless wrangling, as it is impossible to say precisely how much of Hong Kong's imports are intended for consumption
in the Colony.
II.
as
in ship attached
The Alternative of a Customs Agreement.
11.
On balance, therefore, it seems improbable
ގ
that a full Customs union would be in the Colony's interests The two things Hong Kong wants from China are free entry for
Hong Kong manufactured goods and increased facilities for
the conduct of Chinese coastal trade through Hong Kong. The
first is not likely to be conceded except at an extortionate
price; the second might well be obtained as part of an
I even if it
were thought to be
discable, there are grave doubts whether it could be effected.
agreement
6
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