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This treaty was intended by
neither side to stand alone, but to form
part of a comprehensive reorientation of
Anglo-Chinese relations on a basis of
equality. Difficulty was experienced as
regards procedure, British policy being to
proceed with the negotiation of a commercial
treaty, while the Chinese insisted that
extra-territoriality should next be
discussed.
A British draft was, however,
prepared and put forward in 1929 as the
basis of discussion which, for the most
part, concerned trade between China and
the United Kingdom. Hong Kong was,
however, closely concerned by Clause 18
of this draft, which was referred to the
Governor for consideration. It stipulated
that Chinese goods shipped from one
Chinese port to another via Hong Kong
were to be treated as if they had been
shipped direct so long as they remained
under