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importance in the Far East, and no
conceivable industrial expansion can
compensate for its loss. Industry is
and remains a side-line, although an
important one.
The transit trade of Hong Kong
can be divided into (a) trade between
China and foreign countries; (b) trade
between Chinese ports; (c) entrepôt trade
between other countries, e.g., between the
United Kingdom or Malaya and Japan. A
large part of this trade owes its
existence to the free port facilities of
Hong Kong, and it is essential that the
substance of these should be preserved in
any Customs Agreement with China. This
was provided for in the final draft
Customs Agreement of 1930.
That draft reached its final
form after protracted negotiations and
after all relevant commercial interests
had been consulted, and probably forms
the best basis for renewed discussions.
The