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Government, on the lines of the recent credit to the
Soviet Government, for financing railway equipment or
public utility contracts entered into with British firms.
Such a credit would be of special value in regard to
railway equipment orders. Apart from large contracts,
the possibility should be explored of export credits
facilities being made available for ordinary trade goods,
e.g. textiles, and also of guarantees being granted to
British Merchants in China, instead of only to exporters
here. I cannot emphasise too strongly the importance
which I attach to the question of export eredits on which
depends the main possibility of expanding our export trade
to China. I am very glad to hear that the Export Credits
Guarantee Department has arranged to send out a special
representative to China and I hope that he, working
in conjunction with the Commercial Counsellor at Shanghai,
will be able to frame a satisfactory system which will
enable guarantees to be arranged locally and promptly for
all suitable projects.
(6) Railway Loans.
China also needs long-term capital for
development purposes, particularly Railway construction.
Until recently, any such loans were out of the question
owing to the defaults on many of the existing loans.
During my stay in China, the Chinese Government arrived
at settlements of several of the British Loans in
default and made offers, in the other cases, which in my
opinion were reasonable and should be accepted. The
door, is therefore, open for new financing and a small
loan, for the completion of the Hangchow Ningpo
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