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took me on one side and told me that the mayor was anxious to seize the opportunity of my presence and the prevailing atmosphere of goodwill to attempt a further concrete advance in the direction of co-operation and indeed to mark the occasion by some definite achievement. His honour had in fact commissioned him to accompany me to Hong Kong to discuss and come to some decision on the following specific points :-
(1) Establishment of an informal liaison committee between Canton and
Hong Kong;
(2) Extension of the scope of British collaboration in Chinese development
schemes; and
(3) Collaboration in connexion with the Whampoa port scheme.
6. I must confess to having been somewhat taken aback by these proposals. I was not at all sure that the first item would be well received by the Hong Kong Government; as regards the second item, development schemes could only be discussed individually and on their merits, general discussion would lead nowhere: as regards the third, I felt that the mayor had leapt at a chance to try to extricate the Chinese from the dilemma with which they are faced as a result of their decision to develop the Whampoa port (namely, how to build a port intended to compete with Hong Kong without antagonising us) by reading con- siderably more than was intended in my purely personal suggestion reported above. I could not help feeling also that the mayor, in thus forcing the pace, was not unmindful of the possible effect on his own political ambitions. On the other hand, any coolness in my reception of the mayor's advances at this stage seemed likely to neutralise the good general effect which I hoped to produce by my visit to Canton.
7. On arrival at Hong Kong I discussed the whole matter at length with his Excellency the Governor and Mr. Pelham. Sir Andrew Caldecott felt, like myself, that the Kwangtung authorities and the mayor in particular were exploiting co-operation with us for their own political ends: if all the Chinese really wanted was our economic assistance, it was not necessary to make all this fuss about it if they brought us practical schemes, they could be discussed on a practical basis: we had the necessary machinery of contact available, though it could undoubtedly be strengthened along unofficial lines. Sir Andrew felt that, as responsible for the interests of Hong Kong, it was impossible for him to have anything to do with the Whampoa scheme. We agreed, however, that since the Chinese would in any event take some steps towards the development of that port, if only for the sake of carrying out the wishes of Dr. Sun Yat-sen, the best line to adopt was that the decision whether or not to develop the port was a matter for the Chinese themselves, but that, while we would do nothing to prevent the construction of the port and would certainly not regard it in any sense as an unfriendly act, we considered the scheme to be unnecessary and uneconomic, and since it would inevitably compete with Hong Kong we could hardly be expected to collaborate in making it successful.
8. His Excellency and I eventually sent for Colonel Li Fong and spoke to him on these general lines. A copy of the minute of this interview is enclosed.(') 9. You will observe that, in discussing the question of Whampoa, Colonel Li Fong endeavoured to introduce considerations of a decidedly political and tendencious character. I would invite attention particularly to his remark that the Chinese were anxious that antagonism with us should not arise over the Whampoa port development scheme, since in the event of war with Japan they would have to look to us to facilitate the import of military supplies through Canton. This is, as you are already aware, the key to much of this talk of co- operation on the Chinese side. Their ultimate hope is that we should commit ourselves formally to military and naval assistance in case of Japanese aggression in South China. If that is out of the question the alternative is so to involve us economically that we shall be compelled to intervene militarily on the Chinese side in defence of our own interests; and in the meantime it is all to the good- from the Chinese point of view that the Japanese should be led to believe that we are in some way committed to a pact of mutual assistance with China. I need not labour the point, which is, I think, already fully appreciated. Though I told Colonel Li Fong, as I have always told Chinese officials both publicly and in
(1) Not printed.
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private conversation whenever I have had an opportunity, that we are only prepared to discuss co-operation on an economic plane I do not expect it will make any difference in his or the mayor's public attitude. The Chinese believe that if we are sufficiently committed we shall not stand aside in a crisis. This is a dangerous belief-for them, since it may lead them into desperate adventures, and for us, for reasons which it is unnecessary to elaborate. I intend to take an opportunity of making our position in this matter perfectly clear to the new Minister for Foreign Affairs, Dr. Wang Chung-hui, on the lines indicated in the preceding paragraph.
I have, &c.
H. M. KNATCHBULL-HUGESSEN.
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