A
Sir H.Moore.
I gave you a summary of the discussion at
this conference. The questions at issue are clearly
shewn in Mr Rogers' note of the proceedings and in
the draft letter to F.0. The position is, necessarily,
rather unsatisfactory. All parties would welcome the
establishment of an aeroplane factory in Hong Kong,
preferably under British control. But there is
little prospect that H.M.G. will agree to the
exportation from Hong Kong of completed military
aeroplanes while hostilities between China and Japan
continue; and while such exportation is prohibited
there is little inducement for any capitalist to start
the assembly of aeroplanes in Hong Kong.It would
not be very logical to permit assembly and exportation
from Burma, but the prohibition in H.K. is a matter
of policy and not of international law. Even so, it
is not at all clear that capitalists would want to
establish themselves in Burma, where their distance
from Chines markets would be serious. They might
well prefer to start a factory in H.K. and trust to
conditions permitting export by the time it was
ready to produce aircraft. This would suit us all
right, but would not be quite so useful to the
Air Ministry as a factory less liable to attack in the
event of our being involved in war with Japan.
We can only try to clarify the position as in
draft to F.0.
# Plowell
4.5.38.
rs.
botes. Thanks. som.
28