52
3. An immediate reply to the first question
was sent by telegram (No. 112), the substance of
which was that there is no objection to the setting
up of a factory in Hong Kong, but that for the
duration of the Sino-Japanese conflict no permission
can
to export aircraft to either China or Japan ged
be granted. A despatch on the general points
raised in the Governor's despatch was also promised
in that telegram.
4. This matter of the general question was
then referred to the Air Ministry and the Board of
Trade. The Air Ministry's reply (No. 126) is
largely coloured by questions of strategy and, as
Mr. Rogers points out in his minute of 16.11., they
treat the matter as though the proposal were to
establish a Government aircraft factory in British
territory in the Far East. The Board of Trade in
their reply (No. 131) take the line that the only
point with which they are concerned is the desirability
of ensuring that, so far as possible, orders for
industrial plant and aircraft components should be
placed in this country, and that consequently it is
immaterial, so far as U.K. trade interests are
concerned, whether the factory is established in
Hong Kong or Burma. But clearly the question to
be considered is whether the factory should be
established in Hong Kong. The Board of Trade do,
however, suggest that it would be premature to attempt
to reach a decision at this juncture as to the
eventual establishment of a factory at Hong Kong.
It seems to me that this consideration is not really
of much weight, since the establishment of a factory
must in almost any circumstances contribute to the
economic development of the Colony. In the rest of
their