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of the Air Marshal who had recently visited Hong Kong was
in favour of the project.
Mr. Fitzmaurice pointed out that there were really
two separate questions.
(1) The advantages of setting up a factory.
(2) The question of whether, if the factory were set
up, it could be permitted to export aeroplanes to China and
Japan during the present hostilities.
Mr. Bigg asked if the Cabinet decision applied to
aeroplanes exported from Britisn territory to private firms
in China, as he understood that the decision was taken upon
a project of Madame Chang Kai Shek's to set up an assembling
plant under the control of the Chinese Government in Hong
Kong territory. Mr. Henderson said that there was no legal
obligation upon Hong Kong not to export aeroplanes to eitner
of the belligerents during the present struggle since a legal
state of war did not exist, but that it was felt here that
it would be dangerous to do so. The Cabinet decision as
embodied in the telegram sent to H. M. Chargé d'Affaires at NANKING.
Bhang covered all aircraft (except ambulance aircraft),
since all could be used for military purposes to some extent.
Mr. Fitzmaurice asked whether the factory, if it
were set up, could supply markets other than China or Japan,
and Mr. Bigg replied that there might possibly be some market
in either the Netherlands East Indies or Australia, but that
he thought it unlikely that there would be any considerable
sale to either.
Mr. Cowell asked whether we could assume that as
long as the present hostilities continued no permission would
be granted for the export of aircraft from Hong Kong to either
of the belligerents. Mr. Henderson replied that the reasons
which led to the present decision being taken still existed.
Mr. Bigg