A
166
It
Hong Kong was concerned should be cleared up. Captain Bourne
said that the project had the support of the War Office.
was felt that Burma would be a better site on strategic
grounds as being further away from attack, but that there
would be no objection on their part to setting up a factory
in Hong Kong, i.e. that it would be an asset there and not
a liability. It was generally agreed by the representatives
;
of the Defence Departments that there was no objection to
setting up the factory in Hong Kong from a defence point of
view.
Mr. Bigg asked whether it was not likely that if
the promoters of the scheme were discouraged from setting up
a factory in Hong Kong they would go to Macao or Canton in preference preferable site to Burma. In peace time there would appear
to be a much better market for aircraft in Hong Kong than in
Burma, and even a site in South China might be preferable to
the latter. Mr. Henderson doubted whether it would be likely
that the factory would be set up in Macao or Canton. He
thought that the Portuguese would certainly discourage the
former.
Mr. Cowell asked whether the Burmese Government
would offer any inducement to the promoters to set up the
factory in Burma, and Mr. Donaldson replied that the whole
thing was too vague from their point of view for this to be
likely.
Mr. Bigg said that ne thought it necessary to refer
the matter to the Cabinet in any case, since their original
decision had been given a much wider application.
Mr. Matthews pointed out that machines would
probably be exported to Japan from the factory as well as
to China, and Mr. Henderson said that this was not likely
to be popular with the Chinese in Hong Kong and might cause
trouble.