See 53552/38 and previous correspondence.
Cash
any publice openca hoch)
China
lve m would probably
he
strongly
very agasn't such as negotiations ut
moment.
the prese
airport, is also situated in the new territories.
Unless the course of the present hostilities
nas altered Chinese opinion very considerably, a matter
of which we have no evidence, I think we may take it
that they would be very unwilling to consider altering the present status of the New Territories in our
favour. In this connection the recent correspondence
about the status of the walled city of Kowloon is of
interest as showing their attitude.
On reconsideration I
feel
that
the present is a favourable moment for raising this
question. The only inducement we can offer the present
Chinese Government, whose continued existence is, of
course, by no means certain, for the extension of the lease or the outright cession or the New Territories
would seem to be either the grant of extensive credit
or the payment of a very large sum. I doubt if either
of these will be considered here at the present time,
and even if they were the opportunities which they would give to China of purchasing large supplies of arms would almost certainly raise a very outspoken
objection on the part of the Japanese Government.
am inclined to think that the matter could better be
raised after the present hostilities are over.
I
These considerations are, nowever, largely for the F.0. and I suggest that we should merely send
a copy of Sir. G. Northcote's letter to them and ask
for their obsons.
? So proceed.
P. Rage D
29.1.38.
It is a question for the Foreign Office, and
probably for the Cabinet, whether the present time
is opportune for any approach to the Chinese
Government in the matter of the extension of the lease