No.4 in 58852/37
our object.
The only later reference which I think is
relevant is to the signs of the continued interest
which have been exhibited by the Chinese authorities
in Canton in our possession of the New Territories,
and their n to exercise sub rosa jurisdiction of
tendency
their own in that area, e.g. the Canton Intelligence
Report, extract of September, 1937.
I do not think it is generally doubted that
whatever the result of the present hostilities, Chinese
national feeling will in no way be less than it was
before the hostilities with Japan. Japan itself
maintains the story that it has no territorial designs
on China, but China is alive to the fact of the loss
of Manchuria, and the threat to Chinese sovereignty in
the northern Chinese provinces bordering on Manchukuo.
It can only be assumed that any Chinese authority, and
particularly the ultra-nationalists in Canton, would be
extremely sensitive at this time about any proposal to
extend the period of the British occupation of the New
Territories.
Japan has already announced that it will
recognise no international engagements entered into by
the present Chinese Government at Hankow, and it is not
in China yet clear in what position or authority,the Japanese
Λ will stand on the conclusion of the present war, and
consequently what power they would possess in practice
to nullify any concession which we might wring or
purchase from the Chinese Government in their hour of
need.
It may be that in the future many matters,
political and commercial, will have to be settled in
negotiation with China, and indeed before the present
hostilities started we were beginning to think again
of
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