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2.
4
After March they were handled almost exclusively by the South-West Transportation Company, a Government organisation which controls all communications in the five south-western provinces-Yunnan, Kwangsi, Kwang- tung, Hunan and Szechuan.
Enclosure 2.
Arms imported into China via Hong Kong.
DETAILED figures of arms and munitions imported into China via Hong Kong for the first six months of 1938 show that the principal suppliers were the following countries, arranged in order of the amount of arms and munitions supplied :-
(By a wide margin): Germany.
U.S.S.R.
Czechoslovakia.
1.
2.
3.
4.
Sweden.
5.
Belgium.
6.
America.
7.
Great Britain.
8.
9.
Italy. France.
And small consignments from other countries.
A certain proportion of the consignments from Sweden were also of German origin.
These figures confirm the information which has been passed on orally to the Japanese Government at intervals throughout the year, especially in so far as concerns the position occupied by Germany and Great Britain. It should be emphasised, moreover, that these figures refer only to Hong Kong. In other words, the imports from Great Britain as compared with those from other countries would be very much smaller still, if the figures for all routes by which imports enter China were available.
Enclosure 3.
Note of Material used by Naval Attaché and Military Attaché at the Ministry of Marine and the General Staff, respectively.
IT is understood that the Japanese General Staff believed, in July, that (a) A considerable increase in arms traffic had taken place through Hong
Kong since February.
(b) Even when the arms were not of British origin, a high proportion was
carried in British ships and handled by British agents.
(c) Including Hanoi and Singapore, the percentage so carried, and handled.
was said to be as high as 80 per cent.
British investigations show the following results :-
(a) Is incorrect; there was a marked decline in the arms traffic after March. (b) From February to June this year the number of British ships unloading munitions at Hong Kong was less than half of the total of such ships; the majority were German and the same applied to the nationality of the agents.
(c) Singapore does not enter into the picture, since it is not a port of entry into China; there are no figures for Hanoi, but there is no doubt that the Japanese estimate of 80 per cent. is far too high.
"Under 50 per cent.' would be nearer the mark for percentage of British ships carrying munitions to China.
X