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Fos flet commoner Chinese
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Maritime Customs d
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The geographical position of Hong Kong on the coast of China has always raised problems of considerable difficulty for the preventive service of the Chinese Maritime Customs. The configuration of the neighbouring bays and the numerous small islands obviously lend themselves to smuggling. has been the policy of the Colony to co-operate as far as possible with the Chinese authorities in overcoming these difficulties and, on the long view, it is in the interests of the Colony thus to minimise the sources of friction with the Chinese Govt. and remove what would otherwise be an intolerable source of complaint to the latter.
The latest aspect of the matter is that a flourishing trade in smuggled kerosene has sprung up owing to the Chinese Govt.'s ban on the importation of that commodity, imposed for the sake of conserving currency. Apart from the smuggling from Hong Kong sources vast quantities of kerosene are being imported by the Japanese through Canton and Swatow.
The Governor's attitude seems to be (1) that there is no use pretending that kerosene is not being imported (in view of the Japanese trade) and we may as well go in and make our profit on the side; (2) that if the trade from Hong Kong were stopped it would only be diverted to Macao, unless the latter were rationed, which would be considered as an unfriendly act; (3) that we do not want to stop the trade in which we sell sterling products to a non- sterling country. If (1) seems a cynical view, it must be remembered that a similar attitude has to be adopted almost daily by the merchant who seeks to do business with Chinese face is saved by regulations which no one is expected to observe and it is difficult to believe that the Chinese authorities really expect their population to do without kerosene at all. I am surprised, however, that the Governor should express the view of point (3). The Govt. of China, a friendly power, is in a desperate position and the financial front is one on which she has felt the strain most severely. It is true that we too have a war and battles of our own financial front, but it is surely contrary to our policy that in a matter of this kind we should seek advantages at the expense of the Chinese. The fact that, if we do not reap the potential advantages of the trade others will is an argument which could have many applications, and I do not think it is one by which we should allow our decision to be swayed. On a long view, as always, it is not in the ultimate interests of Hong Kong to lend support to those who attempt to frustrate the policy of the Govt. of China.
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? Send copy to Foreign Office for obsons., saying that S. of S. is inclined to the view that, in spite of the admitted existence of large imports of kerosene by the Japanese, H. M.G. should co-operate with the Chinese Govt., so far as possible, in preventing the flow of kerosene from Hong Kong and should not seek to obtain advantage for their own currency by encouraging a trade upon which an embargo has been placed in the interests of the Chinese
national