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1.
If it should prove necessary to make provision for "most favoured nation treatment" in any respect in the present treaty (which is not at present the case) the Foreign office
re ready to adopt the expedient suggested by the Department of te. As regards coastal trade and inland navigation, please see under section 3 of the Foreign Office memorandum of the 23rd November.
2.
The Foreign Office would be grateful to be informed of the reception which the Chinese Government give to the proposal for expanding the preamble. For their part they would have no objection to introducing the principle of equality in this way into the British treaty. It should be mentioned that the Chinese Government have proposed the omission of the words "and for this purpose to settle certain matters relating to jurisdiction in China" from the preamble of the British draft.
3. It seems to the Foreign Office preferable to retain the original wording of the second paragraphs of Articles 2 and 3 of the United States treaty if this can conveniently be done, since the phrase concerning "legitimate rights" provides some protection for respectable private interests in the areas which are being handed over. It is not our intention to ask that such interests should be indefinitely maintained i. they are in conflict with the Chinese laws and regulations; but it is reasonable to require that if they are expropriated or otherwise liquidated adequate compensation should be paid. The Foreign Office would suggest that the matter be further discussed with the Chinese Government on these lines.
4. The Foreign Office agree with the proposed amendment of Article 4 (Article 5 of the British draft, which should be satisfactory to the Chinese Government.
FOREIGN OFFICE,
26th November, 1942.