Copy.
(8704/1077/47)
BRITISH EMBASSY,
NANKING,
3rd July, 1947.
SECRET
(My dear Menon),
I have devoted considerable study to your letter of 20th June in connexion with the possible policy of the Government of India towards Portuguese possessions in which you ask in particular about the Chinese attitude towards Macao in a similar connexion.
I think the following analysis represents the situation with tolerable accuracy. Macao first came into regular occupation by the Portuguese about the middle of the 16th century when it was leased to the Portuguese Government by the Chinese Government, or maybe more accurately the local authorities, of their own accord and without compulsion. At some later stage actually in 1847 I believe the Portuguese assumed a more complete control over the territory which thereby attained a status equivalent to a possession. This situation seems to have been accepted by the Chinese Government without particular protest until almost 100 years later. While no doubt one or two irreconcilable elements may have in the past expressed strong opinions for the rendition of Macao, a definite demand for its retrocession did not feature prominently until after the anti-British agitation in China of 1925-1927, which first brought into the propaganda limelight the parallel question of the rendition of Hong Kong and Kowloon. This agitation eventually died down, but the Kuomintang have not allowed the theme of the rendition of these two places to fade out of the minds of the people. In fact it was revived from time to time as part of the campaign for the abolition of the so-called "unequal treaties" or whenever xenophobia was the political objective of the moment.
Since the Japanese surrender this question has received considerable press publicity, most of it malicious and virulent and full of falsehoods. In most of the recent political conferences such as the Peoples Political Council some member or Cabinet Minister has played to the Gallery of Kuomintang popularity by demanding the retrocession of these places, or else. And there the matter is allowed to rest until next meeting or until some scurrilous article appears in the hostile press.
Actually the fact should be kept in mind that the transfer to Chinese control of Hong Kong, Kowloon, and to a lesser degree Macao, would be to the economic disadvantage of China as there, in contrast to China proper, there is some solid foundation for business prosperity and good order, from which the Chinese in the end profit the most.
That may in part account for the fact that so far no concrete approach has been made by the Central Government with regard to the possibility of negotiating a treaty for the retrocession of these specially-held territories. It is remarkable in this context that in the recently signed treaty between China and Portugal, which followed the general lines of the other agreements for the relinquish- ment of extra-territorial rights in China, no mention was made of the handing back of Macao.
Though the general tenor of the above is negative from the point of view of your enquiry, I hope the information at least may be of
some interest though I am afraid I have added nothing which is particularly novel.
His Excellency
Mr. K.P.S. Menon, C.I.E.
Indian Embassy,
NANKING.
(Yours sincerely),
(L.H. Lamb)