CO537-(1262-1649) — Page 947

00050

GOVERNMENT

imited.

Lloyd.

Copy No.

x)

6

73

ESTRICTED

logial Office

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Kong, 1860,

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ong Kong

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bolition of

made

His Majesty's

nnexion

Ref.:

CO 537/1649

THE NATIONAL ARCHIVES

Please note that this copy is supplied subject to the National Archives

restrictions.

2

Further information is given in the enclosed Terms and Conditions and that your use of it may be subject to copyright

and Conditions of supply of National Archives' leaflet.

}

0005 I

connexion with extraterritoriality, but intimated that, if the Chinese Government desired that the question of the lease of these territories should be reconsidered, that was a matter which, in the opinion of His Majesty's Government, should be discussed when victory was won. The Chinese Government thereupon reserved their right to raise the question later.

4. In June and July of this year Generalissimo Chiang Kai Shek and Dr. Wellington Koo referred to the "Hong Kong problem" and the desirability of finding an early solution, in the course of conversations with Sir Horace Seymour and the Minister of State respectively. Copies of the two documents reporting these conversations are attached (Annex III). More recently, there has been some Press agitation in China and Hong Kong, which is now, however, dying down, on the particular question of the resumption of Chinese jurisdiction within the Walled City of Kowloon.

5. These events, linked with other indications of the resurgence of Chinese national feeling regarding Hong Kong, and the possibility that the informal approaches referred to above will be followed by a formal request for the opening of negotiations, make it desirable to examine (1) the question whether we should take the initiative in opening negotiations with the Chinese, (2) the line that we should take in the event of negotiations undertaken on our initiative, and (3) the modification to (2) that might be necessary if it were left to the Chinese to open negotiations.

6. The main arguments for and against our taking the initiative are briefly:-

Arguments for

(a) The Chinese would undoubtedly welcome an initiative from us. The conversations referred to in the fourth paragraph have made this clear, and with the examples of India, Egypt and Trans-Jordan before them, the Chinese Government probably look for a generous gesture in regard to Hong Kong. (b) It would meet with whole-hearted approval in China and the United States (except, perhaps, in business circles in the latter country) and thus strengthen our relations with those countries. It should create a favourable atmosphere for our long term objective of freedom of commercial opportunity in China and the Far East generally.

(c) The Chinese, having already raised the matter informally, might be expecting us to make the next move, and any failure on our part to do so may be attributed to lack of sympathy with their cause.

/(a)

2

cma

Ref.:

CO 537/1649

THE NATIONAL ARCHIVES

N

restrictions. Further information is given in the enclosed Terms and Conditions of supply of National Archives' leaflet. Please note that this copy is supplied subject to the National Archives' terms and conditions and that your use of it may be subject to copyright