CO537-2187 — Page 149

ANNEXURE III

(Memorandum by Sir Horace Seymour)

The Generalissimo and Madame Chiang entertained my wife and myself at a farewell luncheon today. After luncheon I had a talk with His Excellency, at which the Minister for Foreign Affairs and Dr. Wellington Koo were present.

2.

After I had raised the question of visits by His Majesty's ships to Chinese ports (recorded separately) the Generalissimo spoke of Sino-British relations in general, saying that they had much improved in the last few years, He agreed that, in the main political questions now before the World's statesmon, Chinese and British interests were very similer. But he thought that China's relations with Britain would not be so satisfactory, or conducted with such mutual confidence as her relations with the United States, so long as the question of Hong Kong remained without Some solution. It would, he said, not be difficult to find a solution under which the material interests of all concerned would be safeguarded. The question was to some extent a psychological one, and public confidence in British policy would not be fully established unless a solution could be found. As an illustration His Excellency mentioned the recent repeal of the American exclusion acts affecting Chinese immigration to the United States: the practical effect was very small indeod: the moral effect had been very satisfactory.

3.

The Generalissimo mentioned incidentally that in the discussions with the Soviet Government over Port Arthur and Dairen the Russians had argued that as the Chinese allowed the British to stay in Hong Kong they could hardly object to the presence of the Russians further north. His Excellency added that this argument was in fact not of any particular importance, but he mentioned it because it had been put forward on the Russian side.

4. In conclusion' the Generalissimo asked me to let His Majesty's Govern ent know, on my return to England, of his views on this matter, and of the importance which he attached to it as a means of promoting those cordial relations between China and the United Kingdom which it was his wish to see.

5. As I know from recent correspondence that His Majesty's Government have not yet decided upon their future policy in regard to Hong Kong I did not enquire further into the Generalissimo's views (which are probably not very definite as yet) beyond confirming that I had correctly understood that he contemplated some arrangement under which our material interests would be safeguarded. I promised, of course,

to convey to the Secretary of State for Foreign Affairs what he had said to me.

6.