CO537-2187 — Page 207

sites for an airport, are with one possible exception,

in the new territories, the construction in recent

years of large waterworks in the new territories for

supply of water to Kowloon and Hong Kong Island, and

the extension into the new territories of docks,

industrial and commercial buildings and residential

extensions of the urban area of Kowloon.

3.

In the course of the negotiations which -

preceded the conclusion, in 1943, of a treaty

providing for. the abolition of extraterritoriality

in China, the Chinese Government made a request for

the rendition of the New Territories. His Majesty's

Government refused to consider this question in

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 conversa-

t ions 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