CO537-2187 — Page 43

143

(F 15520/376/G)

SECRET

FOREIGN OFFICE, S.W.1.

4th December, 1947.

(140)

Dear Mayle,

Thank you for your letter, 54145/47 of the 20th November, enclosing an extract from the Paris edition of the New York Herald Tribune, about future policy in regard to Hong Kong. I return the enclosure

as requested. - Refered out (131)

Your suggestion that there is a case for reconsidering the issue of a re-assuring statement about Hong Kong has been carefully considered here. I am afraid that we still think it undesirable to make any statement.

It seems to me that the hesitation of firms about putting money into Hong Kong arises primarily from the uncertainties of the situation in the Far East,

particularly China, and it is the Chinese attitude which is really the governing factor.

We know that the aim of the Chinese Government is the eventual recovery of Hong Kong, but that in present circumstances they are prepared to let the matter remain dormant.

If, however, His Majesty's Government issued any statement, I fear that the only result would be that the Kuomintang hot-heads would be given a loose rein and, as Hong Kong prosperity depends, in the ultimate resort, on Chinese good-will, the last stage of things would be worse than the first.

N.L. Mayle, Esq.;

Colonial Office.

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