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SECRE T.

SAVINGRAM

3A

copy

To the Secretary of State for the Colonies.

Repeated to:

From the Governor, Hong Kong.

Date 30th December, 1946

Special Commissioner, Singapore (No.9%) British Ambassador, Nanking. (No.34)

Consul-General, Canton,

(No.25)

No. 435

Following is a short appreciation of factors in Hong Kong

which may affect foreign policy covering the period ended 23rd December,

1946.

(a) Interest or activity in the Colony on the part of any foreign

country.

(i) After careful consideration of the request of General Chang

Fa-Kwei I have decided, with the concurrence of the Executive Council,

not to surrender Sham Wai-Yau of the Wa Kiu Yat Po as a collaborator.

Sham eventually came forth from his place of hiding and submitted

himself to interrogation. The reasons for declining the application

for surrender will be explained in detail to General Chang Fa-Kwei.

It is anticipated that the result of this decision will be that the

Kuomintang will be baulked of its desire to extend further its

control of this newspaper, but that it will retain, for the time being

at any rate, such measure of control as it has already achieved.

(b) Reactions in the Colony to the actions or policy of any foreign

country.

(1) The new import controls of the Chinese Government have been

the subject of lengthy discussion between local commercial interests

and officers of the Chinese department which is to be established in

over/