CO537-3702 — Page 129

Nanking telegram No. 13 Saving to Foreign Office

2

inving predominantly or wholly Chinose populations with particular rogard to their political development. Ho did not explain precisely how this co-operation was to work but hurried straight on to the subject of Hong Kong. He told me that the Chinese Government had come to the reluctant conclusion that Hong Kong was "a political and economic menace to China". Communists and quasi-Communists were using Hong Kong as a base not only of propaganda but of subversive activities against China. He was glad to see that the Hong Kong authorities were following the example of the Malayan Government and taking protective measures against the Communists but he urged the roal necessity of

lose co-operation with the Chinese Government in the matter. Hong Kong was in a very special position with regard to China and such co-operation was necessary in the interests of both. He hoped that H.M. Government would not allow Sino-British relations to deteriorate as the result of the failure of the Government of a small colony to appreciate this necessity.

5. He then went on to deal with the economic side of the question and claimed that the main provisions of the Financial Agreement had not been carried and that none of the provisions of the Customs Agreement were in force.. I reacted sharply to this and told him that his information on the subject was incorrect. I agreed that parts of the Financial Agreement were impossible of execution but said that that was due to action taken by the Chinese Government and could not be blamed on the Government of Hong Kong, pointed out to him that much of the Customs Agreement was being applied and that the whole Agrooment would be enforced as soon as the question of the boundary was settled. hoped that that would be done very shortly.

I

I

6. I continued by assuring him of the desire of the Hong Kong Government to co-operate as closely as possible with the Chinese Government, of their full roalisation that it was to their advantage to do so and of their hope that such co-operation would be mutual. The M.F.A. countered this by saying that the Chinese Government understood Hong Kong giving asylum to political refugees but could not understand the action of the Hong Kong Government in pro- tecting a common criminal in the person of Hsu Chi Chuang the absconding Postal Bank Manager, against whom extradition proceedings are being taken in the Hong Kong courts. There was an Extradition Treaty between Hong Kong and China, ho said, and the Hong Kong Government declined to act in accord- ance with it. It was in vain that I pointed out to the M.F.A. that the man would be extradited if only the Chinese Government could produce sufficient evidence to satisfy the Courts in Hong Kong, which they had so far entirely failed to do. He could not, or would not, understand that the Hong Kong Government are not able to interfere with or over- ride the judiciary even when political interests are at stake. I think that, despite his wide experience, he is honest in his professed lack of comprehension. Justice as an abstract conception means precisely nothing to a Chinese and the idea of a completely independent judiciary is outside

his