CO537-3702 — Page 149

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Committee and the formation of an effective coalition government; and say that henceforth the freedom and rights of the people will be guaranteed, and that when the people are mobilized for the immense task of reconstruction the reasons for retaining Hong Kong quoted above will cease to apply. After the coalition government has been set up there must be an effective and enlightened central and local administration, the separate political rights and military forces of the Communists muat be abolished and the country must be developed with the aid of foreign capital.

Finally, the standards of international morality are very different today from the standards a century ago. We have seen Russia demanding special privileges in the North Eant (which the Chinese Government has already conceded) and, without even asking the permission of the Chinese Government, move out all the industrial installations left by the Japanese. By comparison the British policy in Hong Kong is very broadminded. The Chinese public is being inconsistent in demanding the return of Jong Kong and yet at the same time conceding special rights to the U.3.3. R. in Port Arthur end Dairen. Naturally the responsible Chinese authorities have not demanded the rendition of Hong Kong. President Chiang Kai-shek has stated that the position of Hong Kong is governed by the Sino-Pritish treaties and future changes will only be made after friendly discussions between the two nations. He added that other concessions and leased territories have been returned to China and Kowloon should naturally be no exception, but the Chinese Government will settle this question through the proper diplomatic channels.

The writer thinks that it will be a good thing to shelve the whole question for the present. China has many pressing internal problems awaiting solution and while she is rutting her own house in order, Hong Kong will be regaining its former prosperity. when the psychological moment arrives, the writer suggests that the best move for the British Government to make will be to hold a plebiscite and let the people of Hong Kong decide its future. leased territory, the writer believes that it will soon be

As regards the Kowloon returned to China. In the meanwhile if China succeeds in becoming a prosperous country with an effective administration, it is the writer's firm conviction that the people will support her in the plebiscite.