CO537-4847 — Page 23

54484/49

The Church House,

Great Smith Street,

S.W.1.

5 January, 1950.

>

Dear boates,

You will remember that we sent you a copy of the Governor of Hong Kong's despatch No. 31 of the 17th October, 1949, in which he transmitted a memorandum on problems

likely to arise between liong Kong and the Chinese Communist regime. Radford, I understand, has had some brief discussion with you about this despatch.

I now attach a draft note on the memorandum and a draft covering despatch to the Governor expressing approval for the general policy disclosed. I should be grateful if you would say whether you agree with the drafts or have any other observations on the memorandum.

We have consulted the Ministry of Transport about Section II (Shipping) and the General Post Office about Section VII (Postal and Telecommunications). The only comment by the latter has been incorporated in the draft note: as regards the former, we have now received an interim reply saying that the proposals in Section II run entirely counter to His Majesty's Government's shipping policy and suggesting that the Governor be asked to take no action without prior reference to us. The Ministry of Transport are preparing detailed comment and suggest an interdepart- mental meeting to discuss the matter early in January. Quite apart therefore from any observations which you may have, it seems that as regards Section II our draft note will require some amendment. I will let you know later

P. D. COATES, ESQ.,

FOREIGN OFFICE.

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