CO129-502-8 China- general situation 27-4-1927 - 15-9-1927 — Page 101

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concerned with the possibility of exerting

economic pressure on the Hankow Government.

This is not a matter which directly concerns the

Hong Kong General Defence Committee: but ve

observe that His Majesty's Consul General at

Hankow in a telegram to the Foreign Office No.81 of the 17th May says that everything points to the Hankow Government being at its last gasp;

that the exodus of Chinese from Hankow continues;

that bank-notes are at a premium of some 20% and

that the Hankow Government is practically bank-

rupt. British trade with Hankow is dead: and Kuo

Tai-chi, the Commissioner for Foreign Affairs at

Shanghai informed the Japanese Consul-General at

Shanghai on the 25th April that the Nanking

Government "would welcome any sanctions the Powers

might decide to apply at Hankow" (telegram from

His Majesty's Minister, Peking, to Foreign Office

No. 782 of the 27th April). We conclude, therefore,

that to close the port of Hankow by naval action

would not inflict more injury on British trade at

that port than it now suffers and that such action

would rapidly bring about the fall of the Hankow

Government, which being bolshevized in a high degree

is more inimical to us than any of the other

regional governments now existing in China.

(2) "Since China is self-supporting.

foreign Powers".

We should not undertake a blockade of Canton

unless

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