CO129-502-8 China- general situation 27-4-1927 - 15-9-1927 — Page 79

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and the Secretary of State has therefore

sought to examine the matter from the

standpoint of the trade of Hong Kong ·

The Chinese proposal that this taxation

should be accompanied by the abolition

of internal duties has not escaped his

notice, but it seems clear that, as

pointed out by both the Governor and

Sir M. Lampson, little or no reliance

can be placed on Chinese assurances in

tal

this respect, and indeed, it is not within

the power of the Nanking or Canton Govern-

ments to abolish internal taxation, even

if they wished to do so. It must be

assumed, therefore that the proposed

increase in the import tariff would not in

be accompanied by the abolition of

external duties and in these circumstances

it seems clear that the proposed taxation

would necessarily have a serious effect

on Hong Kong trade The effect of this

taxation on trade with South China,

Lowever

fact

serious though this would be, provides/less

cause for alarm than the precedent which

I in

would