This Document is the Property of His Britannic Majesty's Government.]
CHINA.
CONFIDENTIAL.
January 16, 1928.
SECTION 2.
15
[F 269/7/10]
No. 1.
Acting Consul-General Brenan to Sir Austen Chamberlain.—(Received
(No. 146.)
Sir,
January 16, 1928.)
Canton, December 8, 1927.
I HAVE the honour to enclose herewith for your information copy of my despatch No. 203 to His Majesty's Minister, Peking, dated the 8th December, 1927, on the subject of the probable effect on Hong Kong of an increase in the Chinese import tariff.
Enclosure 1 in No. 1.
I have, &c.
J. F. BRENAN.
Acting Consul-General Brenan to Sir M. Lampson.
(No. 203. Confidential.) Sir,
Canton, December 8, 1927. THE following comments are an endeavour to comply with the instructions contained in your telegram No. 495 of the 30th November that I should report my observations on the despatches from the Governor of Hong Kong to the Colonial Office of the 9th and 12th August last, despatches dealing with the effect on Hong Kong of an increase in the Chinese import tariff.
2. Sir Cecil Clementi and Colonel Hayley Bell, the Kowloon Commissioner of Customs, whose able memorandum is enclosed in the Governor's despatch of the 9th August, point out that an increase in the Chinese tariff will result in a corresponding increase in the smuggling into China from the free port of Hong Kong. This is undoubtedly true. The Commissioners of Customs at Canton and at Kongmoon, with whom I have discussed the question, are of the same opinion, and I enclose an interesting statement by the local representative of the Asiatic Petroleum Company (Limited), showing how these fears have already materialised in the case of the increased taxation on oil products.
3. The Governor of Hong Kong further points out that, with an increase in smuggling, the Canton Government will draw a cordon of customs stations and This preventive vessels around the Colony in an endeavour to protect its revenue. also is more than likely. In fact, so long as Hong Kong remains a free port and comes to no arrangement with Canton on the subject, it is difficult to see what else the Chinese authorities can do. Not only that, but the more firmly established and efficient the Canton Government is, the tighter and more effective will the cordon become. At the same time, if the preventive service is under purely Chinese control, one may be sure that it will be attended by all sorts of abuses to the great detriment and exasperation of the Hong Kong traders.
4. Having agreed with the Governor's premises, I am in some doubt as to what his Excellency wishes done in the matter. In paragraph 6 of the despatch of the 9th August he states: "I remain of the opinion that a less opportune time for experimentation with li-kin and with the Chinese customs tariff could hardly be "The found," but in paragraph 16 of the despatch of the 12th August, he says: Canton Government wishes to revise its customs tariff and abolish li-kin. It cannot be done because His Majesty's Government will only negotiate with the Government of a reunified China.
I submit that it is now the highest time to devise means whereby the Hong Kong Government may negotiate with the Canton Government. irespective of the other regional authorities in China, an agreement which will be helpful both to the Colony and the province." Again, whilst the general tenor of his despatches has always been that it is useless to attempt any revision of the treaties in the chaotic conditions now obtaining in China, he urges in paragraph 15 of the despatch of the 12th August that "it is now that we should endeavour to effect an
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