CO129-517-2 Correspondence on proposed Chinese and Hong Kong agreements over Customs 13-11-1929 - 28-12-1929 — Page 24

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(3).

approximates to a treaty port so why not go further and

work for its inclusion in Chinese Dominions? This

obviously is not a point to discuss with Chamber but it is well you should know my thoughts on this point.

My own view is that if it is considered desirable in the interest of Hongkong that an agreement of this kind should be made and I agree that it is most desirable that it would be well advised for reasons above mentioned to drop Article 5 altogether. Sooner or later the question of smuggling which in view of increased Chinese tariff is rapidly becoming a serious problem will have to be tackled in Hongkong's own interest quite apart from Chinese interests in the matter and I think Hongkong would be acting in the best interests of British trade in China as well as their own if they offered to conclude this agreement without Article 5 or Article 10 leaving us to do our best in commercial treaty negotiations to obtain the best terms we can for British shipping in China in discussion of which Hongkong's own particular interests will of course receive full consideration.

In conveying my views to Committee of Chamber, please say in taking them thus into my confidence I rely on their treating what I have said in strictest con- fidence.

Repeated to Foreign Office and Hongkong.