CO129-517-2 Correspondence on proposed Chinese and Hong Kong agreements over Customs 13-11-1929 - 28-12-1929 — Page 78

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Acceptance of grant to Chinese flag vessels, if

refused to the British flag, is strongly opposed by

merchants here, Chinese and British alike. They

consider such a concession an entirely inadequate quid

pro quo for extraordinary concession which is granted

to China by the agreement.

Some merchants consider further that grant to

Chinese flag vessels is a concession which public

opinion in China will force the Chinese Government to

concede altogether apart from the agreement.

I am very strongly of the opinion that we ought

not to give way on this question and rather than give

way I should prefer to abandon the whole of the present

agreement. I invite your attention to my secret

despatch of 14th August 1929 on the subject of the most

favoured nation clause.. As regards the latest

drafts of the agreement see my telegram 14th November

No. 14 and my despatch 20th November Secret. I should

be glad if last mentioned despatch may be fully

considered before further action is taken.

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