CO129-521-12 Chinese Customs- proposed agreement with Hong Kong 2-4-1930 - 16-6-1930 — Page 230

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narrowly conceived interests of Hong Kong.

Indeed, Hong Kong would ultimately derive the

greatest benefit from an agreement, since

friendly relations with China would not only conduce

to commercial prosperity but also would be the

surest safe guard against a growth of irredenti st

propaganda.

The continued existence of the Chinese

Maritime Customs, with an efficient foreign staff

and if possible a British Inspector-General, is

vital for British prestige and trade with China.

A solution of the smuggling problem, besides

removing a legitimate source of grievance and so

promoting good relations, would greatly increase

the value to China of the foreign-staffed

Customs Admini stration. An Agreement which, in

addition to this, confers important benefits on

the entrepot trade of Hong Kong should not

be jeoparised by impossible and even unde si rable

demands.

The draft as initialled in Hong Kong

in July, with the total omission of Articles V and

VI, should be made the basis of agreement.

It remains to mention that two Treaty

questions have been rai sed by the Board of Trade, who,

while in principle entirely in favour of the conclusion

of an agreement, enquired whether the proposed

limitation of the privileges under Article V. to

Chinese-flag vessels might involve the question of the

Treaty obligations of Hong Kong respecting the

treatment

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