CO129-521-12 Chinese Customs- proposed agreement with Hong Kong 2-4-1930 - 16-6-1930 — Page 52

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reason, why all the China firms at home insist on the need

for an agreement being made between the Hong Kong Government

and the Chinese Customs without further delay, is that

without such an agreement there is every chance of continuous Anglo-Chinese friction, which will re-act on British interests

and British trade not only all over China but in this country,

and that with it we shall have done something pleasing to the

Chinese Government and incidentally in many ways directly

advantageous to Hong Kong as a port, which will promote amity

and further trade between the two nations"

I quite agree with these views, as from a business

point of view the relations of Hong Kong with China are at least

as critical and important as those of the International settlement

at Shanghai. It is impossible to get away from the fact that

Hong Kong has prospered and supports a very large population,

because it is the natural port of South China. The continuance

of that prosperity depends on Hong Kong being in the closest

commercial relations with China, even if it involved in the

last resort going within their tariff wall. The claims of

Hong Kong born Chinese and Chinese owned Hong Kong registered

ships to extra-territorial privileges has been one of the.greatest

sources of friction between Britain and China, and the smuggling

problem is now making things worse. If this is not remedied

it will cause deliberate discrimination against trade with Hong

Kong, to which it will be almost impossible for the Foreign

Office to object.