CO129-521-13 Chinese Customs- proposed agreement with Hong Kong 27-8-1930 - 16-10-1930 — Page 436

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1918 DRAFT.

ARTICLE XIII.

Regulates examination of goods and collection of Chinese Customs duties at Kowloon railway terminus.

ARTICLE XIV becomes

ARTICLE XV becomes

ARTICLE XVI becomes

ARTICLES XVII AND XVIII become

1929 DRAFT.

Insertion of time limit for duty-paid certificates covering native goods landed for transhipment (clause (d)).

Insertion of clause (e) permitting, with Customs approval, sale of goods in Hong- kong originally landed for transhipment.

ARTICLE XIII.

Clauses (e) and () of 1918 draft deleted as being unnecessary.

Clause (g) amplified so as to cover all dues and duties payable at any place in the Colony to the Chinese Customs. This clause now appears as Article XIV.

ARTICLE XV.

&

Insertion of clause indicating punitive measures to be taken by the Hongkong Government.

ARTICLES XVI, XVII, XVIII,

XIX, AND XX,

Dealing with costs of legal proceed- ings, cost of seizures, custody of seizures, Hongkong rights to seizures authorised by Colonial law, and salaries of Hongkong revenue officers engaged on Chinese Cus- toms behalf, do not appear in the 1918 draft.

ARTICLE XXI,

ARTICLE XXII,

With alteration of period of duration from five (5) to ten (10) years, and addition to the proviso fixing the Kowloon Commis- sioner's nationality as British that he shall also be a person acceptable to the Hong- kong Government.

ARTICLES XXIII AND XXIV respectively.

privileges to

§ 18. This revised and enlarged draft was duly submitted to the Chinese Government; Objection of

Chinese but, as had been anticipated, Article V, granting inland waters steam navigation privileges to Government to Hongkong vessels, proved the stumbling-block to acceptance of the agreement. It was admitted

article granting inland waters that the article, in a less extended form, had been included in the drafts of 1911 and 1918 and steam navigation had on both those occasions been approved. Much water, however, had flowed under the bridge Hongkong vessels. since then. Since 1918 China had undergone a re-birth, and the strong spirit of patriotism, which was manifesting itself all over the country, was strongly opposed to the granting of any privileges to foreigners which were derogatory to the fact or the feeling of national sovereignty. The widespread participation of foreign shipping not only in the coasting trade of China but also in the trade and navigation of its inland waters was one of those long-established privileges which national feeling and policy demanded should be curtailed and as soon as possible com- pletely withdrawn. To make provision for the preservation and extension of that privilege in a new treaty or agreement was in the circumstances out of the question; a colony could hardly expect to be granted a privilege which the grantor was planning to withdraw from the mother country. As a compromise, in order, if possible, to get the agreement into operation, the Inspector General suggested that the article might be sanctioned with the proviso that it be recognised as valid only so long as a similar privilege was in force for foreign shipping at the treaty ports in China. This suggestion was not acceptable, the Chinese Government insisting that the article be deleted. In order that such a decision might not close the door to further discussion, the Inspector General then proposed to the Hongkong Government that in its place there might be a formal exchange of notes to the effect that steam and motor vessels flying the Chinese flag would be allowed to trade freely to and from Hongkong and Chinese inland places. He pointed out that once coast and riverine trade privileges are withdrawn from foreign-flag vessels, direct inland trade to or from a treaty port would be permitted only to Chinese-flag vessels. Hongkong, being definitely a foreign place and not a treaty port, would ipso facto be excluded from such a privilege. Acceptance of this proposal, however, would place Hongkong in this respect in as favourable a position as any of the treaty ports, but rejection of it would just as definitely leave the trade of the Colony to labour under the same disabilities as obtain to-day. The Hongkong Government did not view with favour this proposed deletion of Article V, to be replaced by an exchange of notes curtailing the inland water trading privilege to Chinese vessels only, but no decisive official acceptance or refusal was given to the proposal pending reference to the Home authorities. A certain section of Hongkong opinion, however, while firmly opposed to the exclusion of the article, was in favour of a reversion to the terms of the 1918 draft and of limiting the inland waters steam navigation privilege for Hongkong vessels to the non-open ports of the Kwangtung province.

19. The present position (May 1930), therefore, stands thus, China, having introduced Present position a new import tariff with greatly increased rates, is faced with a widespread and well-organised of negotiations, development of smuggling. This increase in clandestine trading is especially marked in South China, mainly on account of the position and status of Hongkong as a foreign free trade port at a commercially strategic location on China's southern coast. To check these smuggling activities and protect her revenue China asks that the proposed agreement, with the deletion of Article V,