CO129-542-12 Smuggling from Hong Kong into China 21-1-1933 - 21-8-1933 — Page 9

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No.17. The Hong Kong-Chinese Customs Agree-

The

ment, to which Mr Nunn refers in the fourth paragraph of his letter, never materialised. Hong Kong Government would be willing to renew

but negotiations with the Chinese Government, so long as relations between Nanking and Canton remain friendly, it seems unlikely that Nanking would be willing to negotiate. At present, the Canton Government obtain revenue by taxing goods which have evaded the Chinese Customs. Revenue so obtained is not subject to prior charges as in the case of the Customs revenue, and goes straight into the hands of the Canton provincial authorities. If Nanking made an agreement with Hong Kong which put an end to this, it would be likely to cause a rift between Nanking and Canton. On the other hand, if Nanking-Canton relations again become strained, Hong Kong could hardly negotiate a Customs Agreement with Nanking without landing itself into difficulties with Canton.

The question of whether representations should be made to the Chinese authorities regarding the undue severity of the fines imposed by the Chinese Customs, to which Mr Nunn refers in the fifth paragraph of his

letter, has in fact been put to Mr Ingram at

Peking