CO129-549-14 Commission of Enquiry into trade of Colony 17-7-1934 - 18-1-1935 — Page 36

COPY

PS. M

CONFIDENTIAL.

OBSERVATIONS ON

COLONIAL OFFICE MISCELLANEOUS NO. 445 (CONFIDENTIAL).

This report taken in conjunction with a

general survey of the position of Hongkong serves to

emphasise the fact that Hongkong is different from

any other Colony in the British Empire. It is

primarily a deep sea port and entrepot for China and

fundamentally, from a geographical and commercial

point of view, a part of South China. This may be

presented more vividly to the mind if we imagine

Hongkong suddenly cut off from any connection with

China, There was a taste of this in the strike period

of 1925. In view of this it is generally conceded that

Hongkong must continue to be a free port except inasmuch

as a suitable arrangement for close connection with

China might be possible.

If the principle in the last sentence is

accepted then Hongkong cannot give much, if anything,

in the way of preferences to the rest of the Empire.

The Empire therefore will not give further preferences

to Hongkong. On the contrary the tendency will be to

cut down preferences at present afforded if Hongkong

manufactures compete with other Empire manufactures.

Even if we could r each a formula by which preferences

on certain goods supplied by the Empire for consumption

in the Colony could be afforded, it is very doubtful

whether the effect of these would be sufficient to warrant

the Empire giving preferences on Hongkong manufactures in

exchange. Moreover it is feared that any preferential

taxetion on goods for consumption in the Colony, necessitating

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