CO129-552-6 Traffic of arms to China 2-1-1935 - 27-12-1935 — Page 355

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to be no objection in this instance to permitting the shipment, even though one part of the consignment is stated by the purchasers, apparently falsely, to be destined for military use. In this case, however, care should be taken to avoid any recognition, either express or implied, of the "huchaos" reported to have been issued by the South West Political Council. The Chinese Customs authorities would then be responsible for allowing the entry of the consignment;

having regard to the control exercised over

the Customs in the Canton area by the South West Political Council, no difficulty would, in the opinion of Sir John Simon, be likely to arise.

3. If, however, it is the practice of the Hong Kong Government to require a "huchao" issued by the Chinese Central Government before permitting the export of explosives to China when such explosives are destined for military use, it is obvious that export cannot be allowed in this instance unless the exporting firms are able to satisfy the Governor that the goods are all really required for genuine commercial purposes. Should they be unable to do this,

Sir John Simon would be prepared to consider the desirability of instructing His Majesty's Minister at Peking to suggest

to the consignees that they should

necessary

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J

with his support if

request the Chinese Central Government to issue

the necessary "huchao"; Sir Alexander Cadogan might be instructed also to point out that, if the "huchao" were not issued, the order would more than probably go to a German

firm who would be able to import without interference, and

that serious injustice would thereby be done to British

industry./