CO129-558-11 Mission of Sir F. Leith-Ross to China- proposals for a Hong Kong - China customs... 29-9-1936 - 30-12-1936 — Page 117

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Government, on the lines of the recent credit to the

Soviet Government, for financing railway equipment or

public utility contracts entered into with British firms.

Such a credit would be of special value in regard to

railway equipment orders. Apart from large contracts,

the possibility should be explored of export credits

facilities being made available for ordinary trade goods,

e.g. textiles, and also of guarantees being granted to

British Merchants in China, instead of only to exporters

here. I cannot emphasise too strongly the importance

which I attach to the question of export eredits on which

depends the main possibility of expanding our export trade

to China. I am very glad to hear that the Export Credits

Guarantee Department has arranged to send out a special

representative to China and I hope that he, working

in conjunction with the Commercial Counsellor at Shanghai,

will be able to frame a satisfactory system which will

enable guarantees to be arranged locally and promptly for

all suitable projects.

(6) Railway Loans.

China also needs long-term capital for

development purposes, particularly Railway construction.

Until recently, any such loans were out of the question

owing to the defaults on many of the existing loans.

During my stay in China, the Chinese Government arrived

at settlements of several of the British Loans in

default and made offers, in the other cases, which in my

opinion were reasonable and should be accepted. The

door, is therefore, open for new financing and a small

loan, for the completion of the Hangchow Ningpo

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