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 124

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(11) British Position in Shanghai.

Shanghai is not China, anu some of the characteristics

of Shanghai are not altogether creuitable to the Britısl

merchant comunity there. All the same, Shanghai is a

remarkable monument to British enterprise in the development

of China and it remains the centre of British interests in

that country. The position of the Settlement should be

maintained as fully as possible. Provided that the

administration gives uue consideration to the reasonable

uemanus of Japanese residents in the Settlement, our preãomi-

nant position there is not likely to be challenged by Japan:

and the difficulties between China and Japan elsewhere have

for the time being made the Chinese less anxious to press

for a radical change in the position of the Settlement whose

existence is helpful to them in any respects. The ad-

ministration shoula however be improved end the Settlement

authorities should be ready to examine complaints, both from

the Japanese (e.g. on provision of schools) ena from the

Chinese (e.g. on tax privileges) and to meet reasonable

requests.

one.

(12) Position of Hong Kong.

The present position of Hong Kong is not a happy

Economically, a part of China, the colony is faced

by an ever-growing tariff wall and is feeling more uña more

the competition of ports like Shanghai which are inside that

wall. The difficulty was accentuated by the currency

policy followed by Hong Kong in 1935 and 1936: and some

improvement has taken place since the curency change maue

last December. But the permanent future of the colony

aepenas on the possibility of traue with China and the

Question should be considered whether it would be possible

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