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 26

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Treasury Chambers,

Whitehall, S. WH.

13

26

3rd December, 1936.

Dear Colonial Secretary,

I mentioned to you the other day that your Cabinet

Memorandum (P.E.J.(35) 6) took a much more unfavourable view

of the advantages to Hongkong of a Customs union with China

than I had found prevailing out there. In order to check

my memory I asked Norman Young to give me his comments

and I send them along, not in any controversial spirit, but

only to let you see them.

I must say that in such discussions as I had with the

officials in Hongkong the view was generally expressed that

nothing could help Hongkong substantially so long as they

were outside the Chinese tariff wall and no doubt was felt

that a Customs union would greatly benefit their economy.

Of course, it was assumed that a free port area could be

maintained, and I did not pursue the conversations very far

as the situation then prevailing in Kwangtung clearly made

any negotiations with the National Government for a Customs

union impracticable.

The Rt. Hon. W. G. A. Ormsby-Gore, M. P.