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 38

CO129 Colonial Office Hong Kong Records 理藩院香港檔案 All

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The

non

-Chinese entrepét de would be

definitely hindered, although the damage might be

mitigated if a part of the harbour could be set aside as

a free port.

7.

The economic advantages to be gained from a

Customs union consist, therefore, in the benefits in

respect of the Chinese coastal trade and Hong Kong's dauert's

manufactures. The first could probably be secured

without find come union

almost as fully by an agreement with the Chinese

Government to allow Chinese goods to retain their national

status when shipped via Hong Kong. The other is

without cas Come unim unlikely to be obtained by any special agreement, because such an agreement

i

would arouse strong opposition by other foreign

countries, particularly the Japanese, who could probably

prevent it by the invocation of most-favoured-nation

rights, and probably equally firm opposition from

Bub Chinese manufacturers in Shanghai and South China. this a full Custome union would

vse oppraition opposition would, however, be aroused no less by a full from exactly the same quarters, sitio in fact Customs union and might well be politieally strong-

table that itwouth.

Can Cas coms union -enough to prevent it.-agreement could be conclud

infa

of such oppositio.

8.

On the other hand there are two important dis-

advantages in a Customs union: first, the loss of the

which might involve great

Free Port status, particularly the damage to the non-

Chinese entrepôt trade; and second, the inevitable increase

in the cost of imported goods which must result from the

application of the Chinese tariff to Hong Kong's own

imports. It must be remembered that three quarters of

these imports come from foreign countries and they consist

some of which can be produced in thing largely of foodstuffs and necessaries,

There must,

therefore, be some increase in the cost of living.

might have various repercussions.

That

It would do something

to

5-

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