88
to strengthen the Provincial as against the
Central Governments may now be about to bear
fruit; and in the commercial sphere the
practical co-operation which has existed in
the control of arms exports into China may
be of the utmost value in the future.
From the British point of view it
is more than ever necessary to avoid where
possible any source of friction with the
authorities in Canton, as recent events have
now brought Hong Kong into direct contact
with representatives of the Central Government.
Friction with the latter would have a far
worse effect on Anglo-Chinese relations than
friction with the previous Provincial Government.
From the point of view of Hong Kong
the position has been analysed by the local
Commission referred to earlier in this
J
memorandum. They felt that in the present
circumstances the continued existence of Hong
Kong as a free port with few bilateral
economic arrangements with other countries
was somewhat of an anomaly in an increasingly
"autarchic"
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