CO129-562-20 Whompoa Port- development 19-2-1937 - 4-4-1938 — Page 32

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Colonel Li said he would report to the Mayor. He seemed to consider the Ambassador's proposal that the Mayor should keep in close touch with Mr. Pelham as the most satis- factory method of liaison, though he did not reject the idea

of a Sino-British Council, to which he intimated that he would recommend the Chinese side to nominate representatives.

On the subject of the Whampoa Port development scheme the Ambassador reminded Colonel Li that when he had

spoken of considering Hong Kong, Whampoa and Canton as three complementary parts of one unit and had suggested that con- sultation between the Hong Kong and Chinese authorities might lead to some solution which would be in the best interests of all three, he had always been careful to add that he was expressing a personal opinion and that he did not know the views of Hong Kong on the subject. Colonel Li said that the Mayor had expressed concern lest this scheme should cause friction between the Chinese and British auth- orities and he had welcomed the Ambassador's suggestion for discussions as to how to reconcile the conflicting interests. He had vividly in mind that the Chinese development of Hulutao and the building of railway lines competing with the South Manchuria Railway had contributed to the seizure of Manchuria by the Japanese. The Ambassador replied that the

Chinese need have no fear on that score: there was no danger

of our seizing Kwangtung if the Chinese developed Whampoa to

compete with Hong Kong. He added that we recognised the

right of the Chinese to develop Whampoa if they wanted to do so, and we would do nothing to interfere with that develop- ment and would certainly not regard it as an unfriendly act;

but we had our own views and we considered that the port not

only was unnecessary but that it would be uneconomic; and

/ since