CO129-562-20 Whompoa Port- development 19-2-1937 - 4-4-1938 — Page 34

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embarking on the construction of a new port. Did the

Chinese, he asked, intend to encourage trade to go to

Whampoa by means of special concessions or tariffs ?

Colonel Li said that was their idea. The Ambassador

said that in that case wider issues would be raised

affecting our treaty position; but as those were matters

for the Central Government and not for the local authorities,

it was no use discussing them now.

Colonel Li said that the Chinese authorities were very

anxious not to antagonise the British over this port

development scheme since in case of war with Japan all

other ports would be blockaded and the Chinese would have

to look to the British to facilitate the import of arms,

etc. through Canton. The Chinese were doing all in their

power to develop their railways, roads and harbours, and

it was no secret that all this had a military purpose.

The Ambassador replied that the Chinese Government

had a perfect right to develop their communications and ports and a perfect right to ask us for assistance in such

work. We also had a perfect right to give such assistance. What political object the Chinese might have in building the railways, etc. did not concern us, since our interest in the matter was purely economic and was not directed

against anyone. He wished Colonel Li to understand and to make clear to the Mayor that we could only discuss these

matters on the economic plane. It was quite impossible for us to enter into any political or military discussions or considerations: these must be rigidly excluded. We could engage in nothing which could be interpreted as aimed at any third party. He had neglected no opportunity of making our position quite clear in this respect since

/his