CO129-563-5 Macao- relationship with Hong Kong 6-7-1937 - 13-12-1937 — Page 38

3.

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9.

But from every point of view it would seem that

for the present Macao has little to fear from this irredentism

being as she is the least rich of the various possible prizes,

even if the most vulnerable. One has always heard that the

fall of Macao will be the first manifestation of the so-called

Yellow Peril, but there seems little danger of this at present

either from a partly organized armed mob or, still less, from

regular troops under Nanking's orders.

10.

Dr. Barbosa spoke of the Mediterranean but I need

only say that he does not fall into the common error of trying

to fit the Sino-Japanese conflict into the political dichotomy

of present-day Europe. Anything may have happened before you

receive this despatch, but as I write it would seem that both

Germany and Italy are finding it difficult to affix the

proper labels in Asia at a time when both are actively helping

China with munitions and with those "advisers" who alone have

made China's resistance possible. The Government of Portugal

is said to be anti-Bolshevik but Dr. Barbosa takes the

Macchiavellian view that out here this may safely be left to

Japan to deal with.

11.

Much has been made of Japan's peaceful penetration

in Macao and in other Portuguese colonies in Asia. The Macao

waterworks negotiations in 1935 and 1936, of which you are

aware, are a notable example, and besides these I was told of

an important land transaction in Timor, an attempted sub-

stitution of Formosan sugar for the Mozambique product, and,

in Macao itself, the question of certain concessions, salt and

alcohol in particular. Dr. Barbosa showed no signs of treating

this "bogey" too seriously though he is frankly against

Japanese intrusion and would from all points of view welcome

British capital in cases where foreign capital in Macao is

necessary.