CO129-564-10 Aeroplane assembly depot- proposed establishment 7-9-1937 - 14-1-1938 — Page 102

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Decypher. Mr. Gage (Nanking)

31st August 1937.

D.

(Wireless)

1st September 1937.

R. 8.15 p.m.

1st September 1937.

No. 404.

Secret.

Malley has informed me confidentially that Madame

? evolved

Chiang Kai-shek has [gp. undec.] a plan for establishment in new territories Hongkong of an acroplane assembly depôt. Froposal is that a company should be registered in Hongkong ostensibly for training air mechanics but in reality to receive and erect new aeroplanes destined for Chinese Air Force. Company would in practice be wholly controlled and operated by Chinese government. It is proposed that site for this depôt should be located somewhere near Shamchun having a runway in Chinese territory at taking off of flying [gp. undec] aeroplane with assembly depôt in British territory.

Malley said that it was proposed to send some reliable British subject to Hongkong immediately to negotiate with British authorities for registration, permits, location etc. and that he would probably be selected. He asked my advice. I said that I could not hold out any hope of Hongkong authorities agreeing to such a proposal which if accepted would obviously place them in a very awkward position.

Adaressed to Foreign Office, No. 404 August 31st, repeated to Air Attaché Shanghai Peking Hongkong Commercial Secretary Hongkong, General-Officer-Commanding and Commercial Counsellor.