CO129-571-15 Sino-Japanese War- manufacture and import of aircraft to China 18-1-1938 - 5-1-1939 — Page 113

SECRET.

Memorandum regarding the proposed erection in

Hong Kong of a factory for the manufacture of commercial and military aeroplanes.

113

In February last the Governor of Hong Kong reported to the Colonial Office that he had been approached by Mr. W. D. Pawley, a citizen of the United States, who, in association with Mr. Stanley Dodwell, a member of the Legislative Council of Hong Kong and a business man of high reputation in the Colony, had formed the Inter-Continent Corporation (China) Limited, a Hong Kong registered company, with a view to establishing in the Colony a factory for the manufacture of commercial and military aircraft. The advantages which the promoters saw in Hong Kong were favourable climatic conditions, large quantities of skilled labour at very reasonable prices, a free port, good aeroplane facilities both for land and sea planes and a proximity to several large markets with, in addition, the fact that Hong Kong is becoming more important each year as an air line terminus. It was proposed that a large proportion of the capital (which included about £100,000 for building and machinery) would be British. The Governor was favourably disposed towards the proposal on the grounds that it would improve trade and bring employment and that it would encourage local flying. But the Defence authorities raised objections, the G. O. C. on the ground of the location which the promoters contemplated for the factory, and Marshal of the R.A. F. Sir E. Ellington who deprecated such a business being entirely under American control. In principle, however, the latter thought that the establishment of an aircraft factory in Hong Kong would be welcomed by the Air Ministry.

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