CO129-571-15 Sino-Japanese War- manufacture and import of aircraft to China 18-1-1938 - 5-1-1939 — Page 114

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2.

very similar enquiry from the Douglas Aircraft Company

was received in May.

The matter was considered at an Inter-departmental

meeting at the Colonial Office on 28th April at which the

preliminary difficulty was encountered that a Cabinet

decision of November last prohibited the export of

assembled aircraft from Hong Kong to Chinese territory,

and it was not clear from the wording of the minute whether

such a prohibition applied to all British territory or only to Hong Kong. (It is now clear (vide Foreign Office letter of 24th June) that the latter interpretation is correct, and that the prohibition would not apply to aircraft manufactured in other British territory, e.g. Burma).

On strategic grounds the War Office and Air Ministry

representatives at the meeting held that a site in Burma would be preferable, but they considered it necessary that the company should be formed with a predominant share of British capital so that its activities could be controlled. The Burma Office representatives were non-committal at this stage on the ground that it had not been shown that the promoters would be willing to transfer their project to Burma, and that, as it was a purely commercial concern, it was not clear whether any specific Government permission would be required for the establishment of the factory except perhaps in respect of the acquisition of land. They felt, moreover, that the question was not sufficiently developed to be referred to the Government of Burma for

observations,

It is now clear that the export from British territory other than Hong Kong to China or Japan of assembled aircraft, whether military or otherwise, would not be regarded as

contrary/