CO129-571-15 Sino-Japanese War- manufacture and import of aircraft to China 18-1-1938 - 5-1-1939 — Page 12

18. fov bonf

Gov.

Desires

early

consideration be given

to erect

factory 12

to application ofor permission to

5.2.88.

See enc.3.

The proposal is that a factory should be

by a U.S. citigen,

erected in Hong Kong for the manufacture of commercial

and military aeroplanes. It seems to me that this

proposal can be considered from three aspects.

1. From the point of view of the Colony in

From this point of view I think

normal circumstances.

it is clear that in principle the proposal should be

encouraged. It would, as the Governor points out,

improve trade and bring employment. It would encourage

local flying and would give British capital an early

footing in a part of the world where the manufacture

of aircraft will probably become important. From the

military point of view it would add to the local

resources for the maintenance of aeroplanes and

educate a body of skilled labour which would be of

great use in war.

2.

From the military aspect. Here it would

appear that unqualified approval cannot be given. For

the reasons given above it would be useful as adding

to local resources for both maintenance and supply of

aircraft, but the G.0.C. states that ne feels that it

would be better to oppose the proposal. Actually many

of his objections have been met by the removal of tne

proposed site from a position adjacent to Kai Tak

Airport to one which is over a mile from the R.A.F.

establishment and has no direct access to the

aerodrome. The G.O.C. still feels, however, that the

question of sabotage would still arise from the close

proximity to a Service establishment "of an organisa-

tion containing skilled and often traitorous personnel".

He also feels that there is danger in that the factory

would