CO129-571-15 Sino-Japanese War- manufacture and import of aircraft to China 18-1-1938 - 5-1-1939 — Page 138

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7.

It is therefore clear that practically the

same conditions obtain now as induced the Cabinet to

make their previous decision about the export of aeroplanes

from Hong Kong, but that there is no Cabinet decision

adverse to the establishment of such a factory in some

other British territory.

8.

It also seems clear that the establishment of

such a factory in e.g. Burma, would have great strategic

advantages for this country as an independent local source

of supply in any Far Eastern War,

9. I am therefore to state that, in Lord Halifax's

view the political considerations are still in the main

very similar to those which prompted the Cabinet to give

their previous ruling against the export of assembled

aeroplanes from Hong Kong territory.

As it does not

appear that any such ruling has been made in the case of

Burma, the Governor of Hong Long should be informed that

there is no objection to setting up the factory in Hong.

Kong and indeed in normal times His Majesty's Government

would welcome its establishment there, but that as long

as the present hostilities lasted it could not be permitted

to export completed aircraft to China or Japan. If,

however, the promoters of the scheme would consider

establishing a factory in Burma, this prohibition would

not apply there.

10.

Copies of this letter are being sent to the

War Office, Admiralty, Air Ministry, Board of Trade and

Burma Office.

I am,

Sir,

Your obedient Servant,