CO129-571-15 Sino-Japanese War- manufacture and import of aircraft to China 18-1-1938 - 5-1-1939 — Page 96

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Enclosure No. 2.

3.

- 2 -

The application has now been renewed by

another firm of solicitors on behalf of the same group

of Chinese. A copy of the solicitors' letter

describing the project is enclosed and a request is made

in the last paragraph for a telegraphic reply as to

whether the project might be allowed to proceed.

4.

This application must, I think, be considered

together with that put forward by Mr. W.D. Pawley and

dealt with in the correspondence referred to in the first

paragraph of this despatch. If it were thought

desirable now to permit such a project to proceed I think

it would only be fair to give a further opportunity to

the earlier applicants. I feel, however, that this

whole subject needs careful consideration not merely

from the point of view of the existing war situation but

also with the object of securing the most economic

development of this activity if it is to be allowed to

develop at all here. I believe that it will eventually

be very desirable that a factory or factories engaging

in the assembly of aircraft should be established.

Apart from other advantages they should be a definite

help to the development of the air-port, to which they

are as natural an auxiliary as ship building yards are to

a great sea-port ; but I am inclined to think that such

a development requires some regulation and control and

that probably a limitation of the numbers of factories

would be desirable. There might, e. g., be one assembly

factory associated with British interests and one with

American.

5.

In addition to your decision on the particular

application now in question I should be grateful for