CO129-571-16 New Territories 13-4-1938 - 12-12-1938 — Page 12

territory,

indeed

in the fing horserown of thing Kong itself.

Kany

ग

лин

with the British

Para.6 of despatch. It is undoubtedly true that

capital in H. Ky sahilal

the injurious effect upon British trade of a prospect

of non-renewal of the lease would be snown long before

the actual date of its expiry. I am not sure, however,

that it is sound to argue that because China may be

impressed at the moment with the advantage of Hong

Kong being possessed by a friendly power, she will

therefore be ready to renew the lease. Chinese

national feeling is obviously keyed up, and though at

the moment it is directed almost entirely against

Japan, I suggest it is obvious that the Chinese

Government would not view with favour the giving away

of Chinese territory to any Power whatever. We have

already informed the Governor that the question of

outright purchase is not worth pursuing. It is possible that the Chinese Government may be more willing to

consider the extension of the lease in return for a

substantial consideration, though I suggest that even

this is doubtful. In any case it seems to me that

negotiations to this end would have a most unfortunate effect both on the Chinese public opinion and on public

opinion elsewhere. The negotiations would inevitably

appear like blackmail, and H.M.G. would be accused of

taking advantage of China's present weakness in order

to obtain a settlement favourable to herself.

particular, the effect on American public opinion,

which the F.0. say they are so anxious to conciliate,

would probably be disastrous. Finally, I cannot see

In

any prospect of H.M. G. spending so large a sum as

£20,000,000 (in any case a purely hypothetical figure)

at the present time. I suggest that from every point

of view it would be better to wait till the end of

hostilities before making an approach to the Chinese

Government.