CO129-571-16 New Territories 13-4-1938 - 12-12-1938 — Page 149

Copy

to F.O.

3

SECRET

Phong Kong.

عنا

Government House,

Dear or Ormesby. Gone,

13th April 1938

One or two ideas appear to be floating about,

the object of which is to provide China with some capital and

the British Empire with a valuable consideration located in

China.

Has it been suggested in this connection that Great

Britain might

(a) buy the new territories, or

(b) pay a premium for an extension of our lease by

another hundred years, or more?

The new territoties are essentially necessary to

Hong Kong from the economic as well as the defensive point of view. Retention of Hong Kong is essentially necessary to Great

economically speaking;

Britain and, indeed, to the Empire

-

and all the more so in view of Shanghai's jeopardy: it is

equally necessary to China from the standpoint of defence, as the present hostilities have demonstrated. China in her present mood would recognize this latter point: when the renewal of

the lease comes up she may not be so disposed.

I am sending a copy of this letter to Clark Kerr

but showing it to no one else at the moment.

your

socialy

The Right Honourable,

W.G.A. Ormsby-Gore, P.C., M.P.

Z.And. Korthants