CO129-571-16 New Territories 13-4-1938 - 12-12-1938 — Page 21

No. 9

16-7

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of resuscitating the abortive negotiations

for a commercial treaty.

Hong Hong would,

under that draft, have been required to make

certain concessions to China and to Chinese

feelings in the course of securing an Anglo-

Chinese "equal" treaty. If at all over the

next decade or so, it would be then to consider

whether any arrangement could be proposed with

regard to the New Territories, and possibly

this might involve some satisfactory working

agreement for the enjoyment by Hong Kong of

certain economic advantages in the New

Territories, and even of certain military

rights, in return for the premature restoration

to China of the nominal sovereignty of the

New Territories without waiting for the lease

to expire in 1997.

In his note at the top of Sir G.

Northcote's attached letter of the 8th of June,

an

the S. of S. has written instruction to discuss

A

with the F.0. and to put up a reply to the

Governor. I suggest that a copy of that letter,

together with a copy of the Governor's despatch

of the 11th of June, should now be sent to the

F.0. and to the Service Departments proposing

a discussion, but without at this stage

offering any C.0. views. It really comes down

to the question whether now is the time to

raise the matter with the Chinese Government,

and that must be largely a question for the

consideration of the F.0. in the light of

general political considerations, and H.M.G's

policy in China. I suggest in the meantime

the S. of S. could only usefully reply to the

Governor,