CO129-580-2 Sino-Japanese War- British policy and reactions in Hong Kong and Malaya 27-7-1939 - 3-2-1940 — Page 17

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from supplying many of the articles on the Chinese list of require-

ments under the Export Credits Agreement, but there are certain

articles placed high in this list which we hope to be able to re-

lease shortly. As Dr. Kung is aware, tentative discussions are in

progress with P.7.Kuo for an agreement by which we should exchange

finished goods in return for raw materials hitherto furnished to

Germany by China under her barter arrangements and other commodities

which we ourselves require. further telegram follows on this

point.

3. We have no intention of interfering with shipping facilities at Rangoon except possibly in respect of Geren goods shipped after the 4th December, when each application will be considered sympathetically on its merits by the Eneny Exports

Committee.

4. o munitions can be supplied from this country. As regards supplies from India (see my telegram No. 1114 [of the 13th November]), Government of India's offer appears to have been intended to cover supply of commodities, but not of munitions and lethal weapons.

5. His ajesty's Government are not prepared to perit the

construction of a factory in Burma for assembling aircraft for China. It also appears somewhat superfluous now that Inter-Continent Cor- poration have set up an assembly plant at Toiving.

6. ith regard to financial assistance no such statement as that mentioned in the last paragraph of your telegram No. 101 Tour

Series has recently been made to the Chinese Ambassador, though he has

been told that our policy is to keep closely in line with the United

States Government and to do nothing that is likely to embarrass them.

Our good will is, however, exemplified by the extension of the

period within which orders can be placed under the Export Credits

Agreement.

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