CO129-588-24 China- British extra-territorial rights- negotiations with China 23-11-1942 - 1-1-1943 — Page 313

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nisi has already been granted to arrange for the decree to be

e absolute, but it is hoped that this could be done without any explicit provision being required.

3. Points (1) and (3) in this section of the Department of State's message have already been dealt with above (under 1 (1) and (4)). This leaves outstanding point (2) · inland and goastal navigation.

As regards His Majesty's Ships, see under 1 (6) above. AB regards coastal trade and inland navigation by merchant vessels, the Foreign Office think it greatly preferable to adhere, at least in the first instance, to the attitude set out in the memorandum sent to His Excellency the American Ambassador on November 12th. In doing so they do not consider that they are attempting to preserve unilateral and unequal privileges in China because in the United Kingdom, the Colonies and in India, Chinese shipping is in practice permitted to engage in these trades. The Foreign Office would for instance call the attention of the epartment of State to the Burma Convention concluded between Great Britain and China in 1894 of which Article Xll reads as follows:-

"The British Government, wishing to promote frontier trade between the two countries by encouraging mining enterprise in Yunnen and in the new territorial acquisitions of China referred to in the present Convention, consent to allow Chinese vessels carrying merchandise, ores, and minerals of all kinds, and coming from or destined for China, freely to navigate the Irrawaddy on the same conditions as to duce an other matters as British vessels."

The Foreign office propose that the above should be pointed out to the Chinese Goverment. If, however, the Chinese Government insist on their request to have the subject or coastal trade and inland navigation included in the proposed exchange of notes, His Majesty's Government would be prepared to comply on the following lines. His Majesty'a Government would state that they do not reserve my unilateral treaty rights which they possess in respect of coastal trade and inland navigation, in return for which the Chinese Govern- ment would state in effect that while reserving the right to limit these trades to the Chinese flag, they would permit the existing practice to continue pending further arrangements.

His Majesty's Goverment have now received proposals similar to the above from the Chinese Government for the amendment of the British draft treaty and for an exchange of notes. In the Sino-British exchange of notes the Chinese Government wish, however, to add to the matters for abrogation already mentioned to the United States Goverment "the employ- ment of a foreign national as Inspector General of the Chinese Maritime Customs. since the United States Goverment are also interested in the Chinese Customs and the financial obligations secured thereon His Majesty's Government would be glad to learn their views on this last mentioned request. They for their part are prepared to agree to the inclusion of this point in the exchange of notes, but they would propose to express the hope that the Chinese Government will continue to maintain the administration of the Customs service as at present constituted both in China's own interest and those of the holders of Chinese bonds scoured on the Customs revenu

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