CO129-588-24 China- British extra-territorial rights- negotiations with China 23-11-1942 - 1-1-1943 — Page 5

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(2) The right to be accorded to Chinese

nationals and companies to acquire and hold rights of all kinds in real property in British territories on the same conditions as British nationals and companies.

Our particular difficulty in this respect arises out of our policy of reserving to Europeans land ownership in the Highlands of Kenya. This reservation is aimed at Indian British subjects and is not specifically provided for by law, but has been published as the definite and effective policy of the Government. If the Chinese were to be given the specific treaty right proposed, it would, whether the right was exercised by the Chinese or not, knock the bottom out of that policy with acutely embarrassing results for us and the Kenya Government. The Government of India have also something of the same

The sort of problem and the Government of Burma too. latter have particularly warned the Foreign Office that the Government of Burma may in future have to pass legislation aimed at restricting Indians in the acquisition of real property in Burma, and if this happens, it would clearly be out of the question to grant Chinese nationals rights which were withheld from Indians.

The Foreign Office view hitherto has been that as these negotiations with China are intended to abolish all "unequal" treatment of Chinese, it is as a matter of major policy of H.M.G. that the abolition of restrictions of this sort against Chinese may have to be faced in particular British territories. I should not have thought that this is a necessary result of the establishment of "equal" relations with the Chinese. The present treaty is primarily one for abolishing British extra-territorial rights in China; and provided that in other respects there is reciprocity viz. both we and the Chinese in our own territories should have the right (it seems to me to be a natural sovereign right) to reserve particular areas for particular communities, there should be no conflict with the establishment of an "equal" position. It is not, of course, quite so simple as that, but a we adhere to that principle, I do not see why we cannot be accommodated; and we must work closely in touch with the Burma Office, seeing that they have very much the same problem vis-à-vis Indians. The control of indiscriminate entry of Chinese into Malaya, and no doubt to other British territories, by means of immigration control is a natural sovereign right which we must be free to exercise and by which we must be able to adjust the immigration of Chinese labour in order to prevent periodical unemployment problems of vast dimensions arising.

Of the above two major points, it is very desirable that we should, with the least possible delay, let the Foreign Office have a clear and authoritative statement of the Secretary of State's attitude.

Sallent.

29.11.42.

Ked

30/x/42