CO129-593-1 Future policy- unofficial views 18-6-1946 - 28-12-1946 — Page 11

NOTE

11

10

Paragraph 1

Paragraphs 2-6

Paragraphs 7-12

Paragraph 13

The increased importance which Hong Kong has now assumed as a trading centre for China and as a centre of British culture in China is fully recognised in the Colonial Office. The suggested policy that Hong Kong should become the chief point through which Britain, and eventually Europe and America, contributed to the economic, political and cultural development of China, goes much further. Its adoption, as a declared policy for Hong Kong, might well embarrass us in dealing with any claim for the return of Hong Kong to China. It might be argued, for example, that there is no more case for the retention of Hong Kong on these grounds than there was for the retention of the extraterritorial privileges which were abolished in 1943.

The words of appreciation of what has been done and is being done in Hong Kong are most welcome, particularly in view of the ill-informed criticisms that have been made lately.

There is no reason to think that Hong Kong will be prevented, by lack of funds, from carrying out rehabilitation and development. Arrangements for a loan are already in train. The four proposals put forward in paragraphs 9 to 12 inclusive for assistance by H.M.G. must of course be subject to the decision on the general question of the future of Hong Kong which will be coming before Ministers shortly. A paper on the subject is being considered by the Far East (Official) Committee on Wednesday. Subject to this, the proposal for a building scheme, in paragraph 9, can be put to the Governor for his views, though I imagine that the difficulty at the moment is shortage of building materials and possibly labour. The two proposals, in paragraphs 10 and 12 respectively, relating to the abolition of military lands and an increase in Hong Kong's quota of British goods for re-export, will have to be taken up with the Departments concerned here before we seek the Governor's views. I imagine that the Governor would welcome both of these proposals. The fourth proposal, in paragraph 11, regarding the projected airfield and the arrangements for financing the cost are very much under consideration at present. One of the difficulties is that the site for the airfield is in the New Territories, the lease of which has only another 50 years to run. Neither the Ministry of Civil Aviation nor the Air Ministry are at present interested in the construction of this airfield and unless they change their views, the cost will have to be met by the Colony, possibly with some assistance from H. M.G. under the Colonial Development and Welfare Act. I see no reason why the project should be held up for financial reasons. The Governor has recently made a proposal for using an alternative site within the boundaries of the Colony proper which would, however, cost about £10,000,000. This alternative is also at present under consideration.

The University proposals are at present with the Foreign Office, with a suggestion that there should be a joint approach to the Treasury by the

Foreign