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CONFIDENTIAL
ANT 16./2/20
(227
UNITED KINGDOM MISSION,
35-37 RUE DE VERMONT,
п Катпен
1202. GENEVA,
SWITZERLAND.
11 September
HKKLIM An witmedking.
Kear Laird,
Petter. Ind.
discurs.
Hong Kong and Generalised Preferences
い
19670.
lim
En 1929
1665
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Paragraph 4 of UKDEL OECD telegram to CO No.75 of 9 September said that that part of the conversation I had with Karuda of the Japanese delegation dealing with the political arguments in favour of extending generalised preferences to Hong Kong would be reported separately by letter.
2. The exchange on political aspects arose from Karuda's earlier remark that we had placed too much emphasis in our aide memoire presented in Tokyo on economic considerations and too little on political factors. This led me to observe that there was a strong political case but that it was not one which easily lent itself to exposition in the sort of document we were handing over. The case was that Hong Kong in its present form provided a very useful means of maintaining contact between mainland China and the western worlä in both directions. The Chinese not only found Hong Kong to be eco onically profitable to them, which it undoubtedly was to the tune of providing, by one means or another, about a half of their foreign exchange; but they also used their semi-oicial agencies in the Colony as a means of maintaining in formal contact with a number of western countries over trade and other matters. This was of benefit to the world as a whole.
7.
I then went on to point out that the continuance of this sort of situation depended very largely on the maintenance of political and social stability in Hong Kong itself - and that this in turn was linked to the continuance of economic prosperity in the Colony and the improvement of the standard of living of the people. to living standards, such as could be brought about by widespread üiscrimination against Hong Kong exports, could endanger this stability, as well as making Hong Kong in its present form a less attractive proposition to China all round.
Any check
4. To this Karuda replied that the Japanese had indeed found Hong Kon a useful doorway into China and that they had made a good deal
f use of contacts through Hong Kong. But they were now anxious to establish, as he put it, their own direct relations with China through Shanghai. If they managed this, Hong Kong would be less useful to them in this respect. I responded that I could see how Japan, as a major country and a neighbour of Chine, would naturally
«●uld prefer to establish her own direct contacts; but it was nevertheless
E.C. Laird, Esq., MRD, CM
Hong Kong Dept.,
FCO.
/true
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