ENG-1950 — Page 16

warning. In August these attacks grew to serious proportions and included firing upon one of H.M. ships, which was compelled to return fire in self-defence. About the same time General Yeh Chien-Ying, Governor of Kwangtung, issued a statement alleging the violation of Chinese territorial waters and territory by shipping and aircraft in the vicinity of Hong Kong and threatened retaliatory action in the event of any repetition. Representations in the matter were made by H.M. Charge d'Affaires in Peking, and as a temporary measure shipping using the approaches was warned to avoid passage' through Chinese territorial waters as far as was practicable. By the end of the year the Central People's Government had returned no reply on the subject.

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It was stated in last year's report that the continued influx of Chinese into the Colony had become a cause for concern. In the spring of 1950 the numbers entering Hong Kong as a result of deterioration in economic conditions in Kwangtung and Kwangsi showed a further alarming increase bringing the estimated population of the Colony to 2,360,000, and in May it became necessary in the interests of the Colony's economy and health to introduce a form of immigration control. This decision was sharply criticised at the time by the Chinese authorities, but there is no doubt that the controls imposed have proved a most necessary check upon immigra- tion, although the population of the Colony still remains at a disturbingly high level.

Complicated litigation developed in the case of the seventy-one China National Aviation Corporation and Central Air Transport Corporation aircraft remaining in Hong Kong and the problem was made even more difficult in view of an act of sabotage which resulted in damage to certain of the aircraft in dispute. Following the rejection of appeals by the American interests concerned for the appointment of receivers for the assets of the two companies, the Supreme Court of Hong Kong (Jurisdiction) Order-in-Council of the 10th May was issued to ensure that the aircraft in question should be detained in Hong Kong until the question of ownership should be legally determined. The directions issued by the Governor under this Order-in-Council provided for the due maintenance and protec- tion of the aircraft during the period of their detention. The position at the end of the year was that application to proceed ex parte had been granted by the Court and a provisional date in 1951 set for trial. The position of the Hong Kong Government in this matter remains of course unchanged. The case is a purely legal one and there can be no question of any interference on the part of the executive authorities.

The traditional friendly relations between Hong Kong and Macao have been maintained as in previous years and both colonies continue to have many problems in common. The Governors of the two colonies exchanged unofficial visits and the Commissioners of Police of both colonies have continued their close cooperation.

Local Affairs

A milestone in the economic and social history of the Colony was the appointment in February of the first Arbitration Tribunal to be set up under the Trade Unions and Trade Disputes Ordinance

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