CAB129-45 — Page 418

Page 418

(b) Export and Import Firms, and Shipping and Insurance Interests

5. British firms in the export/import business, certain packing firms, as well as shipping interests have been in a much better position and during 1950 they were making reasonably good profits. Capital and essential goods, trucks, steel rails, rubber, medicines, raw cotton and oil (until July 1950) have been imported in con- siderable quantities into China and part of the handling of this business was done by British firms.

6. While these traders have come up against the competition of Chinese Government monopolies, their services are hard to replace; moreover Chinese stockpiling during the last year has in some cases brought them increased business. On the other hand, the American embargo on goods to China and Chinese appre- hensions of further economic" sanctions" have resulted in the Chinese Government introducing a strict barter system with insistence on imports actually arriving before exports are released. This is now leading to a reduction in business, although its long-term implications for British traders are still hard to assess. All this and the increasing trade between China and the Soviet bloc. make the long-term prospects of our traders appear somewhat bleak.

7. Recent figures show that some 40-60 British ships of all types continue to engage in trade with China or between Chinese ports. In some cases these ships are substantially Chinese-owned although under the British flag. Most of the insurance interest is carried on the British insurance market. British ships have (on several occasions) been shelled by Chinese shore batteries in the approaches to Hong Kong. Protests in Peking have so far not elicited any reply. British ships have also encountered delays and administrative difficulties in Chinese ports. For example, the Flintshire, which was held for some time in Tsingtao for alleged smuggling of arms, was only released after her master had signed a "confession." In addition recent Hong Kong reports state that quite a few British masters are showing marked reluctance to sail to Chinese ports.

Consulates

8. His Majesty's Consular officers are not recognised in their official capacity. Except on personal questions they are not permitted to have any dealings with the Chinese authorities. They can, therefore, do nothing to protect British subjects in their districts. Despite this their presence helps to maintain the morale of the community. His Majesty's Vice-Consul at Mukden was expelled towards the end of last year. His Majesty's Consul-General at Tihwa was deported in January 1951: His Majesty's Consul-General at Kunming has recently been ordered to vacate the Consulate at ten days' notice. This has compelled us to instruct him to apply for an exit permit. His Majesty's Consul at Nanking was also recently humiliated by the local authorities who forced him to sign an apology for his intervention on behalf of an Irish nun who had been arrested. At Tsingtao the Consulate Chinese accountant has been arrested. At Chungking His Majesty's Vice-Consul's Chinese servants have been arrested. A short while ago we decided to close, by May 1951, our Consular posts at Chungking, Kunming, Nanking, Hankow, Amoy and Tsingtao because the Chinese would not give visas for any replacements of Consular staff and British subjects and interests in these districts had been greatly reduced.

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Missionaries*

9. Almost all Protestant missions in China, British and American, have now taken the decision in principle to withdraw and are in fact getting their members out as fast as possible. Directives from Peking to provincial authorities pointing out that all foreign missionaries are tainted with "imperialism" and potential spies requiring careful watching were issued in the autumn of last year. Since then a number have been arrested and some subsequently released. At the present time, some thirty or so are in gaol (almost all of them being American and Canadian) which is probably more than at any time since the anti-foreigner period of the Boxer Rebellion (1900). There have been several cases of public trials, confessions, &c. Charges are frequently not proferred. Access to persons so arrested is normally denied. A typical case is that of Dr. Stewart Allen, in charge of the Canadian Mission Hospital at Chungking (formerly our Embassy Doctor), a devoted and highly competent4medical man and highly respected by the Chinese18Hof yours

* This section refers also to Commonwealth and American missionaries.

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