FO371-23517 — Page 226

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private Chinese interests, and the British Metals

Corporation, the latter being the agency making possible

a firm contract to purchase the annual tin output.

It is further suggested that this Corporation

arrange that out of the original credit £150,000 be used

to pay for the export and erection of a smelting plant in

China. The building of a tin amelting plant is a highly

specialised business and it is probably true that only

English interests are qualified to undertake the work;

the British Metals Corporation and its associates are the

leaders in this field. Two American attempts to amelt tin

in the U.S. A. have proved complete failures.

It is likely that as part of a general scheme

and as compensation for all China's tin output being

brought to a standard which can be marketed internationally

China would needs become a member of the International Tin

Cartel. such negotiations are likely to take a considerable

time and be particularly complicated insofar as Chinese

internal arrangements are concerned. It is in this

connection and watching over the subsequent efficient

working of the scheme in China that the China Development

Finance Corporation, as a private Chinese interest, could

be of special assistance..

The erection of a smelting plant has special

importance as in 18 months to two years the foreign

exchange accruing to China from her tin industry would

be increased with the additional advantage of centralisation.

As mentioned above, this second part of the

scheme is likely to involve considerable negotiations but

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