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7th August, 1940.
7th August, 1940.
Decypher:
Sir A. Clark Kerr
(Shanghai).
D. (BY W/T)
R. 9.20 p.m.
No.672.
ZZZZZZZZZZ
7th August, 1940.
(34601.20
Your telegram No. 37 to Chungking and Hongkong telegram
FB460 No.93 to you of July 14th and July 10th:
Effect on China of new British devisen control.
I realise that the enormous scale of our purchases in the United States makes it imperative for us to conserve, so far as possible, our dollar resources but if Rogers is correct in assuming that the result of our action will be seriously to reduce China's powers of resistance, I think that political implications.require careful consideration.
2. Our acquiescence in Japan's demands for the closure of the Burma road, however justifiable it may have been, has been a severe blow to China and has seriously damaged our position and prestige here. If we now follow this up by taking action which will have the effect of undermining China' S economic position we shall not only be playing straight into the hands of Japan but shall also incur increased odium here, with consequences that cannot be foreseen. If the United States are willing to come to the rescue, position will be eased but we shall still give the unfortunate impression of being ready to leave China in the lurch whenever it suits us to do so.
3. If it is technically possible to make any concession to China's needs I would most strongly urge that we should do so not only on moral grounds but also in our own selfish interests. China's friendship and her continued resistance to Japan is surely-of some value to us.
Repeated to Chungking, and Hongkong for Rogers both saving. 万
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