FO371-35824 — Page 48

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surely be generous enough to give consideration to legitimate British rights and economic interests in Hongkong in detailed arrangements in connection with the settlement of that terri- torial issue.

It is pretty hard for the Chinese to accept the view, as advanced by a Briton of outstanding authority, that it will not be possible to regard the future of Hongkong to be deter- mined merely by bargaining between the United Kingdom and China on the basis of old standing treaty rights; and that the future of Hongkong must depend on the general settlement to be made between China and members of the Pacifia group' as to th provisions of key points to be maintained for purposes of

This would security and for the continuance of transit trade. make the issue more complicated and involve further delay in its settlement What the Chinese expect of Great Britain in respect of Hongkong is a simple and immediate agreement to its retrocession to China. As regards matters of International concern in Kongkong such as security bases and trade facilities which might, as one could visualise, require a general settle- ment, that could be left to negotiation after the restoration of Chinese sovereignty over the island.

That

On the whole, there is nothing fundamentally irreconcilable between China and Great Britain either in regard to their national interests or in respect of their world outlook. is much needed for their common good la sufficient mutual undere #tanding as well as mutual respect between the two great allied nations in cooperation to promote the peace as well as to win the war,

(b)

Prof. Yuan Chen, member of the People's Political Council of the Chinese Government; professor and former dean of the College of Arts in Wuhan National University; and former professor in Peking National University, wrote on November 1, 1943, in the bullo- tin of the Foreign Policy Association, New York, as follows:

"The Chinese were greatly disappointed when they discovered that in the new treaty abolishing extraterritorial rights no mention was made of Kowloon, not to say Hongkong.

The case

for immediate abolition of the British leasehold of Kowloon is too obvious to be argued. In the case of Hongkong, Britain may insist on maintenance of its territorial sovereignty

But the as well as its economic and military interests. Chinese people cannot be expected to understand the intricate legal aspect of the problem; they only know that Hongkong belonged originally to China and that its population is still more than 95 per cent Chinese, Although the Chinese Govern- ment has never publicly expressed any view on this subject, It is Hongkong has remained a sore point with the people.

to be hoped that British statesmanship will see the wisdom of making a magnificent gesture by returning Hongkong and Kowloon to China, thus laying the foundation of a lasting friendship butween

two nations.

Lven

3. Discussion of the subject with Chinese has elicited the following Chinese arguments. The former validities affecting Sino-British relations are gone; such as trade and financial interests reposing on now abandoned "power" and extraterritorial system. Hongkong is a relic of a political era now past. from the British viewpoint it is an anomaly in terms both of British

The perpetuation of military and commercial strategy in China, its former functions will offend against the changed order in China. In the case of such offence, the Chinese will have means ready- Whilst indulging and even hand to circumvent those functions. appreciating its material advantages, the artificial divorcement of Hongkong from China's fortunes effected an unwholesome impair-

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