FO371-46259 — Page 147

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Communicated to m2 Ritzin

by m2 A.E. Marker. 14/12/45

luk

COPY.

SMUGGLING FROM HONGKONG

1015

The actual island of Hongkong was ceded to Britain in 1842, and in 1360 the tip of the Kowloon peninsula was also ced 1945

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Up to 1898, when the New Territories were leased to Britain (for 99 years) the Colony's land frontier with China the waist of the peninsula was only a very few miles (perhaps 2 or 3) long. Control of goods leaving the Colony by land was thus easily effected by the Chinese Customs. Similarily, two or three Customs stations at the near approaches to the harbour readily controlled the junk traffic and made smuggling almost impossible.

The lease of the New Territories to Britain in 1998 created, however, an entirely different situation. By the inclusing in the Colony of the vast Deep & Mirs Bays (the entire waters of which, up to high- water mark, became British), of several islands (notably Lantau) and the pushing back of the land frontier to Shatowkok and the humchun River (thewaters of which also became British) the Chinese Customs was forced to withdraw its junk-control stations far out to isolated islands, while the land frontier to be controlled increased from 2 or 3 miles to (I speak from memory) around 30 miles. As a consequence smuggling of dutiable goods into China and (this is important) of opium into the Colony became rampant. In fact by the early 1930's the Chinese Customs had been forced to employ a dozen or more preventive vessels, armed Customs guards totalling several hundred men, wirless stations etc. to watch the frontiers of the Colony. Clashes with armed smugglers ashore and afloat were almost a daily occurrence and an appreciable number of persons on both sides, including innocent bystanders were killed or wounded. Even then, smuggling from the Colony into China was only partially prevented.

Thus

It should be realised that smuggling junks could lie in complete immunity a few yards off-shore in Deep or Mirs Bay (the N. shore of the latter is within a few hundred yards of the smuggling and pirate haunts of Bias Bay) or the Shumchun River and land their smuggled goods when the Chinese Customs patrols had moved on. China's action, (even though it was probably forced on her) in granting the Colony room for its self-defence resulted in a vast loss to her Customs revenue, apart from involving her in huge expense for (partly unsuccessful) preventive measures.

For years the Chinese Customs endeavoured to persuade the Hongkong Government to permit the former's officers to collect duty in the Colony itself on goods leaving for China, as they already did at the Kowloon railway station (see below). Although, however, the Hongkong Government maintained only the most infrequent and most superficial contact with the Kwangtung Provincial Authorities, the latter's opposition to an such agreement (they were anti-Central Government and did not want any more revenue than necessary to reach

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