FOREIGN RELATIONS, 1934, VOLUME III



However, while they sympathise with the aims of the United States
Government in connection with the definition of military aircraft,
they do not consider that under existing conditions the application
of the stricter procedure in force in the United States is practical;
and they therefore propose to continue to regulate the export of air-
craft to China by their present export procedure under which a licence
is not required for unarmed aircraft. They are convinced that it will
be best for the present to concentrate on securing the agreement of
other governments to the application of a uniform procedure to what
is clearly war material.
  5. The Chinese Government have not in fact so far addressed to
His Majesty's Government any representations with regard to the
export of unarmed aircraft; but if, at any time, representations in
this sense should be made, His Majesty's Government will be prepared
to reconsider the matter, provided that it is clear that a general inter-
national agreement for the further restriction of such exports could
be obtained under conditions which could not be abused.
  6. When on Page 5 of your note you mentioned that American
exporters to China were placed at disadvantage in comparison with
exporters of other nationalities, you stated that the Hong Kong au-
thorities had appeared willing to permit shipments to China on the
basis of import permits issued by local Chinese authorities. In order
to remove any misunderstanding which may exist on this particular
point, I have been instructed to explain that the Government of
Hong Kong have, from the time that the regulations regarding the
importation of arms were promulgated by the Chinese Government,
most scrupulously discharged their responsibility so far as con-
cerns arms imported into Hong Kong as stock, and subsequently sold
to customers in China, i. e. in every case the firms concerned have been,
and will be required to produce an authorisation from the Central
Government of China. It is only in the case of arms ordered in China
from some territory beyond Hong Kong, whether British or foreign,
and passing through Hong Kong in transit from that territory to the
customer in China, that the Government of Hong Kong have not con-
cerned themselves with the authorisation of the Central Government
of China. The reasons for this attitude lie in the Barcelona Con-
vention on Freedom of Transit.
  7. With reference to the last paragraph of your note, I have the
honour to inform you that His Majesty's Government have not yet
completed their consideration of the subject of the export of arms to
China, and that they will not fail to inform the United States Gov-
ernment of the conclusions which are finally reached in the matter.
In the meanwhile they are continuing to apply the procedure described
in Mr. Osborne's note No. 265 of the 4th August.
  I have [etc.]                                    R. C. LINDSAT



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