893.113/1428

The Consul General at Hong Kong (Jenkins) to the Secretary of State

No. 568

Sir: I have the honor to refer to this Consulate General’s despatches of May 6,25 May 11, and May 24, 1932, concerning the aircraft situation in this colony and South China, and to enclose herewith a letter dated December 15 from the American Trade Commissioner in Hong Kong25 from which it will be observed that American aircraft manufacturers are still experiencing great difficulty in their efforts to compete with British-made planes in the South China market, especially military planes. A memorandum of Vice Consul Lyon’s conversation with an official of the Colonial Secretary’s office is also enclosed25 respecting the attitude of the British Government in regard to the exportation of military aircraft to China.

This Consulate General has never been able to obtain a satisfactory explanation of the British Government’s attitude in this matter. However it seems safe to say that the British authorities are permitting the exportation of military planes to Hong Kong for ultimate transshipment to the military authorities in South China provided the planes are unarmed. No objections seem to be raised to the exportation of these unarmed military planes even when they are not covered by the so-called Nanking huchaos. In addition, it seems safe to say that after the so-called unarmed military planes are landed in Hong Kong, the Colonial authorities permit shipment to South China, either armed or unarmed, on the huchao of the South China authorities. It is not quite clear just what these so-called South China huchaos are. From Vice Consul Lyon’s conversation with Mr. Tratman one gets the impression that South China huchaos bear the chop of the Nanking [Page 592] Government but are actually issued by the South China authorities. On the other hand the South China military officials have stated repeatedly that they are very much opposed to applying to Nanking for these huchaos and that the local Hong Kong authorities will permit the shipment of military planes on the South China huchao alone.

I understand that the Cantonese authorities are shortly to make large purchases of planes and that they are anxious to obtain American aircraft if possible. At the same time however the Cantonese are not inclined to make these purchases through the Nanking Government and all of this business will probably go to British manufacturers if the United States Government continues to regard unarmed planes of the military type as military planes and forbid their exportation except under cover of a Nanking huchao. The Canton military authorities say quite frankly that they will not ask for these Nanking huchaos and will buy British aircraft instead, which can be shipped through Hong Kong on South China huchaos.

In view of the possibilities of the market for military aircraft in South China I hope it will be possible for the Department to ascertain the present position of the British Government in respect to the exportation of military aircraft in order that the practices of the two governments may be brought more into accord and an opportunity given to American manufacturers to compete with British aircraft on more favorable terms.

May I suggest that this matter be given the earliest possible consideration by the Department in order that the uncertainty of the situation may be cleared up as speedily as possible?

Respectfully yours,

Douglas Jenkins
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