17 JUNE 1949, Page 2

Hongkong and Shanghai

Mr. Alexander has returned from Hongkong, where his short visit has served to remind both the colony and its neighbours that the British Government is not indifferent to our interests there. No direct threat to these is discernible in the near future, and mean- while the reinforcement programme is being carried out with reasonable expedition. Recent history has demonstrated that an aggressive and determined enemy with undisputed command of the sea and air can capture Hongkong without serious difficulty ; but that is no reason to assume that it is untenable against the Chinese. Our post-war achievements in Hongkong have been remarkable, and all China has benefited from them. To talk about Hongkong as though it was a piece of unlawful booty which we ought, and in any case will shortly be compelled, to give up is rubbish. Our right to be there is morally and legally unassailable ; and if it is assailed by any other means we must stand up for it. Further north, meanwhile, a putative minefield in the Yangste has closed the port of Shanghai to shipping, and is likely to delay the return to normal of the city's economy. Apart from this, the portents for foreign trade continue to be as hopeful as was to be expected. The regulations so far issued by the Communist authori- ties appear to be rather less restrictive than those which were in force under the Nationalists. No progress has yet been made towards the establishment of normal diplomatic relations between the new regime and the foreign Powers, and it is believed in some quarters that none may be possible until after the Communists have held a " People's Political Conference," at a date yet to be fixed. When an opportunity does come to end this protracted and unreal interlude of non-recognition, it is possible that Great Britain may be given some degree of priority over the United States, whose un- popularity in China grows no less. It is to be hoped that the British Government will not take advantage of this ; any short-term gains which it might bring would inevitably be offset by losses in the international sphere.