§ 11 Mr. CHORLTON
asked the Secretary of State for Foreign Affairs (1) whether he has drawn the attention of the Japanese Government to the serious consequences to legitimate trade of the extensive smuggling of Japanese goods into China from Dairen through the autonomous area of East Hopei in the demilitarized zone; and whether he will represent to the Japanese Ambassador that the continuance of this practice must lead to a demand for discrimination against Japanese goods in other parts of the world;
(2) whether his attention has been drawn to the fact that the action of the East Hopei autonomous Government in lowering the tariff on imports from Dairen has permitted the smuggling into the rest of China of large quantities of merchandise and that the new preventive methods adopted by the Tientsin Customs have been largely nullified in consequence; and what steps he is taking to secure that British loans secured on the Chinese Customs are riot placed in jeopardy by an extension of these practices;
(3) whether his attention has been drawn to the fact that the proper collection of the Chinese Customs revenue upon which British and other foreign loans are secured is being imperilled by the extensive smuggling of Japanese goods through the demilitarised zone and the Hopei-Chahar autonomous area; by how much the revenue of the Tientsin Customs was reduced in consequence in the month of March; and what steps he is taking to safeguard the security of the British loans affected?
§ Mr. EDEN
The serious growth of smuggling in North China has been engaging the attention of His Majesty's Government for some time past, and has already formed the subject of representations both to the Chinese and Japanese Governments. In view, however, of the recent deterioration in the position and of the reduction in duty levied on goods entering North China via the demilitarised zone, His Majesty's Government are at present actively considering what further steps can be taken to safe- 885 guard British trade in that area and to ensure that the security for the foreign loan services will not be endangered. Beyond what has appeared in the Press, I have no information regarding the loss to the Chinese Customs revenue occasioned by this development, but a full report on the situation is on its way from His Majesty's Embassy in China.