HC Deb 07 May 1951 vol 487 cc1589-600
The President of the Board of Trade (Sir Hartley Shawcross)

Arising out of the Questions which were asked in the House on Wednesday and Thursday of last week about the export of goods of strategic value to China, I desire, with permission, to make a fairly full statement about the policy of His Majesty's Government and practice in this matter which I recognise to be of the greatest importance.

The total exports from the United Kingdom to China of goods of all types during 1950 and during the first quarter of 1951 were £3.6 million and £1.3 million respectively. During the first quarter of 1951 the value of goods imported from China into the U.K. totalled £2.7 million. Since the start of fighting in Korea last June careful watch has been kept on our trade with China and various restrictions have been imposed to ensure that she should not receive from the United Kingdom goods which would be of value to her in connection with her military operations in Korea.

All goods of direct military importance and many other goods which might directly assist her military operations are totally prohibited. This prohibition of exports already covers all military equipment, aircraft of all types, specialised motor vehicles, copper, zinc and their alloys and a wide range of industrial goods, including all machine tools. Supplies of many other goods are restricted to what we regard as normal quantities for civilian use in China.

This control is exercised in part by statutory orders and in other cases through the co-operation of the trade associations concerned. Certain goods, although not necessarily of strategic importance, are not exported to China because all supplies are needed to meet our own requirements and those of friendly nations.

We have not imposed a total embargo on trade with China as the U.S.A. have done. It has not so far been the policy of the United Nations to impose economic sanctions against China, and we have not ourselves prohibited all trade. We are, however, naturally in close consultation with other friendly powers and our present practice is certainly not less restrictive than that of other friendly countries except the U.S.A.

In a written answer to a Question by the hon. Member for Northfield (Mr. Blackburn), on Monday, 30th April, I gave figures of the total United Kingdom exports to China showing the amounts under the main categories. These categories are ones used in the Trade and Navigation Accounts and as hon. Members would see from examination of the export list, each of these categories covers a wide range of goods.

As there have been a number of references to those figures and a certain amount of misapprehension as to their significance, I should like briefly to comment on the main items contained in the total trade and to say that these small exports of goods—which include no arms, explosives, or other items of direct war value—have to the best of our knowledge been absorbed in the Chinese civilian economy and indeed fall far short of her normal civilian needs, aggravated as these have been by years of internal warfare. It is nonsense to suppose that they have been a factor of any significance in the Korean campaign.

Under the heading IRON AND STEEL AND MANUFACTURES THEREOF our total exports to China in the first three months of 1951 amounted to £230,000. This included the following main items:

£ Tons
Tubes, pipes and fittings 95,000 1,170
Tinplate 53,000 628
Wire cable and rope 34,000 293
Bars and rods 20,000 494
The tubes, pipes and fittings were largely for use in connection with repair and maintenance of the Shanghai Power Station and we regarded this export as unobjectionable. The tinplate is exported exclusively for use in packing liquid eggs for import into the United Kingdom.


£ Tons
Lead sheet 53,500 338
Copper wire 2,200 10
Copper tubes and strip 1,600
ELECTRICAL GOODS AND APPARATUS totalled £163,000, and the principal items were:
Insulated cables and wires 64,000
Electro-medical apparatus 30,000
Insulating materials 14,000
House service meters 12,000
X-ray apparatus 11,000
Radio and telecommunications apparatus including valves 9,000
MACHINERY to the total value of £225,000 consisted chiefly of:
Textile machinery 51,000
Boilers and boilerhouse plant 91,000
Mechanical handling equipment 14,000
Pumps 13,000
Electrical generators without prime Movers 12,000
Portable Dower tools 12,000
The boilerhouse plant, like the boiler tubes, were required for the Shanghai Power Station.

CHEMICALS, DRUGS, DYES AND COLOURS to the total value of £105,000 consisted mainly of:

Coal tar dyes 28,000
Iodides 12,000
Sodium compounds 10,000
Acids (sulphuric acid nil) 10,000
Other chemicals 21,000
Paints and colours 10,000
Penicillin 4,000
Other medicines and drugs 8,000
VEHICLES, a category which in our Trade Returns, includes locomotives, ships and aircraft, on which there has been most comment, totalled £71,090, made us as follows:
Cycles 38,000
Pneumatic rubber tyres and tubes 32,000
Axles, tyres and wheels for railway vehicles 1,000
Apart from two motor cars no motor vehicles, ships or aircraft were exported to China during the whole of 1950, or during the first quarter of 1951.

It is not the case that the United Kingdom has been increasing its exports to Hong Kong in order that they might be re-exported to China from that Colony. United Kingdom total exports to Hong Kong in the first quarter of 1951 were in fact less than in the previous quarter and less than they were in the first quarter of last year.

Trading between Hong Kong and China is a matter falling within the Department of my right hon. Friend the Secretary of State for the Colonies, but it might be convenient for me to indicate here the general position. Despite Hong Kong's special position, her economic dependence on her entrepôt trade with China and the high proportion of her population who are Chinese, the Hong Kong Government have taken measures to prevent supplies of goods of military importance going to China and to limit the flow of other goods which might be of value to the Chinese forces fighting in Korea. Determined efforts are also made to suppress smuggling although I would not wish anyone to underestimate the difficulties of doing so.

Exports from Hong Kong to China are subject to a similar pattern of legal and administrative controls to those operating in regard to direct exports to China from the United Kingdom. In regard to exports not subject to absolute prohibitions, however, the exports of certain items, notably rubber, have shown in recent months increases which have already led to action to strengthen the restrictions and controls on trade with China and make them more stringent, further action being under consideration.

The total exports from Hong Kong to China in the first quarter of this year amounted to approximately £43 million as compared with approximately £91 million in the previous year. They included no petroleum products or other items of direct strategic importance such as aircraft or munitions.

The amount of rubber exports from the Federation of Malaya and Singapore which included exports through Hong Kong to China was given by the Under-Secretary of State for the Colonies, in reply to a Question by the hon. Member for Wokingham (Mr. Remnant, on 12th April). Earlier in April His Majesty's Government in the United Kingdom and the Governments of the Federation of Malaya and Singapore announced their intention to control exports of rubber as from 9th April to the estimated civilian requirements, about 2,500 tons per month to China.

There have been exchanges of view between His Majesty's Government and the Government of the United States, and in view of the failure so far of the Good Offices Committee of the United Nations to secure a settlement in Korea, the question of further action in regard to exports to China is under consideration both in the Additional Measures Committee of the United Nations and between the Governments concerned, particularly His Majesty's Government and the Colonial Governments.

Moreover, since the 30th March, in addition to the control on crude rubber, export controls have been imposed on all tyres with a cross section of seven inches or more, including tyres for load-carrying vehicles, or heavy passenger cars, and since that date no tyres have been licensed for export to China. Licensing control has also been imposed, or is in course of being imposed, on bars, rods, sections, wire and cable of alloy steel and on other types of iron and steel and on insulated copper wire.

Mr. Churchill

We are indebted to the President of the Board of Trade for the full and elaborate statement which he has made to us upon this question which is, as His Majesty's Government are no doubt aware, a topic of controversial discussion in the United States and elsewhere. Is it not—to adopt the interrogatory form—rather a pity that when this burning question was raised and indeed broke out among us, as to what was going on in the world last week, and various questions were asked, the Prime Minister and the Minister of Defence and those who advise them had not got a more clear idea of what was going on; and might not some trouble and misunderstanding have been avoided if this business, which ought to have been vigilantly watched by the Government, could have been laid plainly and clearly before the House when it was first raised? We cannot ourselves attempt to pronounce upon this statement until we have looked into it, but should we find it necessary to ask the Leader of the House to arrange for a change of business for part of Thursday, that will be put forward by us through the usual channels.

Sir H. Shawcross

I can assure the right hon. Gentleman that the matter has been the subject of vigilant consideration by His Majesty's Government. I do not think that a direct question was put to my right hon. Friend the Minister of Defence, but I will at once concede that for my own part it would have been better if the detailed return that I gave had been broken down into further categories. Hon. Member would not then have been misled into thinking that any ships or aircraft or vehicles had been exported, although the sum of £71,000 involved might have led them to the conclusion that the amount of ships or aircraft involved could not have been very great.

Mr. Paget

Would the President of the Board of Trade agree that the policy of an embargo or blockade on Hong Kong would be just about as likely to bring about the invasion of that territory as General MacArthur's other policy in respect of the Yalu River brought about invasion there; and would he, therefore, see that a general arrangement as to the defence of Hong Kong on an effective basis was agreed with the Americans before any such policy was adopted.

Mr. Walter Fletcher

Would the President of the Board of Trade answer, firstly, the question as to what steps His Majesty's Government are taking to see that alternative sources of supply such as Indonesia, Ceylon and India, who have openly expressed their unwillingness to co-operate, shall be brought into line; and, secondly, what steps have been taken to see that the exports from Japan of very considerable quantities of material, including metal and metal manufactured goods, is stopped; and, thirdly, would he consider possibly sending immediately a Parliamentary mission to inquire into these matters on the spot in view of the growing disquiet that does exist in spite of his reply?

Sir H. Shawcross

I cannot, of course, answer for the action of other countries in exporting strategic materials to Hong Kong, but these will no doubt be matters which will be under consideration by the United Nations in the discussions that are taking place, or are about to take place, before the Additional Measures Committee. I think I used the expression "exports to Hong Kong" in my last answer. I meant, of course, exports from foreign countries to China.

Nor can I answer in regard to the position of exports from Japan to China, although I understand it is a fact that some goods were exported from Japan to China in exchange for essential goods such as coal, exported from China to Japan. As concerns the last part of the question, I would have thought that the general circumstances were sufficiently known to make it unnecessary to have a special Parliamentary mission to inquire into them on the spot.

Mr. Mikardo

If strategic materials are going to China from the United States colony in Japan, what are the grounds for American complaints against us?

Mr. R. A. Butler

Is the right hon. and learned Gentleman aware that in the answer to which he referred in relation to the Under-Secretary of State for the Colonies on the subject of Malayan exports of rubber, the figure given for the first quarter of 1951 is 46,500 tons, and that the figure for the whole of the preceding year is 77,624 tons. Does that not show a very remarkable increase for that first quarter?

Sir H. Shawcross

I entirely agree with the right hon. Gentleman that the increase was significant and it was for that reason that we decided to impose a control which has cut down the exports of rubber to China through Hong Kong, or otherwise, to a figure which is considered to be much below her civilian requirements, namely, 2,500 tons a month.

Mr. Churchill

Is there any means of making sure that this import of 2,500 tons a month is in fact used for civilian consumption—[HON. MEMBERS: "Oh."]—and has not been commandeered by the military authorities, as would happen in time of war in a great many countries? Is the right hon. and learned Gentleman quite sure of that, because it appears to be on a small scale as it is now cut down, and it seems a pity to have misunderstandings on that point?

Sir H. Shawcross

It is quite difficult to ensure that rubber is not misused when it gets to China. We are doing our best to keep a watch on the purposes for which it is required and we shall consider whether other measures are necessary. Nor can we prevent China obtaining supplies in quantity of rubber from other countries.

Mr. Frederick Elwyn Jones

What was the nature of the goods that China has exported to the United Kingdom and Hong Kong in the last 12 months? Is my right hon. and learned Friend aware that on this side of the House we fully support His Majesty's Government in opposing an economic blockade of China?

Sir H. Shawcross

The imports of goods from China into this country during the first quarter of this year were very varied in their nature, the main item consisting of liquid eggs in tins. The total amounted to £2,700,000. There was four tons of tungsten. In addition, there were very considerable imports, largely of food supplies, into Hong Kong itself.

Mr. Blackburn

Is the President of the Board of Trade aware, in the first place, that so far as the comparatively minor matter was concerned of exports from the United Kingdom to China, I warned his office—[HON. MEMBERS: "Oh."]—specifically about the importance of it on the Saturday before he answered the Question. He has admitted today that he answered it misleadingly. In so far as anything misleading has come out, it is his responsibility and not anybody else's. In the second place, does not the Minister appreciate that the figures which he has given to this House, and which I venture to say have not yet been assimilated, show that no less than £100 million of exports have gone to China since the start of this war in Korea, and that we have supplied, on his own figures, about 10 times as much rubber to the Chinese as is their normal civilian requirement, month after month? Is it not high time that His Majesty's Government woke up and gave up making vast profits out of people against whom our boys have been fighting?

Sir H. Shawcross

I am afraid that I am quite unable to accept either the figures or the conclusion put forward by the hon. Gentleman. The reference which I made in my original statement to the nature of these exports is true, that they have in fact made no significant contribution to the Chinese war potential against our forces in Korea. The only exception that it occurs to me to make at the moment in regard to that, is the increase in rubber exports at the beginning of this year, which we have already taken steps to control.

Mr. Chetwynd

In view of the current misunderstanding and misstatement in the United States of our export policy towards China, can my right hon. and learned Friend see that our information services over there give the fullest publicity to his statement?

Sir H. Shawcross

I certainly hope that that will be done.

Sir Ralph Glyn

May I ask the Secretary of State for the Colonies whether, in order to straighten out opinion expressed in the United States and elsewhere, he can inform the House what has been the policy of the Governor in Hong Kong in providing employment for the large number of refugees who have gone into the Colony, and the importance of importing into the Colony raw materials on which they can work?

The Secretary of State for the Colonies (Mr. James Griffiths)

As I believe I have informed the House on more than one occasion, there has been a very substantial increase in the population in Hong Kong in recent years. We have afforded asylum in Hong Kong to all the refugees who have come there, and this has created an enormous problem. We thought that it was the right thing to do. It will be realised that Hong Kong is very largely dependent upon supplies coming from China.

Earl Winterton

In view of the very genuine feeling over this question in the United States—whether it is right or wrong—in quarters by no means hostile to this country—feeling which is in many respects the most dangerous there has been since the Anglo-American Alliance—will the right hon. and learned Gentleman, through the Foreign Secretary, instruct His Majesty's Ambassador in the United States to give the fullest publicity to his statement, and not merely through the information services, so that the Americans may have an opportunity of judging the rights or wrongs of the matter? Is the right hon. and learned Gentleman also aware that on this side of the House we do not feel—unlike many hon. Members on that side—that this is a laughing matter?

Sir H. Shawcross

I am glad to give the noble Lord that assurance. I said at the commencement of my statement that we regarded it as an important matter. We hope that the United States will now be better informed of the true position.

Mr. James Hudson

Was not my right hon. and learned Friend perhaps a little generous to the Opposition when he suggested that they were excused by the fact that he had not broken down the original figure, especially when he sees now that, after the most explicit denial by the Prime Minister and others, the Opposition continue to make this impression of a very large trade with China, and carry it on for the purpose of encouraging the Americans to make similar wrong conclusions?

Mr. Spenee

Can the right hon. and learned Gentleman give a little more information about the £43 million of our exports from Hong Kong to China in the first quarter? Can he say whether that figure is of total exports, or whether it is only the British total, of goods from Hong Kong to China.

Sir H. Shawcross

It represents the total exports of trade from Hong Kong into China.

Sir Herbert Williams

What does it consist of?

Mr. Driberg

In view of one supplementary question today and several the other day, would my right hon. Friend agree that the best way of saving the lives of British and American soldiers is to prevent any major extension of the war in the Far East, and that a general embargo on trade with the Chinese is not the best way of trying to persuade them to open negotiations?

Mr. Peter Thorneycroft

The right hon. and learned Gentleman said that he had in mind that we should export 2,500 tons a month of rubber, making a total of 30,000 tons a year. In view of the fact that we have already, in the first quarter, exported 46,000 tons, or more than half as much again as the total figure for the full year, would he not think it rather unreasonable to go on at that rate, which would mean that the yearly figure would be 70,000 tons, or more than twice the amount he thinks is appropriate?

Sir H. Shawcross

I have said that we were looking at the whole of this question very carefully, and we are continuing to look at it.

Mr. Churchill

Having regard to the immense importation of rubber in the last year into China, would it not be better to stop it altogether now, completely, and thus reach a satisfactory solution with our great Ally?

Sir H. Shawcross

The right hon. Gentleman will appreciate that this question and all other questions relating to exports to China is now receiving or about to receive the fullest consideration not only in the Additional Measures Committee of the United Nations, where concerted action must be agreed to, but also in discussions between His Majesty's Government and the colonial Governments involved.

Mr. Emrys Hughes

If Hong Kong does not import rice, fresh meat, vegetables, food, oils and eggs from China what is likely to be the food position in Hong Kong if that trade disappears?

Sir H. Shawcross

We cannot, of course, disregard the geographical situation of Hong Kong, or the fact that it depends in the main for food supplies, and entirely for water supplies, on the mainland of China.

Sir H. Williams

For exports from Hong Kong into China the right hon. and learned Gentleman has given a figure of £44 million in three months. As that is more or less the figure given by General MacArthur during the United States Congressional investigation, ought there not to be a real examination of what the £44 million consists of?

Sir H. Shawcross

The whole returns for the first quarter have not yet been broken down, but we are breaking them down——

Mr. Churchill

"Analysing" is the better word.

Sir H. Shawcross

I am obliged to the right hon. Gentleman, who is a great authority on these matters. We are analysing the various details which we have for the first two months in connection with the strengthening of the system of controls and increasing their stringency in particular cases.

Mr. Scholefield Allen

Will His Majesty's Government go very carefully on this question of sanctions against China, particularly having regard to the fact that it was a Conservative Prime Minister who described sanctions as "mid-summer madness"?

Mr. Pickthorn

In view of the right hon. Gentleman's expression about China's military operations, are we to assume that China is at war with the United Nations and the United Nations with China, but that the separate nations have not yet got to the point of economic sanctions? If so, is it not more difficult than ever to understand international law?

Sir H. Shawcross

That is a question which might perhaps be more appropriately put to the Attorney-General.

Mrs. Jean Mann

Can my right hon. and learned Friend give us some idea of the quantity and value of the exports which our great Ally is allowing to seep through via Japan?

Mr. Thomas Reid

Will my right hon. and learned Friend ask the United Nations to see that in the case of rubber and other things not merely this country but countries like Indonesia play the game?

Air Commodore Harvey

Is the right hon. and learned Gentleman aware that considerable quantities of raw materials and equipment reach China from Hong Kong via the Portuguese colony of Macao, which is side-tracking all the rules and regulations? Does the statement made by him apply to exports to Macao, to prevent them going on to China?

Sir H. Shawcross

I am not certain what the hon. and gallant Gentleman has in mind. If he is referring to goods which are discharged on a through bill of lading and not really imported into Hong Kong at all, it may be so, but we have no control over that. I am not in possession of the figures. There is a certain amount of trans-shipping from larger ships into sampans and smaller ships in the port of Hong Kong, and that is not a matter which goes into the export trade of Hong Kong.

Air Commodore Harvey

If I may make it clear, is the right hon. and learned Gentleman aware that merchants in Macao buy goods which are prohibited from being exported from Hong Kong to China, ship them to Macao and then send them over the border into China? Will he look into that?

Sir H. Shawcross indicated assent.

Several Hon. Members rose——

Mr. Speaker

We cannot debate this further by question and answer. We had better wait to see if we are to have a debate about it on Thursday.