HL Deb 06 December 1955 vol 194 cc1091-4

2.35 p.m.


My Lords, I beg to ask the first Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government whether they are aware that (1) in his last annual report to the shareholders the chairman of the Hong Kong and Shanghai Banking Corporation said that the potentialities of British trade with China are as great as they have been for over a hundred years"; (2) that Sweden and Switzerland are executing contracts for China for turbine and steam turbo-generator sets, with boiler plant and electrical switch gear, and that French and Japanese and West German concerns have contracted to supply China with various kinds of iron and steel products, of which West Germany exported to China last year some 7,500 tons, and French concerns more recently some 10,000 tons, all of which items are on the China embargo list; and whether Her Majesty's Government will take steps to enable British businessmen to compete freely on an equal footing with Swedish, Swiss, French, Japanese and West German concerns who are trading with China in the aforementioned embargoed items.]


My Lords, Her Majesty's Government are aware of the statement to which the noble Viscount, Lord Elibank, refers in the first part of his Question. The chairman of the Hong Kong and Shanghai Banking Corporation went on to say, however, that China would need to expand her exports if she was to obtain the foreign exchange necessary to purchase the industrial goods she requires. As to the second part of the Question, neither Sweden nor Switzerland is a member of the Consultative Group in Paris, but Her Majesty's Government do not consider that the nature and volume of exports from these countries to China are such as to prejudice the effectiveness of the controls maintained by members of the Group.

The other three countries mentioned by the noble Viscount are members of the Consultative Group. The exports by Western Germany were made in fulfilment of commitments assumed before the Consultative Group had agreed upon a common list of controls. As for the contracts entered into by the French and the Japanese, I would refer the noble Viscount to the answer I gave him on October 26 when I told him that, although the arrangements made in the Consultative Group had achieved a remarkable uniformity, the controls were sufficiently flexible to take account of special circumstances and that occasionally, with the full knowledge of all the members, items under embargo had been exported to China by member countries, including the United Kingdom. As to the last part of the Question, I can assure the noble Viscount that British businessmen desiring to trade with China are on the same footing as those of France, Japan and Western Germany. I have already explained that Sweden and Switzerland are not members of the Consultative Group.


My Lords, I beg to thank the noble Lord for his very comprehensive Answer. May I ask him whether he is aware that it is common knowledge (this is to a large extent substantiated in my Question) and well known in business circles in all the major trading countries, that there is a growing absence of uniformity in the application of the China strategic controls by the Consultative Committee sitting in Paris? And if that is so—and I venture to think it is—is it not clear that, if the present circumstances are continued, British traders will be at an increasing disadvantage in the China market compared with some of their most important foreign competitors?


If the disparity should grow to the proportions to which the noble Viscount fears, that might be so. But my information is—and I told him this a little while ago—that a quite remarkable degree of uniformity has in fact been achieved.


Yes, but it is not the uniformity that is really necessary. If I may say so, with the indulgence of the House—


My Lords, I am sorry to intervene, but the noble Viscount well knows that he must not now make a speech, although he may, of course, ask a supplementary question.

2.39 p.m.


My Lords, I beg to ask the second Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government whether they will say whether any conversations have taken place in recent times between the nations represented on "Cocom" having in view the rescinding of the 1951 U.N.O. resolution which imposed the China embargo solely in relation to the Korean war.]


My Lords, no such conversations have taken place recently. However, the scope of the security controls on trade with China continues to be kept under review.


My Lords, I beg to thank the noble Marquess for his reply. May I ask him if he is able to inform the House whether Her Majesty's Government will initiate steps to bring this embargo to an end? Further, is he aware that so long as the embargo continues, China is driven more and more for the capital goods necessary to bring into being her industrialisation plans, to the Soviet bloc, to the disadvantage of British traders?


My Lords, I am aware that what the noble Viscount has said in the latter part of his interrogative remarks is an argument which is frequently used; and it is, of course, one which we have in mind. For the rest, I think it is necessary, when discussing this matter, to bear in mind that the resolution of the United Nations was not confined to the end of hostilities in Korea. What the last paragraph of the resolution said was that it reaffirms that it continues to be the policy of the United Nations to bring about a cessation of hostilities in Korea and the achievement of United Nations' objectives in Korea by peaceful means. Though the first of those objectives has been achieved, the second, unfortunately, has not. That is one reason, and perhaps the main reason, why this does not seem to Her Majesty's Government to be a timely moment to take further steps in the matter.

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