Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 1

446G.119/2–2252

No. 10
The Secretary of State to the British Secretary of State for Foreign Affairs (Eden)

secret

Washington, March 14, 1952.

Dear Anthony: In response to your letter of February 22, 1952,¹ regarding United States export controls as they affect Hong Kong, I am enclosing a statement of current United States policy² which summarizes a decision agreed to by the agencies of this Government concerned with the problem.

There have been very extensive consultations within this Government about this problem, dating back to mid-December 1950, when the United States took sweeping measures affecting exports, calls by American merchant vessels and aircraft, and transactions involving American assets, all designed to prevent the Chinese Communists and North Koreans from receiving benefits from this country while they continue to engage in aggressive actions against the Free World.

We have arrived at the procedures outlined in the attached paper to permit a reasonable flow of United States materials to Hong Kong while insuring, so far as feasible, that there is no frustration of United States controls directed against Communist China because of the special situation and trade patterns of Hong Kong. We are all aware of Hong Kong’s substantial efforts to deny strategic materials to the Communist Chinese. We are also aware, however, that considerable amounts of materials of a type which are denied export to Communist China under United States policy do reach the Chinese mainland through Hong Kong.

I am hopeful that the new procedures will be found helpful to Hong Kong manufacturing and trade interests, and that they will make possible some alleviation of the materials problems of the Colony.

I know that you will be pleased to learn that under this new procedure certain allocations of raw cotton will be made at once for Hong Kong.

Sincerely yours,

Dean Acheson

1. Eden’s letter explained that U.S. restrictions on trade with Hong Kong had had a very serious effect on the colony’s trade and industry and had resulted in considerable unemployment. He expressed the hope that the United States would relax its restrictions and, in particular, allow the colony to import raw materials such as cotton. (446G.119/2–2252)
2. The enclosure, not printed, included a summary of NSC 122/1 (Document 6) and a statement by U.S. licensing authorities that the United States expected to license those items which Hong Kong embargoed to Communist China for the fulfillment of legitimate requirements in Hong Kong to the extent that the supply situation permitted but that with respect to items on the U.S. security lists not embargoed by Hong Kong, it would be necessary for the Hong Kong authorities to apply an embargo or to explain adequately why this could not be done. It also suggested that the Hong Kong authorities might consider establishing controls on certain specific items which had been reported moving from Hong Kong to China and that they might deny transit rights to cargoes comprising items on Hong Kong’s prohibited export list.