ABROGATION OF EXTRATERRITORIAL RIGHTS IN CHINA PROPOSED
AUSTRALIAN-CHINESE TREATY

1. At a meeting of Full Cabinet held on 6th December 1944,
approval was given for the discussion with the Chinese Minister
[1] of proposals for an agreement on the above subject.

2. Attached hereto as Annex 'A' [2] is the text of a treaty and
accompanying Exchange of Notes which it is now proposed should be
submitted for the acceptance of the Chinese Government.

3. It will be recalled that the abrogation of the regime of
extraterritoriality was urged on the representatives of the United
Kingdom and United States by the Australian Minister to China in
1942 [3] and that treaties effecting this were signed by those
governments with China in 1943.

4. In pursuance of the United Kingdom Treaty a United Kingdom
Order-in-Council was made on 22nd March, 1943, abolishing the
British machinery in China by which the privileges flowing from
extraterritoriality were made effective; this Order-in-Council
recited that the Commonwealth of Australia had requested and
consented to the making of the Order as regards those interests
with which it was concerned.

5. On 14th April, 1944, the Government of Canada signed a Treaty
and Exchange of Notes with China to the same effect, and since
that date the Chinese Government has repeatedly urged on the
Australian Government the conclusion of a similar Treaty.

6. The text now submitted for approval substantially follows the
Canadian Treaty, and an analysis of the text follows:-

Article I is confined to definitions.

Article II operates to confirm the abolition of the exercise of
Australian extraterritorial rights in China.

Article III is an undertaking on the part of the Australian
Government to do everything necessary to secure a rendition of the
extraterritorial concessions so far as Australia is concerned.

Article IV is designed to save the property rights in China held
by Australians, and follows the Canadian and United Kingdom
treaties.

Article V provides for the reciprocity of certain rights. It was
inserted in the United Kingdom and United States treaties to
secure equal treatment for their nationals in China, and has been
carefully drafted in the present text to make it clear that no
change in the present policy concerning immigration into Australia
from China is granted or contemplated. The words 'lawfully
resident' effect this.

Similarly, the reference to 'procedure for the imposition and
enforcement of taxes' saves the liberty of the Australian
Government to continue its taxation policy of discrimination
between residents and non-residents. This formula is acceptable to
the Commissioner of Taxation.

Article VI provides for the mutual appointment of consular
officers and for the furnishing to them of advice of the detention
or arrest of nationals of their country.

Chinese Consuls are now exercising their functions in Australia,
and as the appointment of Australian Consuls is contemplated, this
provision would be to the advantage of Australia.

Article VII is a mutual declaration that the parties contemplate,
after the cessation of hostilities, negotiating a comprehensive
treaty or treaties of friendship, commerce, navigation and
consular rights.

A similar article appears in the Canadian Treaty, and actually
engages the parties only to enter into negotiations. This is
strictly an illusory undertaking, but as the Chinese attach
importance to the inclusion of the subject matter in the treaty,
its omission might make it appear that Australia was not prepared
to enter into commercial relations and might be misunderstood in
China and affect our future trade relations adversely. The present
text is therefore proposed.

Article VIII provides for the application of the generally
accepted principles of international law and practice to questions
affecting the sovereignty of China which fall outside the matter
dealt with in the treaty.

Article IX provides for the ratification of the treaty, which in
the case of Australia is to be conditional on Parliamentary
approval.

7. In the present circumstances it is clear that the conclusion of
a treaty will be of substantial diplomatic value to Australia; the
exercise of Australian extraterritorial rights in China has in
fact ceased, and no departure from Australian policy respecting
the treatment of Chinese in Australia follows from the text
submitted. At the same time the Treaty is ardently desired by
China and will assist that country. It is therefore recommended
that this text be approved. [4]

H. V. EVATT