Your 378. [1] Supplies for Shanghai.

We are anxiously awaiting outcome of your attempts to obtain
agreement of Chinese Government and Communist authorities to
regular shipments of supplies into Shanghai.

As you are aware, we have taken the view that everything possible
should be done to maintain peaceful trade through Chinese ports,
particularly Shanghai. We still believe that this offers the only
practical means of maintaining normal contact with China and
establishing reasonable relationships of a business nature in the
future. Our Ambassador at Nanking has confirmed the desperate
plight in which British commercial interests in Shanghai are now
beginning to find themselves as a result of the Chinese
Government's closure of the port [2], and has urged the need for
immediate policy decision. We realise that little help can be
expected from the United States on this issue, and that attempts
to convoy vessels to Shanghai would be dangerous. At the same time
we consider that the Chinese Government in its present situation
should not be allowed indefinitely to maintain what is virtually a
blockade while refusing to acknowledge the existence of a state of
belligerency.