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NOTE FOR SECRETARY OF STATE,
FOREIGN AND COMMONWEALTH OFFICE
HONG KONG
GENERAL
Land Policy
Population
Economy
The land area of Hong Kong is approximately 400 sq.miles. Hong Kong Island (29 sq. miles) was ceded to Britain as a trading station in 1841. The Kowloon Peninsula together with Stonecutters' Island, Green Island and Ap Lei Chau Island (3 sq. miles) were added in 1860 under the Convention of
Peking. In 1898 the New Territories, which consist of the
rural areas north of Kowloon and the other Islands, were
leased to Great Britain for 99 years.
2. All land is owned by the Crown. Government policy is to
sell leases to the highest bidder by public auction or by tender, except in the case of land required for public, charitable or non-profit making purposes when grants are made, usually on favourable terms, by private treaty.
3. The 1967 estimate of the total population is 3,877,700
about 98% of whom are Chinese. Population has increased from 1,600,000 in 1946 largely owing to immigration from mainland China. A high proportion of the population (up to 50% in some urban areas) are not British subjects.
4. Hong Kong is now firmly established as a light industrial economy based on exports. It nevertheless retains a very
considerable entrepot trade serving South East Asia and the Far East. It is the fifth largest port in the world.
5.
Domestic exports in 1967 totalled HK$6,700 million (£423m.) and re-exports totalled HK$2,081 million (£131m.). Imports were HK$10,449 million (£659m.).
6. 37% of all exports in 1967 went to the U.S.A. and 17% to the U.K. In the same year 22% of all imports came from China and 19% from Japan, 14% from the U.S.A. and % from
the U.K.
Public Finance 7.
HK$1885.5m. (£121.1m.)
Estimated Revenue 1967-68 Estimated Expenditure 1967-68 HK$1922m. (£123.4m.) To November 1967 One Hong Kong dollar = 1/3d.
(16 dollars = £1)
From November 1967 One Hong Kong dollar = 1/4a.
(14.54 dollars = £1)
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Lease of New Territories
BASIC PROBLEMS
8. Hong Kong is by far the largest (in terms of economic activity and population) of our remaining Dependent
Territories. It is a Crown Colony which suffers from the
major and fundamental handicap of being a minute enclave
on the Chinese mainland. The Hong Kong Government
therefore constantly has to bear in mind the susceptibilities
of its infinitely more powerful communist Chinese neighbour
while at the same time making it clear to the world at
large that it is master in its own house and has no intention
of being reduced to a communist cypher as has happened in
the case of its near neighbour Macao. It demonstrated
the latter point very clearly by its handling of the
communist inspired disturban ces which occurred in the Colony last year. One major factor that the communists apparently overlooked on that occasion was that approximately one third of Hong Kong's population of four million people consisted of refugees from Communist China who had
"voted with their feet" for the way of life that the Colony
could offer them. This vast influx of refugees, which began in 1950, has over the years presented the authorities in Hong Kong with enormous problems in meeting their needs for housing and social services generally. These needs have been met with great efficiency and the Hong Kong Government is now the landlord of approximately a quarter of the Colony's population. It is one of the most densely populated areas of the world. In specific urban areas
the density reaches a peak of five thousand persons per acre and the average density of the Colony is ten thousand persons per square mile.
9.
Another of Hong Kong's basic problems arises from the fact that the lease of the New Territories (which comprise 365 square miles out of the Colony's total area of 400 square miles) expires in 1997 and there is at the moment
no likelihood that it will be renewed. Without the
New Territories the Colony would not be a viable entity.
Hong Kong has little or no natural resources and its economy depends entirely on the skills of its people and
on the ability to trade. The latter is in turn dependent
/ upon
Constitution
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upon external confidence in the Colony's ability to maintain her position and pay her way. The fundamental questions accordingly arise of how long this confidence can be
maintained as the lease runs out; and what is to be the
ultimate future of the two million or more British subjects
who live there. These questions are being studied by officials and it is hoped to submit a report to Ministers
shortly.
10. Although Hong Kong possesses a highly sophisticated community and modern facilities of all kinds (which compare favourably with those anywhere in the world) plus a buoyant economy, for the reasons given in the following paragraph it has to conduct the business of Government with a Crown
Colony Constitution which provides for no elected element in either the Executive or Legislative Councils. The former has a nominated unofficial majority and the Governor is required to consult with it save where matters are unimportant or too urgent. He may act contrary to the advice of the Executive Council but in such cases must report fully to the
Secretary of State. The Governor legislates with the advice and consent of the Legislative Council which has twelve
official and thirteen nominated unofficial members. The
Governor as President has an original and a casting vote,
thus maintaining an official majority.
11.
There can be no constitutional progression towards self-government in Hong Kong since there have been frequent and plain indications that the Chinese Peoples Government expects the constitutional status quo to be maintained. Moreover, introduction of the electoral principle into the Legislative Council would inevitably import the politics of the "two Chinas" into the conduct of the Colony's affairs. The Chinese Peoples Government would not tolerate this and the outcome might well be a determined communist bid for control of the institutions of central Government which
could succeed in conditions of electoral apathy.
However,
the situation remains less difficult than it might be by reason of the fact that the general public in Hong Kong (with the exception of certain vociferous but minor sections)
are not