SECRET
DANAO SAM JA SAATE
2.
Police action, in the larger operations assisted by military forces, has continued against Communist organisations, in the course of which union and school premises, Communist organisations, China product stores and homes of Communist cadres have been raided and quantities of weapons, inflammatory posters and documents of intelligence interest seized. Apart from one incident in the New Territories, no physical resistence has been encountered in any of these operations. The continued action has had the effect of severely disrupting the Communist leadership, which has now disappeared into hiding, and has seriously affected the morale of Communist supporters, many of whom see little point in continuing the struggle.
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Perhaps the most surprising aspect of the past week has been the lack of C.P.G. reaction to the offensive moves made by Government. Apart from championing the cause of the N.C.N.A. staff arrested by police and taking retaliatory measures against the Reuter's correspondent in Peking, the Chinese have given no indication of taking official cognizance of the developments here. This, in itself, has lowered morale of Communist supporters even further, as they feel they are being let down by China in their hour of need.
40 The disruption of rail services between Canton and Shum Chun seems to have been related solely to the chaotic conditions in Canton. Deliveries by road and sea of foodstuffs have been stepped up. Relaxation of C.C.A. control on the border area due to preoccupation in Canton could directly influence the situation for the worse.
5. Despite the lull in Communist activities on the ground, apart from the bomb attacks, there is no room for complacency in that there is no indication that the Communist leaders will discontinue the confrontation. At present however, the border is
the main area of tension, where the comparatively minor stone throwing could quickly flare up into a major incident between the Army and possibly the C.C.A.
(Passed as requested with advance copies to Foreign Office
(F.E. Dept.), Commonwealth Secretary's Private Office
and News Department)
SECRET
/Distribution