SECRET
Hong Kong telegram No.1771 to Commonwealth Office.
.5mm
There is little doubt that the partial revaluation of the Hong Kong dollar caught the local Communist propaganda machine off-balance at a time when it was in the middle of mounting a major offensive against Government for devaluation. There is some scope for attacks on Government as some rise in the cost of living, albeit on a smaller scale, is inevitable but the absence of any official CPG announcement concerning a revised rate of exchange has not helped the Communists. The absence of comment, so far, in the Communist Press on the exchange of the 2 police constables for the 5 prisoners from C.T. and the opening of Man Kam To bridge is somewhat strange. It is possible, of course, that a major propaganda campaign, which will interpret the events as a defeat for the Hong Kong authorities may be launched immediately the initial agreement affecting the exchange has been complied with;
on the other hand the Communists may be waiting to assess local reaction to the matter before committing themselves..
8. Whilst overt signs of confrontation in the form of bomb incidents and street demonstrations can be expected to continue in a relatively low key in the immediate future, the opening of the annual exhibition of Hong Kong products in early December could provide the pretext for another upsurge in violent activity. At present the Communists are consolidating their support, particularly in the labour and educational sphere, where political activities continue at a high level. Despite the attempts by some unions to limit the number of persons in receipt of strike pay, indicating perhaps that funds are becoming depleted, increased attendances at meetings and improvement in morale suggests that their 'consolidation and expansion campaign' is achieving some success, at least in these fields.
Foreign Office please pass routine Washington as my telegram No.397 and routine Canberra as my telegram No.150.
Sir D.Trench.
FILES
0.0.
FO
BRORA
H.K.D.
[Repeated as requested]
[Also sent to Cabinet Office].
Int & Gen Dept.
F.E. & P.D.
J.I.P.G.D.
J.I.R.D.
Sir A.Galsworthy's Office.
Mr. Hall
F.E.D.
O.L.A.
O.P.A.
Mr. de la Mare.
SECRET
ADVANCE COPIES SENT