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Colony. The talks demonstrated that the Chinese were
prepared to negotiate on practical problems where the
interests of their nationals were involved.
It also
demonstrated that tactically it was unwise to concede
Chinese demands, too quickly. After we had done this, the
Chinese deliberately delayed proceedings and put forward.
sizeable claims for compensation using our desire to
terminate the negotiations as a means of pressure.
Chinese Aims and Tactics
8. The Chinese Government gave financial and propaganda
support to the confrontation but showed no inclination to
intervene directly, nor to seek to create such conditions
of chaos as would have impaired the Colony's usefulness as
an earner of foreign exchange. The maximum Chinese aim
appears to be the creation of a Macao-type situation in
which local Chinese Communist representatives dictate
important political decisions while we retain nominal
sovereignty and control and enable China to continue to reap
the present substantial economic benefits. After the
campaign of violence had been called off. the Chinese must
have encountered considerable difficulties in explaining to,
their supporters why they had switched to a policy of
long-term "struggle". This may be the explanation of the
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