The four-day stoppage of supplies from China at the end of June was scooptod by the public with ginirable calm. Food prices inevitably rose, but not excessivaly, and
subsequently quickly returned to normal. The experience
has shown that the local Comunist can prevail on Chinese
suppliers to stop supplies for at least a limited period;
their ts to disrupt internal distribution channels
were, howevor, much less offcctive. Reports were receivod
thet a longer støpreco war being organised to begin on
17th July but this has not materialised, According to one
source e reason was that one of the largest Chinese
importers rofused to take part without direct orderz
Feking.
The main conclusion which the long Tong Government
has drawn from the stoppages is the need to reduce
Let dominance over the supply and distribution of
food by encouraging the development or alternativ
souress of supply. These are being exominoi urgently
by the long Tone Govermont. As soon as the beat
alterativo souresa have been determined, consideration
will be given to the desizability of imposing import
quotas on supplies of certain essential foodstuffs from
Chine on linos which already œziet in the case of rice.
Thero aro dangero in this course of action which will
require most careful examination when the necessary facts
Lave been obtained. apart from the resetion of the Chinese
Govornuent to such a curtailment of ita export market,
prios of food obtained from alternative sources vill
fäevitabiljeboohighërlikéngat present and the consequential
risc in the coat of living could have nost serious affoets
on the secondo position of the Telony.
3. The long kong Government also has under review the
desirability of introducing amorgandy measures to moot any
future attempt by the Chinese to cut off supplies. Those
include the stimintion of local production, the stock
piling of essential foodstuffs and a rationing schoma.
*OP