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Note by the Minister of State for Commonwealth Affairs
HONG KONG
The Committee has before it the interim report, prepared
by officials, on the prospects for withdrawal from Hong Kong
if it were suddenly forced upon us. They have recommended
that a team should be set up to prepare urgent contingency
plans (see paragraph 20 of the report).
2. But in considering the report the Committee may wish
to be aware of some of the possible circumstances which could
lead to such a withdrawal. These are as follows:
(a) The authorities in Hong Kong will restore order, but
there will be continued spasmodic troubles from the local communists (strikes, minor riots, guerilla activities), with China continuing to give only moral support. The danger here is that the internal situatio
in Hong Kong will snowball into a degree of disorder which could be controlled only by using troops. Because of Hong Kong's population density, it is likely that the position would be more difficult than
that in Aden. Such a deterioration would flow from the fact that Hong Kong's economy must grow 6 to 8 per cent annually in order to absorb the young people entering the labour market. There are already signs of a falling-off in investment and in the placing of orders for industry. A prolonged period of troubles could well accelerate this process, and
unemployment could follow. In such an economic
context, local communists would be likely to
increase their support and, consequently, their
activities,
(b) Order is restored in Hong Kong, and the local
communists are defeated, The communists in China
decide that they cannot accept the moral defeat of having failed to create a Macao situation, and
create confrontation along the border. The danger
here would be one of escalation.
(c) Order is restored in Hong Kong but the local
communists continue activities on a limited scale,
The Chinese make an irrational decision to sacrifice
economic benefits, and decide to force us out of
Mone Kon”.