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hands for the time being so as to continue
to receive economic benefit from it; they are
afraid to risk nuclear retaliation by the
United States or even the United Kingdom which
they might think would follow a direct military
attack; it is part of the Maoist creed that
"liberation" should be the result of local
initiative, springing from strong indigenous
roots, and should not be imposed from outside.
These inhibitions on a direct Chinese military
attack do not exclude the possibility of
their sending in military forces on the pretext
of restoring order if the situation in Hong
Kong got completely out of control. Assuming
this does not occur, we consider the most
likely Chinese policy over the next few months
will be to encourage the continuation of
subversion within the Colony and to try to
improve and consolidate local communist
organisations.
5. In order to avoid the possibility of
prolonged disturbances which would have very
damaging effects economically and mgth
eventually make our position untenable, would
it be possible to negotiate a withdrawal with
the Chinese? It is assumed that no negotiated
withdrawal would be possible if China had
launched a military attack, as negotiations
would require a pause in the fighting which
would only be likely to occur in conditions
of stalemate. Such conditions would be incon-
ceivable in view of Chinese overwhelming local
military superiority. There are two other
types of situations in which negotiations for
such a withdrawal might be contemplated.
/These