These are:

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and

(a) a situation of stability or

relative stability in both

Hong Kong and China during

which the British Government

might decide to end the

colonial status of Hong Kong;

(b) a situation of such Communist-

inspired confusion in Hong

Kong that it was no longer

possible for a British

administration to remain

there.

(a) is highly unlikely in the near future.

The Cultural Revolution showns no sign of com-

ing to an end and seems certain to continue

for some months at the least. So long as it

does the campaign against the Hong Kong Govern-

ment will persist and negotiations in an

atmosphere of calm will be out of the question.

We consider below what might happen after the

Cultural Revolution. At present the only

situation in which negotiations seem possible

is (b). This presupposes that the campaign

against the Hong Kong Government continues and

is increasingly successful. In such circum-

stances, realistic negotiations with the

Chinese would be very difficult. Experience

has shown that the Chinese are most reluctant

ever to negotiate about what they regard

indisputably as Chinese territory. If they

were winning their campaign in Hong Kong to

such an extent that we were forced to start

withdrawing, it is almost certain that the

Chinese would pres. their advantage to the

maximum with the intention of achieving the

/greatest

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