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B*
BRITISH INTERESTS
Political
3.
Hong Kong is of political benefit to us as a Free World enclave on the mainland of China, demonstrating that a "free" society, even (of necessity) without representative government, is preferable in the eyes of many Chinese to the communist society of China. Chinese influence has ensured that its retention by us has not been a target of the anti-colonial lobby at the United Nations. Its loss to China would be a severe blow to Free World prestige in Asia and would correspondingly boost China's prestige particularly among the overseas Chinese in South East Asia. Our presence there is a
British contribution to inter-dependence.
The Americans
recognise its usefulness.
4.
There are on the other hand a number of political disadvantages in our position. Our inability to develop representative institutions in the Colony is a startling anomaly in our post-war record of colonial administration, and difficult problems may lie ahead as there emerges a generation brought up and educated in Hong Kong in Western ways for whose energies there can be no outlet in political activities. Moreover our position in Hong Kong clouds our relations with China andmight stand in the way of their improvement. The attack on our Mission in Peking was the direct result of our refusal to comply with a Chinese ultimatum on the treatment of communist Press representatives in Hong Kong. Recent exchanges with the Chinese suggest that members of the British Mission and also possibly other British subjects in China are being held as hostages by the Chinese in order to secure concessions on Hong Kong.
Economic
5.
Our exports to Hong Kong in 1967 were £62 million f.o.b. (of the same order as our exports to Japan), a proportion of which goes on to other markets through Hong Kong. If the Hong Kong market was lost to us, we might save what we could sell direct in the markets hitherto supplied through Hong Kong, but clearly a lot of these frustrated exports would be difficult
to sell elsewhere at first.
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