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38. The Chinese are at the moment prepared to accept the existence of a colony on the mainland of China because it brings them positive gains both economically and politically (see Section D). They may also be deterred from attempting to take over the Colony by the consideration that this would involve administering a large number of potentially disaffected Chinese at a time when their internal economic and political structure is not well prepared to deal with the problems that this would
create.
Short-term Aims
39.
China now appears to realise that the campaign against the Hong Kong Government in 1967 was a failure. Violence has been
The Chinese would doubtless
condemned and virtually abandoned. still like to achieve a "Macao-type" situation, but apparently recognise that this cannot be brought about in the immediate future. At present, the policy of the Chinese is to maintain and expand their commercial interests in the Colony. Politically, the Chinese will no doubt profit from their experience of the last year in rebuilding the local communist apparatus and seck through this and through increased propaganda activities to broaden their base of support in Hong Kong. A heightening of the level of propaganda would probably precede action to take over the Colony. The nature and intensity of propaganda about Hong Kong,
both within the Colony and outside, should therefore serve as an
indicator of Chinese intentions.
Contingencies
40.
There are, however, circumstances in which the Chinese might seek to reduce the Hong Kong Government to a position of clear subservience, or even take over the Colony, before the expiry of
the lease in 1997. Such circumstances could well be created by: (a) Events in Hong Kong which directly and seriously damaged
Chinese prestige or obliged the Chinese to take active steps to fulfil their self-assumed role of "protector" of all those
of Chinese race;
(b) a severe deterioration of law and order in Hong Kong coupled
with economic chaos which might cause the Chinese to assume their role as "protector" as in (a) above;
(c)
(a)
an attempt to change the present status of Hong Kong in the direction of independence or closer association with Taiwan (or any third country), or to give it any other status
which would impede its eventual reversion to China; a struggle for power in Peking (or even in Kwangtung Province) in which either the opposition or the ruling
faction wished to focus attention on some external issue
with high emotional and nationalistic overtones;
or the emergence of a semi-autonomous Province of Kwangtung which might see economic or political advantage in taking over the Colony;
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/ (e) ...