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We consider finally what initiative we may possess in bringing the Chinese to negotiations about Hong Kong when the time seems right, bearing in mind that at any time China could make our position in the Colony impossible and force us to the conference table on their terms. The initiative would seem to be in our
hands only to the extent that :-
(a) the economic value of Hong Kong might be so important to China that they would be prepared to treat with us to preserve this so far as possible after our departure; the settlement of Hong Kong's future could be linked with a desire by China for a detente in its international relations.
(b)
G.
CONCLUSIONS
k
British Interests
(a)
(b)
(c)
At the present time it costs us nothing to maintain our position in Hong Kong (apart from our net expenditure on defence). We have a sizeable investment in the Colony and a considerable trade with it. It has accumulated large sterling balances and is not considered to be a drain on the sterling area foreign exchange reserves.
We derive substantial advantages from. it as a centre of communications and for intelligence operations, and politically it has some value to us in our relations with our allies, particularly the Americans.
But the economy is vulnerable under adverse trade conditions and Chinese pressures. In a period of prolonged economic recession or stagnation, the Colony could become a major liability. Internal pressures and outside criticism may build up because constitutional advance is inhibited. Our position in Hong Kong clouds our relations with China. And we are obliged to maintain a garrison there which would be at serious risk in the event of a Chinese takeover.
British Responsibilities
.(a)
We have obligations to safeguard the welfare and interests of about half the population of Hong Kong (i.e. to about
2 million, nearly all Chinese). We have a special obligation to some 100,000-200,000 Chinese who would be particularly vulnerable to Chinese retaliation because of their connection with us. In whatever circumstances we abdicate our position it will not be easy to discharge all our obligations to the Hong Kong Chinese or to remove or protect all British and Hong Kong-owned assets (other than a proportion of the moveable assets).
Chinese Interests
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