UK EYES ONLY
ANNEX A to DP 3/68(C)
TOP SECRET (Preliminary Draft)(Continued)
is likely to use methods other than direct aggression, such as a co-ordinated and systematic campaign of terrorism, aimed
at undermining public confidence and at disrupting the machinery
of government and the ecomony to an extent that would make the
British position untenable. There is at present no sign that
such a course will be pursued, but there will continue to be a
risk of action on these lines.
We are likely to get at least
some warning.
C. With more realistic elements in the ascendant in Peking
at the end of 1967 and some signs that the lull in the Cultural Revolution is to be prolonged, Peking ordered a major policy
change calling for the abandonment by the local Hong Kong
communists of violence and the continuation of the struggle
by political means.
d.
If, during the next few years, confrontation was again raised to the level reached during the summer of 1967 and was maintained for a prolonged period, it could have a very severe effect on the ecomony and the confidence on which Hong Kong's
viability depends. Peking would therefore try to ensure that
such a campaign were regulated so as to avoid the disadvantages
attendant on serious economic decline or collapse.
e. A policy of moderation could quickly be reversed, particu-
larly if the Cultural Revolution flared up again with a
resurgence of extremism, although at present this seems un-
likely. But if it did, it could create a heightened danger
of direct action against Hong Kong either deliberately, or by
miscalculation.
f.
One factor Peking will have in mind is that any British
decision to reduce the size of the garrison coupled with the accelerated withdrawal of the British military presence from
the Far East, could, in due course, have an acute effect on
A
2
TOP SECRET
UK EYES ONLY