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this action was most helpful and could have a salutary effect. Wo had
no largo deals of our own at that time through which wo could have
brought pressure to bear.
3. The Australians wanted to know what wo oyrselves wore proposing
to do about our trado with China. We explained that we had not asked
them to dony wheat to China but only to slow down nogotiations to help
us over the immediate crisis in Hong Kong. We told thom that wo wore
studying the question of our trade with China. Mr. Holt may enquiro
further about this. He might be told that this is one of the matters
boing studied by officials who are roviewing future policy on Hong Kong
and that we will keep in touch with him on the subject.
Situation in Hong Kong
4. What began as minor disturbances on the 6th May, arising out of a
labour disputo, was on the 11th May taken up and exploited by local
Communists with the aid of hooligan clements, some of whom wero paid.
A campaign was then mountod as a direct and doliberato challe? go to the
authority of the Hong Kong Government.
5.
Disorders coased on the 22nd May, the Communist leadership in
Hong Kong having suffered an initial defcat. Since then it has eschewed
violent methods and has:-
6.
(a) organised a series of token stoppagos of work,
notably in public utilities and government departments;
(b) continuod its anti-Government subversivo propaganda
campaign through the Press, posters and public address
systoms mounted on Communist-owned buildings.
By immediate disciplinary action against its om staff, the Hong
Kong Government has sought to load other employers into taking f****
action against those stopping work. Action has boon takon uhder omergency
powers against the use of public address systems and the display of posters;
there has been no effective Communist counter-action to those measures.
/As yot
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