0003230
+
* G.F. 323
CONFIDENTIAL
schoolboy was injured by the explosion of a bomb that he was carrying. Indeed
towards the end of the year there was a noticeable increase in the number of
schoolchildren involved in activities connected with confrontation and in the
truculence towards authority that they displayed. These children were almost
all pupils of communist-dominated schools in the Colony and it must be concluded
that they were being encouraged in these activities by their teachers as part of
a concerted plan by the communists to bolster up their dwindling ranks.
Many
of these schools have become centres for the storage and dissemination of
inflammatory literature and even for the manufacture of bombs, both simulated
and real. On the 27th of November a youth was severely injured in an explosion
in the Chung Wah Middle School. The school was closed by Government, which
evoked a protest from Peking.
Not all of those who have taken part in the demonstrations and riots have
subscribed to the communist aims. Many of them were employees in communist
concerns who were instructed to take part, and others and particularly the
hooligans who exploited the initial rioss at San Po Kong were paid to do so.
-
It is a sad commentary on communist tactics that they should have to employ
children as well in these activities and to expose them not only to arrest and
imprisonment for their criminal activities but also to physical danger.
It is also a reflection on their failure to gain general support for
their cause.
The results which have been achieved, and which have attracted
so much publicity overseas, have been the work of a small monority. The bulk
of the population has refused to become involved but has gone about its normal
work. Indeed in spite of the strident claims in the communist press the
efficiency of the Colony has been suprisingly little disturbed. While it is as
yet too early to assess the long-term economic effects of confrontation, present
evidence suggests that there has been no significant disruption in any of the
major sectors. Industrial production was not affected at all and exports
continued throughout at substantially higher levels than in previous years.
The tourist trade continued satisfactorily in spite of alarmist headlines in
some overseas newspaper. At the height of the disturb nces substantial deposits
wore withdrawn from banks but as most of the sums withdrawn were converted into
Hong Kong currency, outflow of capital was contained within fairly narrow limits,
although it was accelerated to some extent in June by the Middle East crisos
and consequent pressure on sterling. Their strong liquidity position enabled
the banks to withstand these withdrawals without difficulty and without imposing
CONFIDENTIAL
/16.