8.

9.

10.

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and to embark on a long-term ideological struggle for the hearts

and minds of the people of the Colony.

This switch to a non-violent long-term campaign for popular

support gets Peking "off the hook" with their supporters in

Hong Kong, gives the latter something to keep them busy, gives

themselves (Peking) breathing space in which to lessen Chinese

economic dependence on Hong Kong against the time if/when the

general public of Hong Kong have been won over to Communism and

are waiting for the Colony to be taken over by China.

Provided that the Hong Kong Government:

(a)

(b)

Do not afford the Communists gratuitous opportunities

for crusading on behalf of the masses (e.g. labour

policies, housing, social welfare etc.);

Do not allow their authority to be eroded by the

constant efforts of the Communists to bring about a

Macao-type situation (which still remains the aim of

Peking);

(c)

Does not encounter a major economic crisis leading to

wholesale unemployment in the Colony,

it is most unlikely that the Communists will succeed in winning

the hearts and minds of the people of Hong Kong.

The attitude of the general public in Hong Kong is more

likely to be governed by the knowledge that only 30 years remain

of the lease of the New Territories, without which Hong Kong would

not be a viable entity.

11.

Investment in Hong Kong has always been of a short-term

nature (5-10 years). It seems unlikely that the attitude of the

general public will change noticeably until the 1980's.

They

12.

will then probably start looking over their shoulders to China

against the expiration of the lease of the New Territories and

begin to trim their sails according to the wind from that quarter.

The other development which might prompt China to intervene

in Hong Kong (a substantial lessening of Chinese dependent on

/Hong Kong

CONFIDENTIAL

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