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might well be little need for us to stay since it would be the kind of government to which we could conscientiously hand

over.

39.

The considerations likely to influence the Chinese in a

decision either to take over the Colony or to maintain the

status quo are set out below:-

(a) Towards a take-over

(1)

Security: China might conceive her

security threatened if her enemies (e.g. Taiwan, U.S.A.., U.S.S.R.) used Hong Kong or were likely to be in a position to use Hong Kong as an effective base against her. (China has shown sensitivity in the past over Kuomintang use of Hong Kong as a base for intelligence and sabotage operations and over the presence in Hong Kong of U.S. forces for rest and recreation).

(ii) Declining value of the Colony to China:

either in the economic field or as a base for

subversive propaganda elsewhere.

(iii) National feeling: this might move naturally against foreign occupation of parts of Chinese territory or more likely it could be stimulated to

galvanise enthusiasın at home which could be

harnessed to some domestic objective, as occurred

with the "Resist America Aid Korea Movement".

(iv) Ideological pressure: this could bring to the fore the inconsistency of a situation in which Mao's invincible theory of revolution had failed to triumph in Hong Kong. It could also oblige elements in the leadership, as in the Cultural

Revolution, to demonstrate their revolutionary credentials by adopting harder policies, e.g. on Hong Kong, than they would normally do. (v) International prestige: China's image as a leading anti-colonialist power might require the elimination of this Colony "on its own doorstep" (this has been the tenor of frequent Soviet jibes).

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