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(D) INCREASED COMMUNIST ACTIVITY AMONG YOUTHS IN SEVERAL AREAS OF THE NEW TERRITORIES WHICH HAS INCLUDED THE FORMATION OF SMALL

COVERT INDOCTRINATION GROUPS.

(E) INCREASED MINOR ACTS OF PROVOCATION BY CIVILIANS IN THE BORDER AREA SEMICOLON MILITARY VEHICLES USING THE BORDER ROAD IN

CONNECTION WITH THE CONSTRUCTION OF DEFENCE POSITIONS IN B.T. WERE STONED ON FIVE OCCASIONS AND POLICE/MILITARY PATROL WAS

STONED ON ANOTHER. THE ROAD WAS OBSTRUCTED ON ONE DAY BY ROCKS. P.L.A. PERSONNEL OBSERVED THESE INCIDENTS, WHICH WERE PERPETRATED BY ADULTS AND YOUTHS, BUT TOOK NO ACTION.

(F) THE INTERCEPTION AND SEIZURE OF THREE HONG KONG YACHTS, BY CHINESE COMMUNISTS, WHILST EN ROUTE TO MACAU ON 16 FEBRUARY. APART FROM ONE PASSING REFERENCE IN THE MINOR COMMUNIST NEWSPAPERS, THIS EVENT HAS BEEN IGNORED IN PUBLIC BY LOCAL COMMUNIST CIRCLES. GOVERNMENT ENQUIRIES THROUGH A LOCAL C.P.G. SHIPPING COMPANY HAVE

SO FAR RECEIVED NO RESPONSE.

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THE UPSURGE IN STONING ON THE BORDER NEAR SHATAUKOK

COINCIDES WITH INCREASED MOVEMENT BY MILITARY VEHICLES IN B.T. WHILE THERE IS NO EVIDENCE THAT THESE INCIDENTS HAVE BEEN OFFICALLY INSTIGATED BY C.P.G. BORDER AUTHORITIES THEY APPEAR TO BE MAKING NO PHYSICAL EFFORT TO DISCOURAGE THEM. HOWEVER THERE IS NO INDICATION THAT THE COMMUNIST POLICY OF AVOIDING SERIOUS TENSION IN THIS AREA

HAS CHANGED AND IT SEEMS UNLIKELY THAT THE SITUATION WILL BE

ALLOWED TO ESCALATE.

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3. UNITED FRONT WORK DURING THE LUNAR NEW YEAR PERIOD HAS BEEN THE MAJOR PRE-OCCUPATION IN LOCAL COMMUNIST CIRCLES, BUT THESE EFFORTS TO CONSOLIDATE THEIR OWN RANKS AND WIDEN THEIR BASE OF POPULAR SUPPORT HAVE MET WITH LITTLE SUCCESS SO FAR. THE VIRTUAL END OF THE RE-EMPLOYMENT CAMPAIGN WILL NOW LEAVE MOST COMMUNIST UNIONS FREE TO MAKE STRENUOUS EFFORTS TO RE-ESTABLISH THEIR INFLUENCE IN THOSE AREAS FROM WHICH THEY WERE OUSTED DURING CONFRONTATION, PARTICULARLY THE PUBLIC UTILITY COMPANIES.

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