SECRET
Hong Kong's Policy towards China
Present Policy of local Communists
activities. With the rapidly changing situation in
South-East Asia, the value of the Colony as a listening post
and staging point will increase, Hong Kong also depends
heavily on Chim for essential supplies, especially food and
so is of direct economic value to China; between a third and
& half of China's foreign exchange earnings comes via the
Colony.
These earrings play a major role in financing China's
trade deficits with other areasof the non-communist world.
13. Hong Kong's policy towards China has been one of
"fizness without provocation"; in particular, the
Government is careful not to cause offence, e.g. by avoiding
official contacts with the Nationalist authorities in Formosa,
and oy ensuring as far as possible that the latter do not use
Hong Kong as a base for their subversive and intelligence
activities against the mainland.
COMMUNIST CON ROTATION
14. Since the end of the communist inspired disturbances in
1967, the local communists have avoided violence in their
programme of confrontation with the authorities. They are
under firm instructions from Peking to act within the law and
to direct their activities to building a broader political
base in the Colony. They have kept up their criticism of
the authorities using whatever means may have come to hand
and there is every indication that they will continue
indefinitely in their efforts to undermine the authority of
the Government and to win over the general public to their
own side.
SECRET
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