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3.
(a)
1993
If it is assumed that the Colony will be returning to China not later than 1997 (the termination of the lease of the "New Territories") there must, as this date approaches, be a decline in confidence in the Colony leading to the possibility of prolonged economic recession. This could be quite a significant factor in the situation by the 1980s, if not before.
It would be wrong, however, to concentrate entirely on the negative aspect. The Chinese are for the present clearly prepared to accept the continui.g existence of the Colony on account of the economic and political advantages it brings them. There are no signs that an early renewal of the 1967 campaign of violence is likely, and the Chinese apparently recognise that it may take a long time to bring the Hong Kong Government to subservience using the methods which they describe as "long-term struggle" Their immediate aims are to increase to the maximum their commercial interests in the Colony and to concentrate on broadening the base of their support among the people. This is a state of affairs which in the best circumstances might last for some years yet. Moreover, in the meantime a new regime may emerge in China. There is no solid ground for believing that any such regime would be more accommodating. But it would be wrong to assume that it would not.
4. In view of the difficulties which seem almost inevitable for the future, officials in making their study were understandably concerned to ensure that all feasible precautions for forestalling disaster had been considered and that no opportunities had been overlooked for initiating policies now with the Chinese that might make the problem easier to deal with in future.
It is,
I think, a reasonable conclusion from the report that there are no fresh initiatives that we can take in present circumstances that would make the problem of Hong Kong less intractable in the longer term. There can be no clean-cut, tidy solution to the predicament facing us. Were we to attempt to discuss it with the present Chinese regime we could only expect hostility (even malevolence) and a desire on their part to pay off old scores. The Colony will remain, as the Chinese themselves have put it, the crux of Sino-British relations. Our presence there, despite
But the advantages they derive, must be an irritant to them. efforts on our part to extricate ourselves prematurely might well turn out to be a greater irritant. For the present, I am sure that we must continue to show firmly that we intend to maintain our position, giving no indication whatsoever that we might, in certain
Confidence circumstances, contemplate premature withdrawal. within Hong Kong is fragile and would not survive the knowledge
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were considering possible terms of withdrawal. Moreover any sign of weakening resolve on our part would lead to increasing Chinese pressure. It would be no gain if, in an effort to mitigate the long-term difficulties, we were to precipitate an immediate catastrophe.
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