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true that Hong Kong would remain useful to the western world in this context. This was especially so in the case of the United States.
5. Karuda responded that, although this might be the case with Western European and orth American countries at the present time, the Japanese did not see things continuing this way. Their ideas for the future included the possibility that Japan herself would act as the intermediary between the U.S. and China. If this happened the importance of the Hong Kong listening post and contact base would tend to diminish. He implied that some, at least, of the Japanese saw Hong Kong, if not as a rival, at least to some extent as a hindrance to Japan in developing this role. Indeed, he almost went so far as to hint that from a political point of view Japan would not be too sad to see Hong Kong disappear, although he naturally did not go so far as actually to say this.
6. The conclusion I draw from this and it can naturally only be tentative from one conversation over lunch is that Japan has little or no political interest in the position of Hong Kong. Her only real interest in the Colony is as an open market for her products and she, quite correctly, expects this to go on regardless of what action sho takes over generalised preferences. What she seems to be more concerned with is the longer term position in S.E. Asia, when a large part of the region may well become little more than an economic appendage of Japan. I think she clearly sees South Korea in this position, and Taiwan if it continues to exist. But she has probably decided that Hong Kong forms no part of this long term picture and that, given its present dependent status which in any case limits their possibilities for political influence, it can be left to stew.
7. I am sending copies of this letter to Britten in the FCO Kemmis and J.G. Morris (Board of Trade), Cortazzi (Tokyo) and to Dorward in the Commerce and Industry Department, Hong Kong.
Junever
Dachfe
(D.J.C. Jones)
Counsellor (Hong Kong Affairs)
CONFIDENT A