CONFIDENTIAL
(e) Faragraph 3
I suggest you might like to check the figure of 60% representing the proportion of textiles in Hong Kong's total exports to the USA.
(r) Paragraph 9
the
We have a number of minor changes to suggest and we propose the paragraph should run as follows :
"Hong Kong is of strategic value not only to the United Kingdom but also to the United States and our allies. The population is 98% Chinese and there is a strong Communist element particularly in the trade unions. There is a substantial number of Communist newspapers, all but one Chinese language papers, and the Communists also run a number of schools where the curricula are heavily slanted towards Communist indoctrination. There was a dangerous period of social unrest and rioting in 1967 caused by Communist agitation but this has been followed by a period of relative calm since in recent years the local Hong Kong Communists appear to have been under instructions from Peking to keep within the law. An economic crisis resulting in heavy unemployment or a fall in the standard of living could lead to further social unrest which could be exploited by the local Communists. But China evidently considers the continuance of the Colony in its present form as in her interest, since China derives considerable economic and strategic advantage from Hong Kong. Local opinion regards the existence of British troops stationed in Hong Kong as an assurance of our intention to maintain our position in the Colony. The principal role of the Gerrison is to assist in maintaining internal security and local confidence: if either were to slip the Chinese People's Government would be tempted to exploit the situation, and our position could rapidly become untenable.
the constitutional status quo
to be maintained.
I am sending copies of this letter to Slater, Peat and Gregory.
(E. 0. Laird)
CONF IDENTIAL