Geopolitical Position

1.

SECRET

HONG KONG

BASIC PROBLEMS

The Crown Colony of Hong Kong is by far the largest

(in terms of economic activity and population) of our

remaining Dependent Territories. It is one of the most

densely populated areas of the world. There can, however,

be no constitutional progress towards self-government in the

Colony since there have been frequent and plain indications

that the Chinese Peoples Government expects the constitutional

status quo to be maintained.

2. The Hong Kong Government has constantly to bear in mind

the susceptabilities of its infinitely more powerful communist

Chinese neighbour while at the same time making it clear to

the world at large that it is master in its own house and

has no intention of being reduced to a communist cypher as

has happened in the case of its near neighbour Macao. It

demonstrated the latter point very clearly by its handling

of the communist inspired disturbances which occurred in the

Colony during 1967. One major factor that the communists

apparently overlooked on that occasion was that approximately

one third of Hong Kong's population of four million people

consisted of refugees from Communist China who had "voted

with their feet" for the way of life that the Colony could

offer them.

SECRET

13.

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