average of 6,000 per acre (whereas 300 per acre was regarded as

high in most parts of the world). The Hong Kong Government

should treat the Walled City in the same way as the rest of the

Colony's run-down areas, that is, clear and reconstruct the area.

He thought HMG should take its courage in both hands and so

instruct the Hong Kong Government.

3. Mr Royle said that this was a good idea in principal but the

danger was that the Chinese might wish to send their own people to

do the clearing. It would really be too risky. Mr Stuart agreed

that the present was a bad time particularly because of the issue

of the Chinese Representative in Hong Kong.

4. Mr Spearing said that he agreed generally with Lord Kennet.

He thought, however, that it was right to look at the problem

against the general background of Hong Kong public opinion. There

was a general dissatisfaction with the Government, for instance

over the Godber case. He was afraid that there might be a

groundswell of public reaction in Hong Kong against the failure

by HMG and the Hong Kong Government to take action over the

Walled City. Furthermore, outsiders might use the walled City

to berate either HMG or the Chinese Government; it was a blot on

civilisation. On the other hand the inhabitants appeared happy,

and efforts to demolish the area would clearly raise strong

reactions. Nevertheless a start could be made perhaps after the

Prime Minister's visit to China. Mr Royle agreed there would be

difficulties with the inhabitants over the slum clearance but this

was not the major problem since the Hong Kong Government was

constantly clearing slums; the main problem remained the special

status of the Walled City and Peking's possible reaction.

As to

/the Godber

2

CONFIDENTIAL

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