CONFIDENTIAL

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Mr McNally, Private Office

HONG KONG:

1.

INTERNATIONAL COMMITTEE OF THE LABOUR PARTY

In answer to your minute of 28 October, I attach copies of the notes prepared in the Department with the help of the Labour Adviser, and of Hong Kong's comments on those notes in their telegram no. 1108 plus the letter of 4 December 1973 referred to in that telegram. You may also like to see the answers which we have provided this week to a number of written questions from James Sillars MP on social affairs in Hong Kong.

2.

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I am afraid the gap in all this material is detailed comparisons with other Far Eastern countries, but neither the relevant departments nor the Hong Kong Government have been able to provide exact figures in the time available. We have therefore had to be content with generalisations, for example on comparative wage levels.

3.

I imagine the Committee may want to pass on to consider the more general question of the purpose of our administration of Hong Kong. For this you may like to look at the attached draft Country Assessment sheet which we have prepared for internal use

in the FCO.

Lt.

I think the theme to get across is that while, if we were now invited to set up a Colony in Hong Kong, we would doubtless think twice about it, the status quo is in the interests of all, particularly the four million Chinese inhabitants. All of them, even the poorest, are there because they want to be. Many of them are themselves immigrants and many more would come if they could. For their part the Chinese Government explicitly do not want to

disturb the present administration.

5.

But Hong Kong remains an artificial creation where a failure of confidence could present us with some very nasty choices. In the past the Hong Kong Government have been influenced by the success of their conservative economic policies and by the risks of change, into moving slowly on the social front (though enormous

COURT PUNTT AT

/efforts

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