SEORET
DI4D/HK 16
THE THREAT TO HONG KONG
Background
7 Feb 77
1. The Chinese Government maintains that Hong Kong is a part of China occupied
by Britain under the terms of a series of "unequal" treaties that were imposed
upon China at a time of internal weakness in the 19th Century. They further
maintain that Chinese administration of Hong Kong will be resumed by negotia-
tions at an appropriate time.
2.
Meanwhile Hong Kong's continued existence is a source of some political
embarrassment to the Chinese. It is a reminder of their country's weakness in
the 19th Century; though claimed by China it is manifestly outside Peking's
administrative control; its existence is used spasmodically by the Soviet
Union in an attempt to undermine China's credentials with the Third World;
its prosperity is a magnet for discontented elements in the neighbouring provinces
and a close and visible measure of the gap in living standards which China still
has to make up. But Hong Kong is also a great practical value to China as a
source of much needed foreign exchange (about 30% of all China's earnings in 1976),
an entrepot for her foreign trade, a centre of financial and technical expertise,
an international point of exit and entry, an observation post on the outside world
and a centre for intelligence activities.
3.
G
At present these benefits vastly outweigh nationalist and ideological
considerations and all the indications are that China does not intend to upset
the status quo at the moment. Chinese leaders at the highest level have privately
let it be known that while a problem exists, it is for the next generation (or
alternatively two or three generations) to solve.
THE EXTERNAL THREAT
4. The Chinese forces based in Kwangtung, who outnumber the Hong Kong garrison
by ten to one, could undoubtedly take back Hong Kong if they so wished. However,
for so long as the Chinese economic need for Hong Kong to remain British continues
to outweigh the ideological and political considerations for its return to China
there is no risk of military action. In any case the Chinese have indicated that
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