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political and economic interests in these two places.

verthele, their work in Hong Kong has not always been clean sailing; it was adversely affected during the Cultural Revolution period. After the collapse of the Gang of Four, Foreign Trade Minister Li Chiang pointed out in an article entitled "Distinguish between the right and wrong in the line and actively develop socialist foreign trade", published in the October 1977 issue of "Red Flag", that work must be done well to increase supplies to Hong Kong and Macau. The article said:

"Hong Kong and Macau are Chinese territories. Over 98 percent of the inhabitants are our compatriots. The question of Hong Kong and Macau is left over from history and will be settled in an appropriate way when conditions are ripe. Under the present circumstances, the export of supplies to Hong Kong and Macau is a special problem of China's foreign

trade.

"Chairman Mao and the Party Central Committee have always paid serious attention to and expressed extreme concern about the question of Hong Kong and Macau, and set down correct principles and policies regarding them. With regard to the supply of commodities, Premier Chou directed: 'Those areas that are able to do so must share in the burden of keeping

Hong Kong and Macau supplied: they are not allowed to step back.' This is not only an economic question but also a political issue."

Three periods

Li Chiang's article appeared to emphasise the stepped-up adjustment and development of Chinese activities in Hong Kong following the collapse of the Gang of Four. Their work in Hong Kong since the inception of the PRC can be divided into three phases:

1 The period of steady development from 1949 to 1965. Although there were ups and downs in this period, the basic performance was steady and practical, with notable

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2.

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