1

2

space of

not ce

cover

3.

leakages of information as to the station's purpose and operation, especially if the Chinese authorities wanted the information.

(f) The provision of local labour would present no difficulty, although

its reliability and discretion could not be assumed, especially if the Chinese authorities were opposed to the whole scheme.

(g) Accommodation for installation and maintenance teams would

present no special problems.

OSI

(a) We foresee very considerable difficulty in providing for the

theoretical possibility of inspections in Hong Kong.

(b) Local legislation would be possible but see (d).

(c) Such legislation might take at least six months, even if the re

were no opposition and serious drafting difficulties did not arise.

(d) The matter could be legislated for either locally or in the UK. From Hong Kong's point of view, it might be better if the legislation were seen by the Chinese to have been enacted in the UK rather than Hong Kong.

In general the political and security arguments against both these concepts arise from the very strong reaction of the Chinese Government against any authorisation of Russian entry into Hong Kong, even though the Russians were to be escorted. As you know, we go to great lengths to exclude Soviet bloc nationals from Hong Kong because of China's acute sensitivity on this score. The Chinese authorities would assume, probably with justification, that the Russians would do their utmost to exploit their access rights for espionage, subversion and propaganda purposes. It is significant that the suggestion that Hong Kong be included as a site for a NSS came from the Russians. It looks like a straight forward try-on.

4.

There is the additional point that since Hong Kong itself is hardly likely to be a location for a nuclear test, the erection of a NSS or arrangements for OSIS would be regarded by the Chinese as aimed only at monitoring their activities.

5.

Quite apart from any technical arguments, I am afraid that it would make no sense politically to allow Hong Kong to be used in the way suggested.

Your

Kau Mism

(A K Mason)

CONFIDENTIAL

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