9.
CONFIDENTIAL
Since then, there has been no major action taken against the KIT in Hong Kong although its activities continue to be monitored and one illegal immigrant from Taiwan who was engaged in intelligence and propaganda work for the KMT was deported at the beginning of this month. The ramifications of the case are still being investigated and no further detail can be divulged at this stage.
Future Trends
10.
It is, expected that the KMT will continue its efforts to carry out both propaganda and covert intelligence activities in Hong Kong. However, the KMT is clearly aware of its vulnerable position in Hong Kong and the main focus of its activities is likely to be on overt propaganda and the cultivation of support for Taiwan within the framework of the law. This was illustrated by the KITT directive that sympathetic organisations in Hong Kong were to take no further provocative action after the demonstrators had been arrested on 20 December as a result of the protest against the normalisation of Sino-US relations.
11.
In general terms, KMT influence amongst the local community is likely to wane as relations between Hong Kong and China improve. An early indication of this may be seen in the failure of all three KMT-sponsored candidates to gain election to the Urban Council on 8 March. There is a remote possibility that the KMT could attempt some form of antagonistic or militant activity in desperation if it feels its position in Hong Kong is deteriorating too rapidly, but in view of the political realities of the situation such a course is considered very unlikely.
CONFIDENTIAL
3.