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CONFIDENTIAL
entitled "The Position of Hong Kong and Macno in Recent Chinese Legislation" by Mr AR Dicks, who presents his researches as an investigation into "the obscure question of the legal status of Hong Kong and Macao in the eyes of the Chinese legislator". Mr Dicks argues that a Chinese law, Regulations for the Carriage of Goods by Water, promulgated on 28 December 1971 and brought into force on 1 April 1972 marked a departure from the premises of earlier legislation. Before 1971, Chinese legislators had seemed to treat Hong Kong and Macao under the general heading of "foreign countries" or at most as territories sui generis,
external to the national frontier for customs
purposes. The new legislation, on the other hand, made specific reference to Hong Kong and Macao (although only to exclude them from the scope of the Regulations) and, according to Mr Dicks, implicitly albeit negatively claimed Hong Kong and Macao
as Chinese national territory. Mr Dicks concedes that one new law hardly constitutes a radical re-
interpretation of Chinese views on the legal status of Hong Kong and says: "the Regulations can scarcely be said to spell out the precise legal status which
the Chinese Government would like to ascribe to the
two territories". However, the marker put down by Chinese legislators in 1971 is an interesting one, highlighting Chinese views of the status of Hong Kong, and showing how legislators "in asserting a power to legislate for Hong Kong and Macao
suggest a measure of sovereignty which is much more than merely residual".
35. Despite the new trend which may have been evident in the sphere of Chinese legislation, Chinese policy towards Hong Kong in the early 1970s was growing generally more relaxed and pragmatic. Chinese policy reflected an apparent desire to strengthen friendly relations with
Britain and to avoid confrontation with the authorities in Hong Kong. Such attitudes were prompted, it would seem, by a growing awareness of the economic benefits to be derived from the Colony. The value of Chinese exports to Hong Kong steadily/increased