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CONFIDENTIAL

On 19 December, the South China Morning Post

reported on the press conference in a front-page story headlined "China spells it out five times: Status Quo of Hong Kong stays", and quoted Zhang Zheng:

"Hong Kong is a problem left over from history and we are not eager to tackle it. It requires a long period of time to deal with the problem. It is still too early to say how long this will take but it will depend on the situation in South-east Asia and in the world. As it stands

Hong Kong is of interest to both China and Britain and both sides need a long period of consideration to decide what is to be done

about it".

It is not clear whether Zhang was here voicing simpl his own personal view or whether these comments were prompted by any higher political authority. It should be noted that none of the communist newspapers in Hong Kong chose to emphasise these particular words.

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On 1 November 1977 the first issue of a new journal called Zheng Ming (Cheng Ming) appeared in Hong Kong. Although the precise relationship between the publishers and the CCP has yet to be established. this monthly paper has shown itself to be generally well in step with a number of official CCP views and

may thus be regarded as at least an indicator of current thinking in Peking. It is therefore

interesting to note in the first issue one article by Yu Yizhi (Yu I-chih) entitled "Chinese Communist Policy Towards Hong Kong and Macao in Perspective". The article referred to Li Qiang's in Red Flag and elaborated the argument regarding the "political" importance of Hong Kong to China. The author puts the question of the recovery of Hong Kong into the context of Chinese global strategy:

"Their prime task in the international arena is to unite and win over the third and second worlds and to oppose the first world, especiall Soviet hegemoni an This is the chief objectiv/of

CONFIDENTIAL

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