because it is the only modern usable large deep sea-port in

the China Sea, through which passes so much commerce every

day. Shanghai before the War, was far more important than

Hong Kong, which was, at that time, almost a back water.

Because of the collapse of Shanghai, both during and after

the Japanese War, and because of the comparative stability of

Hong Kong, it is now so prosperous. I do not myself think

that in the next 13 odd years that are left before the change

must take place in the status of Hong Kong, Shanghai would

have retrieved her old greatness. Furthermore, I think that

the Government in Peking has learned by the collapse of

Shanghai, that it is not in China's interest to have Hong

Kong go the same way. On the other hand, again, there is an

old Chinese saying that where where honour is concerned,

wealth means nothing, so, any settlement must be honourable

to the Government of China.

Just recently, I have heard it advocated that

the best thing for the settlement would be a renewal of the

New Territories Lease, but this time on fair and reasonable

terms. This suggestion would be completely unacceptable to

any and every politician in Peking. Indeed, it would be

political murder for any Chinese person to even suggest it.

In my opinion, the first point in Stage 1, that of

sovereignty is essential, so as to show the Government in

1

Peking the honesty of the U.K. s intentions. Of course, the

settlement must also be honourable to the Government of Great

Britain. However, speaking as a Hong Kong man, most

essential of all, is to achieve a settlement that permits the

man in the street in Hong Kong to carry on in the same way

that he has done over the past 20 years.

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