CONFIDENTIAL
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6. The balance of power in Macau remains precarious, but it is clear that the Chinese have been cracking the whip in recent months. Assembly man Roque Choi, who was the channel of communication between the "official" Chinese in the mainland Chinese Namkwong Company and the Governor, has told Geoffrey Perry here that it was made clear to the Governor and Assumpçao that, if they failed to achieve a working relationship, the future of the Portuguese administration would be at risk.
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We have also heard from three sources, including a journalist on the South China Morning Post (the main English speaking paper in Hong Kong), that an agreement exists whereby the Chairman of Namkwong will arbitrate on any point of conflict between the Governor and Assumpcao. We may, therefore, expect the administration in Macau to continue to be led by the Portuguese and Macanese in Macau with the Macau Chinese in a state of watchful neutrality. All parties are, however, now more than ever aware that they are under close and critical scrutiny by China herself.
c.c. Political Adviser M Elliott Esq FED
A Galsworthy Esq HKD P Thomson Esq Peking
CCW Adams
CONFIDENTIAL.