SECRET
Although some private businessmen were initially tolerated by the Communists in Shanghai, the Communists moved quickly to establish state control and by January 1956 all privately-run business in Shanghai had been eliminated. During this process many businessmen were victimised; some were executed and many more imprisoned. There is, however, an obvious difference between the circumstances then and now. In the 1950s the Communists were in the first flush of their revolutionary enthusiasm and building a new state. They are now well aware of the advantages which they derive from Hong Kong with its well-established capitalist system, whereas in the early 1950s they inherited conditions of economic collapse in Shanghai as in other Chinese cities. It is worth noting, moreover, that even at that time (and during the Korean War) the Chinese refrained from taking serious measures against Hong Kong.
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{der Ricketts
(P F Ricketts)
Private Secretary
SECRET