SECRET UK EYES A

The pursuit of these objectives involves, as the Chinese see it, a combination of struggle against and cooperation with HKG and various elements in Hong Kong society. directed not only against political and other groups opposed to

Struggle is to be China's rulers, but also against any policies pursued by the Hong Kong Government of which China disapproves. Meanwhile, cooperation is necessary to help HKG maintain stability and prosperity.

Thus, on occasion the Chinese have provided much-needed support, notably by making funds available during the financial crisis of late 1987. However, the Chinese remain suspicious of HKG's motives and of the activities of ExCo and LegCo, especially of any moves designed to strengthen Hong Kong's autonomy.

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Senior Chinese have said that China might intervene in the event of serious unrest in the territory, and Deng told Sir Y K Pao in October 1989 that the Chinese would do so if Hong Kong became a base for subverting the socialist system in China. The Chinese leaders remain sensitive on the issue of subversion because of their sense of insecurity in face of their continued unpopularity in China, especially among the intellectuals, which is aggravated by the problems of generational change - and also because of continued vocal opposition to Peking expressed by groups in Hong the Kong and especially among the overseas Chinese communities in other countries. However, the Chinese are constrained by the terms of the Joint Declaration (JD) concerning the preservation of existing laws and freedoms from taking any forceful action themselves and from stepping up their demands that the HKG should suppress opposition to them.

In the event of serious unrest or opposition to Peking which threatened Hong Kong's stability and prosperity and seemed likely to undermine its value to the mainland, China would probably accuse Britain and the HKG of failing to fulfil its commitment under the JD to preserve Hong Kong's prosperity and stability. In such circumstances, the Chinese would ultimately be prepared to intervene, militarily if necessary, in order to prevent what they assessed to be a likely further deterioration detrimental to China's interest. But they would only be likely to go to these lengths in extreme circumstances, eg if Hong Kong suffered a serious breakdown in law and order which the territory's police and garrison were unable to control; or if there were widespread open support in Hong Kong for anti-government agitation in China;

DEBAAS

SECRET UK EYES A

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