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10.

When serious unrest has occured in Hong Kong, it has generally

been the result of flash incidents that escalated to the point where

the deployment of security forces became necessary. Only Kuomintang (KMT) related riots in 1956, and the 1967 Communist-led confrontations

during the Cultural Revolution, were politically motivated and organised. Last year's demonstrations against the suppression in Beijing attracted up to a million people, but passed off with little

or no disorder.

11. Given that Hong Kong will revert to China in 1997, Chinese instigated unrest is assessed to be most unlikely. It will, however, be necessary to continue to monitor closely Chinese activity in Hong Kong, including comment through the National China News Agency, local pro-Beijing media and mainland press. In particular it will be necessary to watch any attempt by the Chinese to gain influence within. the RHKP, although at present there is no evidence to suggest such

action.

12.

Although covert subversive activities by the KMT Intelligence Sevices against the PRC continue to be mounted from Hong Kong, KMT sponsored violence in the territory is not envisaged. The KMT does not recognise the Joint Declaration and rejects the concept of "one

country, two systems". However, Taiwan has significant financial interests in Hong Kong, and there are no indications that it intends

to undermine stability.

13. The illegal Triad societies would probably exploit any breakdown in law and order to engage in looting. But they are almost certainly unable themselves, and probably have no desire, to initiate unrest on

a scale that would seriously threaten stability.

14. Acute public concern due to a collapse in political and economic confidence could however threaten security. This could be manifest

in demonstrations, strikes, other disruptions of key services, and threats against HMG and HKG institutions, buildings and personnel.

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