SECRET UK EYES A LOCSEN

15. Although previous disputes between HMG and China over Hong Kong

have not threatened security, the population may act more forcefully

as 1997 approaches. Moreover, the scope for differences in perceptions between London and Hong Kong on many issues is likely to

increase. The frustration of those who want to emigrate, but are

unable to acquire a foreign passport, would add to any hostility towards the British presence. Also, careful judgement will be needed

to determine what size of garrison should be left to the end, when

popular sensitivity and hostility towards the British element of the

administration could well be highest.

16.

Such issues will probably attract the attention of articulate

liberals who are likely to win a significant number of the 18 directly

elected seats in the Legislative Council this year. They may use this

platform to heighten public concern and, perhaps unintentionally,

raise the threat of disorder. In this respect indicators to watch

would include the formation of anti-HKG or HMG groups within the increasingly active political scene, and rifts between the Legislative

and Executive Councils.

17.

The Chinese would be concerned about the activities of liberals

who criticised Chinese policy towards Hong Kong or supported

dissidents in China, particularly if such people indulged in outspoken

attacks at a time of tension or disorder in Hong Kong.

18.

Should the Chinese leadership consider their vital interests to

threatened by developments in Hong Kong, military intervention

could not be discounted,

be discounted, despite the considerable political and

economic cost to China.

A-5

LOCSEN UK EYES A

SECRET

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