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PART I GENERAL
REVIEW OF 1949.
Relations with neighbouring territories
Hong Kong has had a difficult year in maintaining relations with China owing to the disruption caused by the civil war.
The policy of His Majesty's Government in the United Kingdom, which has governed Hong Kong's attitude, has been one of continuing neutrality in the Chinese Civil War and in pursuance of this Hong Kong has sought to maintain impartiality and friendliness in its dealings with China as a whole.
During the year the Chinese Communist armies advanced from the Yangtze down to Canton. Nanking itself fell on April 23rd and the Nationalist capital was transferred to Canton. On October 1st the establishment of the Central People's Government of the People's Republic of China in Peking was announced by Mao Tze-Tung. At the same time Chou En-Lai, Minister of Foreign Affairs of the new Government, officially informed foreign governments that the Peking Government was willing to establish diplomatic relations with any foreign government which was willing to observe the principles of equality, mutual benefit and mutual respect of territorial integrity and sovereignty. A number of foreign governments led by the Soviet Union and followed by countries of eastern Europe speedily
speedily recognised the Peking Government, but, by the end of the year, no firm decision had yet been taken by His Majesty's Government. British recognition was however expected at an early date, since by the end of December Nationalist armies had been driven from nearly all the mainland of China. Only Hainan, Formosa and a few islands off the coast of Fukien remained under Nationalist control. Canton itself fell on October 15th and the Nationalist Government transferred itself to Chung- king. On October 16th irregular Communist forces appeared at Shataukok on the Hong Kong/China border, and a few days later they had taken over control of the whole of the Chinese side of the frontier. There were no incidents, and relations between the British and Chinese authorities on the frontier have 'been formal and correct.
The civil war reaching Hong Kong's own frontier has naturally had disturbing effects, although the Colony has
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