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5.
Into a second category would fall any measures which gave Peking the impression that we were encouraging the emergence in Hong Kong of a political "third force". Linked with this are arrangements for "institutional change". If reference were made publicly to "institutional change" it could give rise to the belief that we were planning some change in the constitutional status quo. We must be very careful not to encourage a suspicion that HMG plan to promote, perhaps by stealth, the growth of an independent local political force which as it became established could threaten the plans of the Chinese to increase their own influence in the colony. I can see that the interest in the U.K. is in making the Administration in Hong Kong look more "representative". There is a direct contradiction here because the only interest of. Peking in changing the status quo is in order to extend their own influence in the colony. The same point applies to the growth of trade unionism. Peking is likely to look with suspicion on any attempt aimed at building up a rival to the unions they dominate. Genuine trade unionism has always been an anathema to any Communist government. The long and the short of it is that Peking are content with the status quo in which the administration of Hong Kong is seen to be firmly in the hands of a British Administration. The apparent sharing of political power in Hong Kong with anyone, even local political forces, other than themselves would constitute an important change in their eyes.
6. This does not mean that I think that there can be no progress in the areas covered by the Paper. For example, I do not see danger in a steady programme of social improvement in the fields of housing, welfare benefits etc. Changes of this kind are not likely to prove dramatic enough to invite a hostile reaction here, (always providing of course the measures adopted are not such as to lead to unrest over the means used to finance them (c.f. the riots over the fare rises on the Star Ferry in 1966). Modest and unobtrusive adjustments in the existing administrative set-up in Hong Kong may also be achievable. But all these issues, which would in any case have to be handled cautiously, will have to be handled with double delicacy of touch as long as the situation on the mainland remains as volatile as it is now.
7.
There is also one point in the Paper which I am not sure that I understand. Para 21 about the expansion of the Legislative Council concludes with the statement that the advantages of making Government more responsive to local opinion outweigh the undeniable disadvantages, "but the ground would have to be well prepared, not least of all with Peking". Does this mean that it is proposed to try to talk to the Chinese about the future institutional development of the Hong Kong Administration? If so, it seems to me to raise some big issues. If we were to raise the question it could well provoke prematurely the discussion of the future of the colony which we are all agreed we should avoid at least until the beginning of the 80's. If we raised the question and Peking did respond with a proposal that their nominees
.2.
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