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16 A
2.
2.
incidents and boycotts to demonstrate their power within
HONG KONG and go on to prove the dependency of HONGKONG on
its hinterland by extending the boycott to CANTON, SWATOW
and KWANGTUNG and even to boycott BRITISH trade and effort
throughout CHINA, playing with certain American, Russian
and other foreign interests who might find it profitable.
They would hope to convince BRITAIN and the Dominions that
HONGKONG as a British Crown Colony would be not an asset
but a never-ending source of trouble and that we had better
retrocede it with as good grace as possible. The Chinese
might again feel that they needed British support in
rehabilitation so much that they would wait until the
Kowloon Leases expired. But sooner or later they would
bring more than verbal pressure to bear and HONG KONG would
remain a standing grievance and an open sore in Anglo-
Chinese relations.
Retrocede HONGKONG to CHINA, but capitalize the situation
by bargaining for considerably greater improvements in
our general and commercial position in CHINA than
otherwise obtainable.
This line has attractions. The Chinese would
appreciate a successful bargain more than a gift, and
might be disposed to grant more liberal rights and
privileges to foreigners in return, e.g. in commercial
7
and cultural laws, representation in municipal government
at the big ports, particularly at SHANGHAI, the right of
participation in coastal and river shipping, etc. But even
if the terms offered were most alluring (they would
probably be applauded by the U.S.A. and other Nations)
they would depend eventually on the future stability of
the Chinese Government and its promises. CHINA might
fall a prey to Civil War. The Communists might oust the
Kuomintang, the U.S.S. R. might predominate. If Chinese
promises proved illusory, we should have given up our
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