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11. On the other hand a hostile Chinese Government could probably make life impossible for us in Hong Kong, even if it was not in possession of the New Territories: this is indicated by the strike and boycott of 1925/6 which virtually paralysed the trade of the port. It is also arguable that as Hong Kong is geographically, economically and ethnically part of China it would be possible to make limited concessions in this instance without very great loss of "face" and without encouraging further Chinese agitation in other areas such as Malaya.
ya cemiter
12. A possible concession of this nature would be the retrocession of the New Territories to China. Such an arrangement would however raise many difficulties. The far lower standards which the Chinese Government would administer in such matters as security and public health for Chinese territory would make our position in our portion of the city of Kowloon most embarrassing and difficult. For instance, in the absence of Social Services in the Chinese province of Kuang Tung, or indeed elsewhere in South China, it has been the common experience of the Hong Kong Government that vast numbers of semi-destitutes from China tend to flow in to the Colony to take advantage of such free board and lodging as a progressive British Government may provide for destitutes in the Colony. The obvious remedy of restricting the free entry into Hong Kong of Chinese immigrants has been shown to be almost completely impracticable and was strongly resented by the Chinese Government when it was attempted. Such restrictions would be even less possible with the Chinese in control of the New Territories and the British boundary running close round the main Island and cutting through the city of Kowloon.
13. A possible compromise which has been suggested for surmounting these difficulties would be to arrange for the following:-
拿
(a) An Anglo-Chinese joint board of management for the
airfield and for the water storage and supply system.
(b) A Joint Municipal Board for the urban district of the New Territories adjoining the Eritish portion of Kowloon.
(c) Chinese Government representation on a Fort Authority
for Hong Kong.
14. The third possibility, namely that Britain should cede the sovereignty of Hong Kong to China, retaining a special position under a lease or other arrangement, would have the advantage of enabling British administration of the island to continue, while affording a valuable concession to the Chinese nationalist point of view. But the substitution of a lease for a fixed period would make the handing over of the island to the Chinese more difficult to rescat when the term of the lease had expired.
15. To cede Hong Kong to China outright would clearly raise very serious issues. It may well be urged that such a step should not in any case be considered until at least:
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