as a free port has no doubt been fully considered by the British Government; what is still uncertain is the Chinese reaction. It would have certain obvious advantages, and might even be preferred by many Chinese on economic grounds, but the political objections, as Brigadier Macdougall pointed out, are considerable.

41

It is hardly appropriate for me to recommend any policy to the New Zealand Government in what is primarily a concern of the Colonial Office. But any question likely to prejudice friendly relations between Britain and China is also a concern of the United Nations; in this sense, the future of Hong Kong may become a matter of importance to us at very short notice. It is sometimes a habit of British Governments to postpone the making of decisions until the last possible moment; and the decisions thus made, under the pressure of events whose shadow has long been visible, are not always the happiest or wisest.

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Decisions in regard to India have been of this order in the past; though it may be said that the problem of India is so vast and complicated that clear-cut decisions are peculiarly difficult to reach. Hong Kong is not a problem of this complexity; and there has been ample time to pass it under full review. is my own conviction that New Zealand's interest in this matter, which is the general interest of world peace, would best be served by a speedy announcement of Britain's intention to return Hong Kong to Chinese sovereignty; and the working out of practical policies to this effect. The time-plan, at this moment, is of considerably less importance than the announcement of intentions. Any such announcement should be accompanied by a terminal date, even if this should be as far advanced as 1997 (when the New Territories lease falls due).

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