process is now discernable and the following points are worthy of n-te as indicative of what is ahead:
(1)
General Pan's Mission and hit attitude towards surrendered Japanese equipment and his request for loans of money. He appears to be moving into Hong Kong on a grand scale.
(2) Central Government nd Communists Forces operating
beyond or in the New Territories. These problems show how easy it is for Hong Kong to become involved in China's domestic difficulties and if either side lome s Hong Kong is likely to get the blame.
(3)
Infiltration of Chinese officials to Hong Kong, Chinese Ministry of Information, and many more.
t
All these questions need skilled handling and that skill can only be found in men who know China as well as they know Hong Kong. urge therefore:
(1)
I
That the office of the Secretary for Chinese Affairs should make itself conversant with the present situation in China so as to be in a position to advise the Govern- ment on Chinese problems. The Services also:may require guidance on their political relations with Central Government and Communist Forces.
(2) That it is essential that immediate and permanent contact
be made with H.M. Ambassador in Chungking and in this connection it is worth considering that a Foreign Office Official should be appointed to serve in the Office of the Secretary as an International link.
There
(a) I believe that the Colonial Office and Brigadier MacDougall are in agreement with the General principles I have expressed. is however some, difficulty in reaching a decision as the present
8.C.A." has been in internment by the Japanese. I consider, however, that priority should be given both to filling the office of Secretary as soon as possible and of establishing a permanent link with the Embassy in China. The importance of ensuring that there is no false step in Hong Kong's delicate relations with China and of watching world opinion is as great as any of the day to day problems of rehabilitation of life of the Colony.
In conclusion, my recommendations are that:
(1) More attention be paid to "external" affairs by which I mean Hong Kong's relations both with China and with other countries.
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(2) In future there should be a Secretariat for Chinese and
External Affairs and that within this organisation there should be an expert on modern China with the closest liaison with H.M. Ambassador in China. This should be either the Secretary himself or a new appointment.
(3) A decision be reached in the very near future to appoint
a new Secretary and that the functions of his office be recognised as including (1) and (2) above. This is necessary because of the increasing contacts of Hong Kong with Chinese and American Forces and the delicate position in which Hong Kong finds herself internationally.
BONG KONG
241
-- 1045.