Moreover,

there is a further factor which I think is worth while taking into consideration. Actions speak much louder than words. All can recall instances in which the firmest sounding declarations by a Government have been followed by early capitulation. Indeed, the very issue of a reassuring statement is some evidence of the weakness of one's position. The Chinese, whether in Hong Kong or China, are not the sort of people who will fail to appreciate that. It seems to me very possible therefore that the issue of a reassuring statement however worded might fail of its effect. On the other hand the investment of £4 million in a new airport is an argument which, the practical minded Chinese, might well carry real conviction of our own faith in the continued retention of our position in Hong Kong.

844. To The Rt. Hon Ernest Bevin

m.P.

85. Draft New Paragraph (14) of Revised Paper

Mr. Seel

file now.

7.08.2.

4.2.47.

to

4-2-47 Future of H. Kong.

I am afraid I must trouble you with this

The uncertainty about our retention of Hong Kong, which exists in business circles and among the Chinese in the Colony who comprise over 90% of the population, is seriously impeding the rehabilitation and development of the territory. The chief reason for this uncertainty is, I think, the fear that, having agreed to the abolition of extraterritoriality in China in 1943, we should not be able to withstand any demand that may be made by China for the return of Hong Kong. It is true that when the Chinese Government made a request for the rendition of the New Territories (that is that part of the Colony which we hold on a 99 years' lease, of which there are about 50 years to run) in connection with the negotiations which led up to the abolition of extraterritoriality in China, we refused to consider the request. But we did say that this was a matter which, in our opinion, should be discussed when victory was won and the Chinese Government thereupon reserved their right to raise the question later. To this extent, therefore, we are committed to discussions on the New Territories. There are thus some grounds for the uncertainty as to our tenure of the New Territories and, I think, as to our attitude towards a formal demand for the retrocession of the other part of the Colony, if the Chinese Government succeeded in securing the return of the New Territories and decided to make a further demand for the remainder of the Colony.

These are briefly the circumstances in which the Governor of Hong Kong (see at paragraph (c) in No.72) has urged that a reassuring statement should be made as soon as possible that we intend to retain Hong Kong.

This vital question has been under consideration with the Foreign Office for some time past. We agreed with them that, since other Departments besides ourselves were concerned,

the

most

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