Sec. fil No. 1170/47°
SAVINGRAM
34
To the Secretary of State for the Colonies. R. British Consul General,
CANTON (No. 57.
From the Governor, Hong Kong.
Date at September 1948
No. 69
SECRET
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British Embassy,
NANKING(NO. 40.
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Comm. General,
SINGAPORE (No. 230,)
G.0.C., HONG KONG.
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The following is a political report for Hong Kong for the two weeks ending 23rd August 1948.
The Chinese Government have made informal requests through the Chinese Special Commissioner for Foreign Affairs in Hong Kong, that this Government should prevent General Feng Yu-Hsiang landing in the Colony should he arrive from the United States, and also that any attempt by anti-Chiang Kai-Shek elements to hold a conference in Hong Kong to discuss the establishment of a Chinese Coalition Government should be prohibited. General Fong, however, has apparently gone to Europe, and it may be that he is on his way to Harbin. As regards the suggested conference, to be called a Political Consulta- tive Council, anti-K.M.T. parties in Hong Kong do not favour Hong Kong as the site for the meeting, and Marshal Li Chai-sum, has been fairly reticent. Rumours have circulated that he would proceed to Communist-controlled
for the proposed conference but it is believed that he would be reluctant to commit himself to this extent, as such a course would only lead to a completely Communist dominated coalition Government.
2.
Introduction of the new currency in China has been received with a certain amount of scepticism by foreign merchants in Hong Kong regarding its success, but the Chinese have welcomed it as affording at least a chance of pulling China out of the mire. It seems possible that Hong Kong will again be faced with demands by the Chinese Government to take still more measures to suppress blackmarket speculations in foreign currency in order not to weaken the new Chinese currency.
3.
There are also indications that Dr. T. V. Soong, Governor of Kwangtung, who has returned from a visit to Nanking, may take more effective steps on the Chinese side to control smuggling into China. A special organ- ization which will embrace all military and preventive forces, may be set up. Hong Kong will presumably be asked to join in. Hitherto the main weakness in co- operation with the Chinese in smuggling prevention has been that preventive measures have only been effective on the Hong Kong side.
4.
Dr. T. V. Soong's anti-bandit drive just across the Hong Kong border, which has been in operation for over a month, now appears to have had some success. The bulk of the "bandit-Communists", unwilling to engage the re-inforced Nationalist forces, appear to have moved further north and away from the immediate border area. The morale of the Government forces is however reported to be low.
5.
The case of a Hong Kong Police Constable detained by the Chinese authorities on August 7th for crossing the
frontier/