Secretariat:
L.M. 263/48s
SAVINGRAM
76
To the Secretary of State for the Colonies. (R. British Embassy, Nanking
From the Governor, Hong Kong.
Date
July, 1948
No. 53 SECRET
(NO. 30.
Consulate General, Canton,
(No. 48.
Comm. General, Singapore,
(No. 192.
Following is a political report for
Hong Kong for the two weeks ending June 28th. 1948.
Coinciding with further catastrophic
deterioration in the currency situation in China, Hong Kong is again being held responsible for China's ills. A United Press report dated Nanking June 19th quoted an "unimpeachable Government source" as stating that the Hong Kong Government is not abiding by the recent anti-smuggling pact, and that "a change in the status of Hong Kong might be demanded" if the flight of Chinese capital did not cease. Although this was denied by Central News a few days later Mayor K. C. Wu of Shanghai was quoted as recommending a blockade against Hong Kong, and this was followed by a fantastic report from Nanking alleging that well over 60 billion Hong Kong dollars worth of Chinese capital was lying idle in Hong Kong, and purporting to give facts regarding the number of deposits of more than H.K.$1,000,000.- These flights of fancy are not taken seriously, but the not altogether unsuccessful effort to saddle Hong Kong with responsibility for China's present condition shows a remarkable confusion between cause and effect and reflects the bewildered desperation of the Nanking regime.
2.
The movement to protest against the United States fostering the revival of Japanese Industry, which began among manufacturing groups affected by the competition of Japanese goods, has spread to the labour unions, in particular to the increasingly left-wing dominated Hong Kong Labour Federation. The depression in the local spinning and weaving industries is giving impetus to the movement. It is noteworthy that considerable attention is being devoted to it by the fellow- travelling left-wing newspaper "Hwa Shiang Pao", which is always ready to encourage anti-American feeling.
3.
Events in Malaya are being closely followed. The local Communists are keeping quiet on the subject, but the Headquarters in Hong Kong of the China Dem- ocratic League, alleging that 21 members of the China Democratic League have been arrested in Malaya, and offices of the China Democratic League there raided, have released a statement, published on June 26th. in the Hwa Shiang rao, stating that the League is a party standing outside the K.. T. and the Chinese Communist Party. The statement blames the action taken against the League on the mischievous accusa- tions of K..T. representatives abroad, and declares that the China Democratic League's policy is one of non-inter-
Page 50Page 51