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SECRET

ANNEX

Senghor, voleva

EXTRACT FROM A MEMORANDUM (S.A.C. (49) 5) ON HONG KONG BY THE SECRETARY OF STATE

FOR THE COLONIES.

X

X

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10.

Timing of security measures

In a recent despatch the Governor has asked for guidance as to the extent to which the historic role of Hong Kong as an imperial trading base should now be subordinated to the requirements of preparations for defence and to the exigencies of "cold war". He has expressed the view that, in the very special circumstances in which the trade of Hong Kong is conducted, immigration control, registration of the population, compulsory military service and many of the elementary security measures which are in force in most states today would, to all intents and purposes, "kill our trade in order to make the defence of its corpse more effective". The Governor has recommended that the local Government should continue to take all possible measures of defence and security, providedthat they do not jeopardise the primary function of the Colony as an imperial trading base. I do not

see that we can do other than to endorse the Governor's recommendation, with, however, the proviso that he should maintain the most intimate and constant contact and consultation with the military authorities in these matters and that, if he feels that it would be inexpedient to take any step which they may consider to be vital for the defence of the Colony, he should refer the matter to me for decision in consultation with my colleagues.

11.

Communist Activities

Future policy towards Communists in Hong Kong requires very careful consideration. It may be argued that the existing policy is shortsighted, in that by allowing Communists to establish themselves and to increase their permeation of the trades unions they will be more easily able to foment disturbances as and when it suits them to do so. Hong Kong, it has been suggested, is buying a short period of tranquility at the price of much eventual trouble.

These considerations have been put to the Governor of

Hong Kong, who has replied: -

(a)

(b)

That against the background which has been

described above, the existing policy of holding a balance between the various Chinese

political parties in the Colony must be maintained. A vigilant watch is being kept on Communist activities; they will be curbed whenever they overstep the mark.

That a policy of drastic suppression of

Communist activities would certainly lead to trouble and would be tantamount to a

declaration of war provoking counter-

measures, general strikes and even terrorism there, and would hasten the development of

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