CO537-(1262-1649) — Page 904

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National Archives' leaflet

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restrictions. Further information is given in the enclosed Terms and Conditions of supply of National Archives' leaflet. Please note that this copy is supplied subject to the National Archives' terms and conditions and that your use of it may be subject to copyright

14

the Hong Kong Chinese, if

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Si Mark Young's memorandum enclosed with his letter at (34) giving his comments on the Foreign Oriice note on the future of Hong Kong only purporta to be a preliminary view as he had not yet discussed it with Sir H. Seymour. I understand, however, from Mr. MacDougall that Sir Mark Young's discussion with the Ambassador was brief and it is unlikely to have led to any substantial modifica tion of the views expressed (in 33). Sir H. Seymour 18 on his way home and due to arrive here in the fairly near future and presumably the Foreign Office may then ask for his views on their memorandum (29). They may well also propose a discussion with our Secretary of State as foreshadowed in Mr. Bevin's letter to Mr. Hall ). It seems desirable therefore to consider Sir Mark Young's memorandum now.

His ohter conclusion is that there is not a cose for H.M.G. to take the iniative by offering to discuss with the Chinese Government the surrender of the lesse

or the New Territories. His reasons are:-

(a) that none of the possible arrangements that

have been suggested for a settlement would be acceptable both to us and to the Chinese and

(b) that the Chinese Government is not likely

to raise this matter formally at present since they have so many other preoccupations.

Sir Mark Young does not mention, and therefore he presumably accepts the argument (the validity of which must indeed be generally recognized) that should the Chinese "go all out" for the return or Hong Kong (wholly or in part) we could not hope successfully to resist. They hold all the trump cards but it seems probable that they will in fact be engaged in other games for some time.

The Governor expresses the view that the further the local population or Hong Kong proceed along the road to self-government, the less will be their peel inclination to be absorbed into China. There, therefore, seems every reason to take advantage or the resent preoccupation of the Chinese to proceed with the development of self-governing institution, in Hong Kong as envisaged in the speech made by

Sir Mark Young on the resumption or Civil Government.

This argument reinforces the Governor's view, which I think we should accept, that we should wait rather than ourselves take the iniative in offering to open discussions with the Chinese.

out.

Nevertheless the possibility that the Chinese may, at any time, raise this issue cannot be ruled For example sec(12) it would be of value therefore to consider what would be the concession least open to objection and most productive of good relations which we could make if circumstances demanded it. A preliminary to such consideration is the fundamental question 01 whether the retention of even the island of Hong Kong is as necessary in the interests of British trade in China as has been represented by the China Association. The Foreign Office in paragraph 38 of their memorandum (2) appear to suggest that provided we are sufficiently 'firmly established in Hong Kong

/economically