CO537-1656 — Page 10

ノカン

5.

It is evident from this that the question of terminating the agreement of 1898 for the lease of the "New Territories" referred to in paragraph 1(c) above will be raised in the near future by the Chinese Government.

6. At no time have the Chinese Government raised the question of the status of liong Kong as a whole, but it is generally recognised that their ultimate object is the 19 recovery" of the whole colony ceded to Great Britain in 1842 and 1860. The Generalissimo, in his book "China's Destiny", published in 1943, made it clear that Hong Kong is regarded as properly belonging to China and its recovery is merely being postponed.

7. In support of their claim, the Chinese can point to the fact that Hong Kong is geographically and economically a part of China end that its population is overwhelmingly Chinese. They would probably also claim that it was wrested from them under the "imequal treaties" and that its return would erase the last of China's humiliations suffered under these treaties.

:

8.

9.

There are four possibilities:-

(a) That Britain should not yield on any point to

Chinese claims.

(b) That Britain should agree on certain conditions

to the retrocession of the New Territories to China.

(c) That Britain should cede the sovereignty of

Hong Kong to China, retaining a special position under a lease or other arrangement.

(a)

That Britain should agree to the return of all the territories to China.

The principal arguments against making any concessions are as follows:-

(a) The problem of Hong Kong must be considered

against the background of China's policy of nationalism and racial expansion throughout Asia. It is arguable that any concession in Hong Kong, far from "appeasing" Chinese imperialism, would be regarded as a sign of weakness and would be followed in due course by renewed agitation for the retrocession of the whole of Hong Kong, and that a concession in regard to Hong Kong could hardly fail to stimulate agitation in regard to Chinese claims and ambitions in South East Asia generally, and in particular to her efforts to organise politically the Chinese communities in such countries as Malaya. No matter what internal weakness and division may prevail in China it must be expected that the Chinese will neglect no means to further their aims of "peaceful penetration" in these territories.

- 2

Page 10Page 11