CO537-1658 — Page 5

MR. LLOYD.

I think you may be interested to see the attached letter from Mrs. Selwyn-Clarke, and the extracts from her correspondents in Hong Kong.

2.

I should perhaps explain that Mrs. Selwyn- Clarke is an active advocate of the idea that no consideration should be given to the return of the New Territories or any part of Hong Kong to the Chinese for some considerable time. Her reason, I judge, is not so much her belief in the value of Hong Kong to us, or the value of a British administration to the people of Hong Kong, as her appreciation of the Colony's use as a haven for political leaders of the Chinese Communist party and other anti- Kuomintang elements. I think she regards it as her mission to persuade the Labour Party that they should support the Communists rather than the K.M.T. in China, and that an essential factor in this support is the retention of Hong Kong.

3.

Mrs. Selwyn-Clarke expresses the view that a fimm line must be taken with K.M. T. activities in Hong Kong. Most Hong Kong officials that I have spoken to agree with her in thinking that there are likely to be, in the future, increasing numbers of incidents organised by the K.M.T., and that it is essential that a firm policy should be authorised in this matter. I have no doubt that allowing for the fact that the K.M. T. is the official party of the Government of China, this is also the view held by Sir Mark Young.

4. Mr. MacDougall mentioned to me that Mr.S.K.. Yee who is referred to in two or three of the extracts, has now been released by the Chinese authorities, and is back in Hong Kong.

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29. 7. 46.

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29/7/46.

4. China Campaign

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4. SP. H. from you. Hong Kong

As foreshadowed at X in the letter at 7

19/6/76.

Lord Lindsay has put down a Question for written answer about the arrest of Mr. S.K. Yee. (See P.Q. file). No doubt his question is based on the material in the enclosure to 7. A copy of the reply which is made should be registered on this file and then be put by.

Aclect

31.7.46

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