CO537-2187 — Page 112

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Note for discussion with Sir Mark Young

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1.

THE FUTURE OF HONG KONG

A joint Foreign Office and Colonial Office memorandum was considered last December by the F.E.(0) Committee. Mr. HacDougall was present at the meeting. The Committee considered that the paper should go further in the direction of a definite conclusion in favour of the retention of Hong Kong. A revised paper was accordingly prepared by the Colonial Office recommending

(a)

2.

(b)

(c)

that a reassuring statement concerning our intention to remain in Hong Kong should be made at the earliest convenient opportunity:

that if the Chinese seek the discussions contemplated in 1943 we should make it a condition, prior to the opening of the discussions, that they should be confined to the leased territoryee, and should also try to get the Chinese to agree to recognise that any arrangement reached in those discussions in respect of the leased territory should be regarded as the final settlement of the "Hong Kong question":

on this basis we should be prepared, if necessary and as a maximum, to agree to the surrender of the lease of the New Territories on the conditions set out in the appendix, which should, however, be regarded as essential.

The memorandum was intended for submission to the Cabinet. The Foreign Office took the line, however, that the international aspect had changed since the recommendation of the F.E. (0) Committee, as the result of the apparent reversal of United States policy towards China. The deterioration in the economic and financial position of China itself was also, in the Foreign Office view, another factor to be taken into account. They felt that the possibility of our being confronted suddenly with a demand for the return of Hong Kong to China had considerably decreased, and that in these circumstances it was not necessary to proceed with the consideration of this particular problem at present. The Colonial Office took the line that it was still very important, from our point of view, that this matter should receive Ministerial consideration, because of the need for a reassuring public

Shortly before his departure for Moscow, however, Mir. Bevin wrote to the Secretary of State, saying that he would prefer to wait until he had had a talk with General Marshall before considering a possible reference to the Cabinet for a decision. In that lotter Mr. Bevin referred to the grave deterioration in the situation in China, which he thought would cause a statement about Hong Kong to seem gratuitously provocative to the Chinese at a time when they are in no position to do anything about it.

13.