CO537-2187 — Page 141

(See R.9. 74

on 54145146)

as to the)

futive

preceding paragraphs for retaining the ceded part

J

of Hong Kong, there is no intention of giving up......

that part of the Colony, and that any claim for e

retrocession will be resisted..

12. In this connection, it has been represented

to me very forcibly that there are strong doubts in

Hong Kong business circles and among the Chinese m

inhabitants of the Colony, who form about 98% of the

population, as to whether we intend to remain there.

Consequently, there is a reluctance to invest .the

capital which is required for the proper co

A rehabilitation and development of the Colony, and,

in addition, on the part of the Chinese inhabitants

generally, misgivings and apprehensions, which,

needless to say, are fully exploited by the local

branch of the Kuomintang, which succeeded in

establishing itself formally on the liberation of the

Jo territory. It may, therefore, fairly be said that

this uncertainty is not only arresting.

rehabilitation and development but is also having

a very serious effect on the local political

situation.

13.

Although there is clearly some danger that

a further pronouncement on behalf of H.M.G. on the

subject of Hong Kong might provoke a formal approach

from the Chinese for the discussions contemplated in

*

1943, to be held now, and possibly also a claim for

) mulus the return of Hong Kong, I feel very strongly that

the existing uncertainty is too harmful to the

Colony and its inhabitants to allow it to continue

indefinitely, and that the risk involved should be

taken and a reassuring statement concerning

Hong Kong made at the earliest opportunity.

14.

Proceeding from the assumption that there

is no intention to return the ceded part of Hong Kong

ito China, we consider that it is of the utmost

importance