CO537-2187 — Page 209

foreign countries in the past in respect of Gibraltar,

Cyprus, British Honduras and the Falkland Islands,

and it would scarcely be possible to attempt to meet

such renewed claims with the plea that the retrocession

of Hong Kong was a matter of political expediency.

The retrocession of Hong Kong would also seriously

affect the trade interests of this and other countries,

including China herself. Under British administration

the Colony is of great value to British, Chinese and

other trade interests in China and throughout the

Far East, as it constitutes a base providing

conditions in which business can be transacted with

reasonable security. If Hong Kong were given up to

China, there would be no such base and British and

other trade interests would be placed in the

greatest difficulties.

8. So far as concerns the defence aspect, the

present agreed policy with regard to the defence of

Hong Kong is briefly that, since the Colony cannot

be defended against attack by a major power in

occupation of the Chinese mainland, Hong Kong should

be regarded as an undefended port so far as fixed

defences are concerned, but that plans and preparations

should be made to enable the necessary mobile defences

to be introduced at short notice should we require to

use Hong Kong as an operational Naval and Air base

in the event of a war in the Bacific, during which

China was in friendly hands. The present and

future garrison of Hong Kong, augmented by reinforcements

from South East Asia, is considered strong enough to

repel small scale aggression by a hostile Chinese

war lord. There would therefore be some advantage,

from the defence point of view, in the retention of

Hong Kong.

9.

Mention should also be made of the assurances

concerning our intentions with regard to Hong Kong

which