CO537-2187 — Page 210

which have been made within recent years.

A summary of such assurances is attached as

Annex I. It is assumed that, in view of these

assurances and the reasons set out in the

preceding paragraphs for retaining the ceded

part of Hong Kong, there is no intention of giving

up the Colony, and that any claim for its

retrocession will be resisted.

10. In this connection, it has been

represented to us very strongly that there are

still doubts in Hong Kong business circles and

in the minds of the Chinese inhabitants of

Hong Kong as to whether we intend to remain there.

Consequently, there is a reluctance to invest the

capital required for the rehabilitation and

development of the Colony, coupled with misgivings

and apprehensions on the part of the Chinese

population, which are aggravated by the influence

of the Kuomintang in the Colony. This state of

affairs is seriously prejudicing the

rehabilitation and development of the Colony.

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 the return of Hong Kong, we

feel 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 that a reassuring statement

concerning Hong Kong should be made at the

earliest possible opportunity.

11.

Proceeding from the assumption that there

is no intention to return the ceded part of

Hong Kong

Page 210Page 211