CO537-2192 — Page 35

I agree with the view that no substantial advantage

would be gained by an attempt to secure the subordination"

-¿

of the local Head of the Kuomintang in Hong Kong to the

diplomatic representative of the Chinese Government in

the Colony. As regards the longer term objective

proposed by Sir Mark Young, however, I am advised that,

whatever may be the theoretical position in regard to

the termination of one-party government in China, in fact

and for all practical purposes the Kuomintang is still the

Government party; and consequently that any such drastic

action as their expulsion from Hong Kong would almost

certainly lead to retaliatory measures against Hong Kong

by the Chinese Government. There is also the danger

that such action might have repercussions elsewhere.

3. At the same time I am advised that, should there

be a deterioration in the internal situation in China

leading to a serious weakening of the authority of the

Nanking Government, or event to its complete disintegration,

then it is quite possible that in these circumstances the

expulsion of the Kuomintang from Hong Kong could be effected

without that serious risk of retaliation which would be

incurred if such drastic action were to be taken whilst

the Kuomintang enjoys de facto its present privileged

status in China.

4. I fully appreciate the extreme embarrassment

which the activities of the Kuomintang have caused, and

are continuing to create, for the Hong Kong Government,

and the dangers which those activities represent to good

government in the Colony and I greatly regret that the

attention of the Hong Kong Administration should be dis-

tracted in this way. Nevertheless, I have come to the

conclusion that, for the present and until it is possible

to see more clearly how the Chinese internal situation is

likely to develop, the Hong Kong Government should confine

itself to surveillance of the activities of the Kuomintang

and

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