CO537-3701 — Page 2

8

1. Exceract from appreciation by mr Wallace

Copy of minutes by had histowel and

Hr Seel

54435/48.

Sever (1)

I agree with Mr. Wallace's appreciation, as far as it goes,

But,

after meeting the leaders of the C.D.L., the K.M.T.R.C., and the C.P. in Hong Kong, I concluded that although the former wished to co-operate with the latter, the converse was not true. The Communists know they are winning, and they rely on the defection of K.M.T. generals, not on the support of an impotent and insignificant political opposition.

I hope attention will be paid to paragraph 11 of Mr. Wallace's Report. The administration must face up to the control of immigration by the issue of identity cards.

Mr. Wallace

(init.) L.

8/4.

Have

Pl. see Lord Listowel's minute. we any information to show whether Hong Kong are contemplating enforcing identity cards in the event of wholesale influx of refugees? It would be a stupendous problem.

(init.) G.S.

G.5/4.

9/4.

2 lextract from minute by Mr. Mayle

(Drip on 54064/48).