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which followed the Kowloon City incident and which resulted in the deplorable burning of the British Consulate-General and other British properties in Canton, are also thought to have been the work of Kuomintang extremists. This would have been the psychological moment to clamp down on the Kuomintang in Hong Kong, as part of the general British re-action to the Canton outrage. in as out out in ng telegram to you. No. 67 of 17th January, 1948. The opportunity passed, and in your telegram No. 147 of 31st January, 1948, in reply, you adduced reasons, which I accepted, for not pressing the matter. I realise that the moment is inopportune for such forthright action against the Kuomintang, and I am aware of the unfortunate result which such action might have on Sino-British relations.

(31) a 54145/16/481 (101)-

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6.

The policy I have consistently followed since my arrival in the Colony has been to refrain studiously from doing anything which will give the Kuomintang "face" in the eyes of the Chinese population. The Kuomintang in Hong Kong has no official status, and its members are not invited to any official functions. On the occasion of my arrival in Hong Kong, Mr. Li Ta Chao, Director of the Hong Kong and Macao Kuomintang Headquarters, sent me an official letter of welcome, promising cooperation, and making a subtle reference to the cooperation of Admiral Chan Chak "then Director of our office" during the Japanese attack on Hong Kong in 1941. I caused a simple and polite reply to be sent to this letter, and later I declined to receive Mr. Li Ta Chao personally, when he asked for an interview, on the grounds of pressure of work. Opportunity has also been taken on two occasions to administer an official rebuke to Mr. Li Ta Chao for the meddling activities of himself and his subordinates. The first occasion was when the Kuomintang Office in Hong Kong had been concerning itself with the formation of a General Labour Union. It was pointed out to Mr. Li on that occasion that the Hong Kong Government had its own machinery for dealing with labour and other troubles and it was suggested that interference in these matters from the Kuomintang was not welcome. On another occasion Mr. Li was taken to task in connection with the activities of his office with regard to the Hong Kong War Memorial Fund. A meeting had been called unnecessarily and gratuituously at the Kuomintang Office at which representatives of 32 public bodies were publicly encouraged by a Kuomintang official to lend their support to the Fund. The Secretary for Chinese Affairs send for Mr. Li and pointed out to him that the fund was being managed by a representative Committee appointed with statutory powers to collect funds and administer them for the purpose laid down by Ordinance, that they had already issued an appeal to the public setting out the purposes of the Fund and that this Government viewed with displeasure efforts by unauthorised persons to organise the collection of money by local bodies.

7.

In order to keep the Kuomintang at a suitable distance, this Government deals always with Chinese officialdom through the office of Mr. T.W. Kwok, the Special Commissioner for Foreign Affairs for Kwangtung and Kwangsi. Mr, Kwok for his part appears to realize that this Government has no wish to deal officially with the Kuomintang, and he has successfully acted as a buffer.

8.

In political matters the Kuomintang in Hong Kong has concentrated on an anti-Communist line. Its chief aim has been to present the menace of Communism in such a way as to rally British and American feeling in support of the Nanking regime. Recently, as a result of the strengthening of the official attitude in the United Kingdom towards Communism, the Kuomintang has pressed the propaganda line that Communists in Hong Kong should be put under restraint. The anti-British outburst at the time of the Kowloon Ci ty incident was happily only an isolated phenomenon; generally the Kuomintang has refrained from anything which may be interpreted as a deliberate anti-

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