CO537-3715 — Page 23

51.

SAVINGRAM.

To the Secretary of State for the

Colonics.

From:

Dato:

the Governor of Hong Kong.

15th

De cobor, 1948.

No:

107.

SECRET.

Kopcated to: British Embassy,

NANKING (No.67.)

}

British Consulate-Goncral

CANTON (No. 83. Comissioncr-General,

S.E.. (No.30.)

G. O. C., Hong Kong.

X

Following is a Political Report for Hong Kong for

the two wooks onding November 29th, 1948.

2.

The rapid developments in the Chinese civil war continue to ongago the attention of the Chinese in the Colony. The local pro-K.M.T. press alternates between defeatism and optimism, but the falseness of the Nationalist claims of victories are really deceiving no one, and there is a universal, but not as yet openly expressed wish that Chiang Kai-shok should resign. A number of Hong Kong Chinese newspapers have boon banned from entry into Canton for publishing adverse war news. The Left Wing press, consisting of the pro-Communist "Hwa Shiang Peo" and the slightly moro indopondont "Won Woi Pao" accompany their reports of Communist successes in the civil war by fierce attacks on United Stated policy in China. General Chennault's rumoured revival of the "Flying Tigers" to aid Chiang Kai-shek has come in for particularly strong criticism, as also the report that the new Premior, Dr. Sun Fo, conton- plates opening the Yangtse to forcig shipping.

3.

Major General Y.S. Yu of the Chinese Army Services of Supply, accompanied by an American Military Adviser, arrived in Hong Kong in the middle of October and mado unofficial enquiries about wharf, godown end railway facilities with a view to the transport through Hong Kong of several hundred thousand tons of war supplies. The visit was unofficial and exploratory, and no official approach has yet been made by the Chinese Goverment. Reports have appeared in the Chine se press that E.C.. harbour construction materials originally destined for Chinwangtao and Tangku in North China would be diverted to the new port now being built at Whampoa in the Pearl River, and that this would assist in the transportation into South China of war supplies. It is understood that the projected construction of a large modern harbour at Whampoa has been stopped through lack of funds after only a small part of the project has been completed.

•

4.

An indication of the increased optimism of the local Chinese Communists has been the decision of the Communist New China News Agency in Hong Kong, which puts out news itens broadcast from the Communist radio in North China, to issue two daily bulletins instead of one. The Communist weekly magazine "Chens Paow() ceased publication in Hone Kong on the 13th November The magazine gave two interesting reasons for its discontinuance, namely that owing to the dramatic developments in the situation in China "those who retreated from Chine two or three years ago have now to go back to their mother country" and also that "activities in Hong Kong should be so re-organised as to spare more man- power for practical activities in the South". This may fore- shadow increased Communist activity in South China.

5.

Marshal Li Chai-sum, the recognised leader of the anti-K.M.T. clements in Hong Kong, is understood to have stated that Peking would be in Communist hands shortly after the New Year, and that he hoped to attend the proposed Political Consultative Council which would be held there to discuss a Coalition Goverment for China. The Marshal has