CO537-4847 — Page 38

SECRE T.

IV. KOWLOON-CANTON RAILWAY.

Likely Communist actions

and Policies.

(a) It is uncertain whether

Communist authorities will wish to establish through trains from Cauton to Kowloon.

(b) Communists may detain

British Section rolling stock in Chinese Territory.

(c) The Communists may

institute rigid frontier control, resulting in excessive delays to through trains.

(a) Communist train crews

may adopt inflamma- tory and arrogant attitude.

Action by Hong Kong.

Generally speaking Hong Kong's policy should be to normalise the situation and get through trains running as before. The General Manager of the British Section should seek to establish relations on a working level with the Chinese Railway Administration as soon as possible after the whole stretch of railway in Chinese territory has fallen into Communist hands.

The policy of normalisation should however be modified according to the manner of the Communist capture of Canton. If, as a result of fear of Communists, there is a likelihood of a large influx of refugees into Hong Kong from Canton it would be well not to hasten the re-establishment of railway communications as this would merely aid the influx. In this case reasons should be found for delaying establishment of through trains.

The General Manager, British Sec- tion, should try, when the time comes, to have as little British Secuion rolling stock as possible on the other side. He should also arrange to hold some Chinese rolling stock in the Colony as hostages until the situation clarifies. It is understood also that G.M.R. has stored a certain amount of railway equipment (e.g. bridge building materials etc.) destined for the Chinese railways generally. This can also be used for bargaining. Unless there is no need for it for this purpose it should how- ever be handed to the Communists as soon as possible after they ask for it.

Hong Kong may have to take recipro- cal action. If immigration control is instituted it may be necessary for the British train services to run only to the frontier.

Should this occur the argument for suspending through services will be reinforced. But generally, if through services are to our advantage, we should continue to have them. It may also be desirable to continue various small ad hoc arrangements such as pas- sage of armed Chinese railway guards, if it is to our definite advantage.