CO537-4847 — Page 52

SECRET.

XVI. New Territories (contined).

whether neutral or otherwise shall retain the right to use those waters."

(b) Communist propaganda in the New Territories may well concentrate on the predom- inately rural population, and attempt to stir up among them demands for agricultural reforms, on the lines of Communist agrarian reform in China. This may include agitation against landlords, and representations of the benefits enjoyed by Chinese peasants under Communist rule.

(c) Communist propaganda may

concentrate on the behav- iour of the British Military forces in the New Territories, and seek to arcuse among the inhabi- tants a sense of grievance at their presence. Use of land for military purposes in particular will be exploited, especially if agricultural land is involved.

End

Office and Foreign Office legal advisers is that such right is limited to inno- cent passage and s helter against bad weather.

Such propaganda will have to bo answered factually, and the position of peasants in the New Territories will have to be contrasted with that of peasants in China, particularly in regard to taz- tion. At the same time every effort should be made by the Hong Kong authori- ties to improve welfare and edy cation opportunities for New Territories' villagers in order to give less excuse for Communist propaganda claiming greator benefits for peasants in China.

It will be most necessary to avoid requisitioning for military use any more agricultural land than is absoluto- ly needed. The Chinese peasant is deeply rooted to the soil and the best way to antagonise him is to remove him. The worst thing possible would be large scale eviction of villagers on security grounds, and this should not be done except as a last resort if hostilities appear certain. Even in this case it might be preferable to leave villagers where they are rather than to risk hav- ing them as a nuisance in the rear. In all cases where land is unavoidably needed for needed for military purposes the principle must be maintained that the villagers will be fully compensated and/or re-settled.