CO537-4849 — Page 31

THIS IS A COPY

THE ORIGINAL HAS BEEN RETAINED

IN THE DEPARTMENT UNDER SECTION #Q OF THE PUBLIC RECORDS ACT 1951⁄2

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at the end of November by a larger party of prominent "democrats", Finally, about December 27th the most prominent of all Hong Kong's political refugees, Marshal Li Chai-sum, secretly loft the Colony for the North. The Marshal is believed to have left on board a Soviet steamer on December the 27th, but some Chinese sources persist in maintaining that he departed on a British steamer. This possibility is not ruled out as two British registered ships cleared Hong Kong for North Korea about that time. The Marshal left a letter for me which I received after his departure thanking me for the consideration shown to me during his two years here, and stating that he was called North on matters of state.

6.

One new political refugee of importance arrived in December. This was General Lung Yun, ex-Governor of Yunnan, who had clandestinely left Nonking. Lung Yun saw Marshal Li Chai-sum after his arrival, and was visited by Dr. T.V. Soong on December 18th. Dr. Soong tried to persuade him not to throw in his lot with the Communists. Lung Yun's future intentions are not known.

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The Chinese Communists have continued to

Their

refrain from openly subversive activity in the Colony, but it is known that they have been active in negotiations with anti-K.M.T. elements in the Colony, and in generally building up their own strength. They have been skilful in turning the anti-Chiang Kai-shek feeling of many genuine Chinese liberals to their own advantage. penetration of the China Democratic League appears to have reached an advanced stage, The growing prestige which the Communist successes in the Civil war have given them is reflected in the increased attention given to the bulletins issued by the New China News Agency. Recently a number of pro-K.M.T. or neutral Chinese newspapers have begun to subscribe.

8.

In view of the many indications of growing Communist propaganda and political indoctrination in schools, an amendment was recently passed by the Legislative Council to the Education Ordinance, 1913, giving the Government greater powers to prevent political agitation and teaching being carried on in schools under the guise of education. Action against certain schools known as hot-beds of such agitation is being considered. One particular school, catering for students of University age, is known

to have engaged in

the active recruiting of young people to be used as guerillas in China. The students are mainly Overseas Chinese from South East Asia. It appears that on their return to their countries in South East Asia they pre- sumably act as agents for the propagation of Communist ideas. The most striking confirmation of the use of Hong Kong as a Communist centre of considerable impor- tance was obtained during a Police raid early in December, at a time when a number of opium dens were also being raided. Documents were found, the authenticity of which seems beyond doubt, tending to show that the Chinese Communist Government, in their attitude towards foreign countries, can be expected to be have along the most orthodox Marxist-Leninist lines. There is also evidence to show that non-Communist "Democratic" Chinese parties will be allowed to be represented in a Coalition Government, but will have no more liberty of action, and possibly ever less, than the constituent parties in Communist-dominated Governments in the Soviet Eastern Europe.

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The problems which a Communist victory in China may entail in Hong Kong are not under-estimated.