CO537-4999 — Page 89

2 June 1949

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THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT

Likely Communist Policy towards Hong Kong

UNDER SECTION 3(4) OF THE, PUBLIC (48)21 (Final)

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Hitherto Hong Kong as a British Cclcny has been cf value tc

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the Chinese Communist Party (C.C.P.), since the latter's underground organisation has been able to use it as a base for directing activities in Scuth China and South East Asia, for recruiting and training workers and as a propaganda and liaison centre. The party has therefore been careful not to take any action which might lead the Hong Kong Govern- ment to take repressive action against it. With the advent of the Chinese Communists to power in Scuth China, however, Hong Kong will possess ncne of these advantages except that cf a clandestine liaison centre with other Communist parties and sympathetic groups. In this respect its utility would be reduced in the event of a direct, clash with the Hong Kong Government, but would not be eliminated.

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7.

The Cclcny will, however, cffer the C.C.P. what it has hither- tc cffered the K.M.T. Government a trade cutlet for Scuth China with a stable currency and mercantile facilities. Although the advantages which it can cffer the C.C.P. in any schemes of trade with the cutside world are very great, the Party may well prefer to reduce trade cr indeed all contact with the Western Allies to a minimum, regardless of the hardship thus imposed on the Chinese people. Mcrecver the C.C.P. may hope that Hong Kong would continue to operate satisfactcrily as an entrepct after being restored to Chinese sovereignty.

8.

In any case

and the

public pronouncements' cr Chinese Communist leaders, indicate that the integration of Chinese Communist foreign policy with that of the U.S.S.R. is likely to be close and effective. The C.C.P. has already subscribed to the Cominform's interpretation of the post-war international situat- icn which visualises the world divided into two camps, and this will encourage them to launch a campaign against what they term "the. imperia- list domination" of China. The following passage is from a document captured in a C.C.P. headquarters which indubitably summarises the intentions and plans of the C.C.P. as approved by the Central Executive Committee of the Party. "The Chinese revolution is of an anti-imperialist nature hence the natural cpposition of the imperialists. We must eradi- cate thoroughly the imperialist dcmination of China but must do it metho- dically. In the first place we must secure political domination, then dc cur utmost to reduce the imperialists' demination over cur economy and culture, and finally eradicate their influence". The following ex- tract is from a document submitted to the Peiping Peace Conference by the Communist delegates:- "All those agreements found to be detrimental tc the interests cf China and her people (nctably those amounting to betrayal of national rights) will be abrogated, revised cr made the sub- ject of new negotiations according to the merits of each case".

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We conclude that following the seizure and consclidation of Scuth China, the C.C.P. is likely to initiate a campaign for the return cf Hong Kong to China at an early date. This campaign is likely to cpen with a demand for negotiations regarding the Cclony's future. Should H.M. Government refuse to comply, the C.C.P's crganisation within Hong Kong will be built up to a point at which it can initiate large- scale subversive activities through its centrel of the Trades Unicns and cther standard Communist techniques. Since the Communist crganisation in Hong Kong has hitherto directed its activities against the K.M.T. in Scuth China a period of re-organisation will be necessary before its effcrts can be diverted against the Cclcnial Government. In this connect- icn unconfirmed reports have already been received that the C.C.P.

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