CO537-5000 — Page 43

Lo vetolei 1940

TOP SECRET

Annex I to JIC(FE) (49)41(Final)

3

officials in Shanghai have denied any intention of using force against Hon Kong. It should be noted that:

12.

(a) several of the documents in question may be out of date;

(b)

(c)

the documents appear to represent the opinions of the South China Bureau, and not the decisions of the C.E.C.;

the Communist official who disclaimed any intention on the part of the Communists of attacking Hong Kong admitted that the Communists intended to take over Macao and, in reiecting the idea of an attack on Hong Kong, referred to the weapon of economic blockade which the Communists possessed for use against the Colony.

Nevertheless in the light of the above and other evidence (see paragraph 6), and though adhering to the view that the return of Hong Kong to China is certainly one of the ultimate aims of the Chinese Communists, we consider that it is not one of their immediate objectives. In any case the timely reinforcement of the garrison is likely to have impressed upon the Chinese Communists that the chances of securing the early return of the Colony are very slender.

13.

It seems likely that the Communist organisation within the Colony is being expanded and developed so that pressure may be applied to his Majesty's Government in the course of any negotiations that may be begun regarding the Colony's future. Should such negotiations fail or be refused the C.C.P. will have to consider whether the material advantages which a British Hong Kong can offer outwoigh any advantage which might continue to be available to them if Hong Kong were under Chinese administration. Their success or failure in other ma or cities are likely to influence this decision.

14.

In any case the Chinese Communists are likely to attempt first to secure the return of Hong Kong without recourse to armed aggression. The Soviet Union is moreover likely to attempt to restrain the Chinese Communists from embarking on agreed open hostilities and thus courting a trial of strength with the United Nations, since it will wish them to inherit China's permanent seat on the Security Council and so increase the Communist representation there. In addition the Chinese Communists will

probably be reluctant to prejudice their prospects of international recognition and they would not wish to engage in battle with balanced forces trained to Western standards especially when they have not yet solved their internal economic problems and ensured their internal security.

THREATS DURING THE PRESENT PERIOD WHEN COMMUNIST INTENTIONS TOWARDS HONG KONG HAVE NOT YET BEEN REVEALED

15.

During this period the threats which the Chinese Communists could impose on the Colony are a campaign of internal agitation, a deployment of Communist regular forces on the border and an economic blockade. The deployment of their forces on the border would incidentally assist Soviet strategic aims by tying down British forces in the Far East.

Deployment of Communist Forces

16.

It is unlikely that Canton will be captured by the Chinese Communist Army (CCA) before the beginning of November. about 2,000 men (a regimental group) may be sent to the borders of the

A small force of

TOP SECRET