CO537-5000 — Page 45

10 October 1949

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Annex I to

JIC (FE) (49)41(Final)

5

20.

A further serious effect of an embargo would be on the Colony's food supplies, especially rice. Though its export from China is prohibited the bulk of the rice consumed in Hong Kong is smuggled from China. Should the C.C.P. succeed in stopping this smuggling the supply would have to be made up from other sources by less palatable rice at an increased price.

INTERNAL THREAT

21.

In any case the Communist will intensify their subversive activities within the Colony, particularly in view of the irritation caused by the presence of K.M.T. elements. A loan is already being floated in Hong Kong, possibly to provide funds for such activities. The principal means to be adopted will be:

(b)

(a) widespread propaganda; the main themes being attacks on the government's administration, especially on the restrictions to civil liberties, the loyalty of all Chinese to China and the return of the Colony to China; instructions to Communist elements in the Colony to stir up unrest and bring about strikes, especially in essential services and in the distribution of supplies; efforts to suborn the loyalty of Locally Enlisted Personel and civilian employees of the services. with family connections on the mainland would be particularly susceptible.

(c)

Those

(a)

isolated atempts at sabotage and assassination;

(e)

encouragement of banditry; and

22.

(f) infiltration of agitators and saboteurs by land and sea.

It is a common Communist technique to seek to undermine the police force of a country that is under pressure by subversive means, and their task in Hong Kong will be aided by the facts that the Police Force is a post-war creation composed of four different elements, that over 50% of its Chinese members are not British subjects and wilí thus be peculiarly susceptible to intimidation, and that many of the lower ranks are poorly housed. But while there may be defection it is .considered that an obvious firm determination to hold the Colony bv strength within and a readiness with sufficient force to deal with incursions from without will go for to counteract this tendency. K.M.T. cannot be ignored as a factor having nuisance value.. attacks on Communist individuals and organisations in the Colony they might well create conditions of civil disturbance which would rebound on the ability of the administration to preserve law and order, and which would give rise to Communist retaliation.

By

The

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