CO129-592-6 Reports on current situation- including weekly intelligence reports 18-9-1945 - 20-12-1945 — Page 50

SECRET.

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The Colony's ability to keep the wolf from the door by dint of improvisation has come to an end at a moment when all around; and particularly in SHANG I, evils such as inflation, black markets, strikes and 1.bour unrest are rearing their ugly heads with increasing momentum, and it is felt that the situation in HONG KONG cannot be kept in hand much longer unless supplies arrive in sufficient quantity to enable prices to be pegged and stability to be denons- trated as a counter-neasure to the present growing insecurity.

8.

CHINESE OPINION.

(i) Passing through the Colony recently was a Chinese Colonel, who described himself as a non-party ran and as such c

rare bird" in CHINA. The Colonel said that the rendition of HONG KONG was the subject uppermost in the minds of the Chinese poople, and speaking for inself he gave three reasons why the Colony should be returned:-

(E)

(b)

(c)

HONG SONG is now the only part of CHINA vhich does not come under Chinese sovereignty. The Chinese think of HONG KONG as Chinese territory, not British, The Atlantic Charter d raised Chinese hoes that territories like HONG KONG would be returned to their rightful owners.

HONG KONG's existence depended upon trade with CHINA, and unless the status of OMY HONG was made clear, there was always the possibility of CHIFA's ceasing to trade with the Colony. The Colonel thought, in fact, that the Chinese Government were already holding up trading agreements because there had been no pronouncerent from the British Government about HONG KONG's position in relation to CHIA. felt, however, t t the majority of Chinese were anxious that friendly relations between the two countries should continue.

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The var had shown that, as 10G KONG could not be held against determined opposition from the mainland, it was of little use to SRITAIN strategically.

The Colonel conceded that the condition would not be immediate and that arrangements could be made with regard to the use of the harbour by the british fleet. But, until this "cancer in the body were removed, it would continue to give pain, its renoval would bring about the restoration of concord between the British and the Chinese, both of whom would have got a good bargain for the British; trade, and for the Chinese, sovereignty - in addition to the benefit to HONG KONG itself, which would flourish again.

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(ii) The case for British-born Chinese in the employ of the HONG KONG Government has been st.....d in a letter written by one of their numbers to the editor of en English-language newspaper in the Colony. The writer complains of discrimination against the Chinese because they have Chinese names, and states that the salary and re- habilitation allowance they receive compare unfavourably with the erioluments drawn by others with foreign names, irrespective of the latter's service, ability, responsibility and rank. The present cost of living is ten times as high as in pre-war days, yet the Government servent with a Chinese name who has given 15 years service draws only about $150 per month. The writer does not see why preference should be shown to others whose countries never even took part in the war, and concludes his letter by saying, in effect. that such a state of affairs can have only one result namely, the transfer of the victims' friendship and likings to the Americans a tendency already apparent in CHINA.

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