CONFIDENTIAL
COMMONWEALTH SECRETARY'S PRESS CONFERENCE
HONG KONG
QUESTION 1.
BACKGROUND.
How do you see the present situation in Hong Kong?
After past failures, the morale of the local Communists is
low and their leadership has been disrupted by police action. There is a
general realisation that direct intervention by the Chinese Government in
Peking is not likely to be forthcoming. They are uncertain what to do next.
They have derived some encouragement from the Chinese ultimatum about action
against the Press in Hong Kong and from the destruction of our Embassy in
Peking following upon the rejection of the ultimatum. This has led to some
stepping-up of their activity in the past week, but this has been easily
contained.
The terrorist tactics have taken a new and possibly rather serious
twist; an assassination campaign against prominent anti-Communist Chinese may
be in preparation. Already a popular Chinese radio commentator has been
murdered and a Chinese member of the Legislative and Executive Council has
received a parcel bomb.
QUESTION 2. What are the Communists really after in Hong Kong?
BACKGROUND. We do not think that Peking inspired the actions of the local
Communists in Hong Kong or that it has any intention of taking over the Colony.
We think, however, that Peking would exploit the situation, if it could, to
create a Macao-type situation in which we would continue to exercise normal
political control but it would be in a position to dictate all major decisions
while at the same time continuing to reap substantial economic benefits from the Colony.
The Colony's economic value to China is and remains considerable; but,
of course, this consideration may not prevail if doctrinaire and revolutionary
influences gain the upper hand in Peking. Nor perhaps would doubts and fears about American reaction (which we think is a factor inhibiting a Chinese take-over) carry any weight among the extreme revolutionaries.
CONFIDENTIAL
/QUESTION 3.
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