TNAG-0004-FCO40-40-Departmental-briefs-about-Hong-Kong-1968 — Page 174

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1.

D.

RELATIONS WITH CHINA

The Communist People's Government of China (like previous Chinese

Governments) regard Hong Kong as Chinese territory, wrested from the

mainland during a period of weakness and to be recovered in due course.

The present Chinese official attitude, pronounced in March, 1963, is

that Hong Kong and Macao are legacies from unequal treaties in the past

and that the Chinese claim will be settled peacefully through negotiation

when the time is ripe. In August, 1965 the Hong Kong Government received

reports through unofficial channels of further statements by the Chinese

communist leaders which confirmed the above policy and suggested that

the "liberation of Hong Kong would not take place for many years to come.

The status of Hong Kong would not be affected if the Vietnames war were

expanded, provided that Britain did not engage in aggression against

Chincse; did not permit Hong Kong to be used as a base by the U.S.;

and provided that the Hong Kong Government did not "persecute patriotic

workers and organisations in Hong Kong". We have no reason to think that

these reports indicate that the Chinese have decided on a time scale for

their campaign for the re-integration of Hong Kong with China. While

they do seem to indicate a continued reluctance to disturb the status quo,

they also contain a fairly clear threat of action if the status quo is

for any reason disturbed in a manner which they are forced to disapprove of.

2. China has very strong economic incentives to leave undisturbed

the status quo in Hong Kong. China earns an annual surplus of some

£200m. on invisible and visible trade accounts through Hong Kong (a very

substantial part of its foreign exchange earnings), and they are making

very substantial efforts to increase these earnings. Principal sources

are food exports to Hong Kong and remittances through Hong Kong from

overseas Chinese. Direct exports from China through Hong Kong are no

longer on a large scale, but China is increasingly using the facilities

offered by Hong Kong export houses and banks for its trade with the

13.

West.

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