While it would, of course, be foolish to place too much reliance on the economic importance of Hong Kong to the C.F.G. (paragraph 5) it would require very strong political or military reasons for the C.P.G. to take action to recover the Colony in the near future. While Hong Kong may not be absolutely essentiel to the economic life of China, there is little doubt that it still plays a very important part and, from all intelligence available, it is likely
To liken the relationship to continue to do so for the foreseeable future. between Hong Kong and China to one "between teacher and pupil" is very much an over- simplification and is somewhat misleading. It is likely that Mr. LI's recollectior of this section of the conversation, is more accurate i.e. one factor restraining China from a take-over of Hong Kong was the poor impression it would convey to
It is doubtful if the rest of the world "like an adult beating up a child".
indeed, China locks upon Hong Kong industries in the manner ascribed by Kr. HO; the C.P.3. must regard them with a rather jaundiced eye in that they are an example of what Chinese initiative and enterprise can achieve in a capitalist society, unfettered by considerations such as national economic (sic) planning. While it is true that it is in China's interests to allow the growth of Hong Kong industries, in that this creates a healthy economy and thereby increases demand for consumer goods from China, this statement conflicts somewhat with Mr. EO's earlier prognostication of constant troubles in Hong Kong.
AS
How-
6.
The estimate of E.K. $50 million expended by the C.P.G. in confron- tation is probably accurate, as far as direct expenditure is concerned. Mr. HO states, this cum in itself is negligible to a country like China. ever, when the true overall cost of confrontation to China is added up a different picture emerges. Chinese exports to Hong Kong fecreased by hundreds of millions of dollars, remittances to Olina from Overseas Chinese and from Hong Kong sank alarmingly, deposits in communist banks fell and have not yet recovered, China Products Stores and other communist businesses practically came to a standstill, their theatres were deserted and the circulation of their newspapers has slurped. All of these factors, and possibly cthers, have cost the C.F.3. money which it can ill afford to lose. To date the total cost probably comes to more than one-thousand-million dollars (H.K.). The emphasis which the C.F.G. business organisations have been placing on rebuilding their businesses is graphic evidence of the fact that the C.P.3. wishes to stop these losses, recover lost ground and if possible expand business interests and returns.
7.
money
The importance of the feelings of the masses to the communists are overstated in paragraph 7; the communist hierarchy worries about the masses whon it suits them so to do for political purposes, They certainly did not worry about the feelings of the masses when they called a 'strike' and planted boats
last year.
It is wishful thinking on their part to assume that people who did
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