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DRAFT INTERIM REPORT:
HONG KONG
In discussion on the situation in Hong Kong Ministers decided (OPD(67) 20th Mooting) that, since we could not roly on remaining in Hong Kong on present terms until the lease of the New Territories lapses in 1997, officials sh、uld consider our policy in respect of Hong Kong in the long term, what adaptations of the status of the territory
might be possible and desirable after the conclusion of the present conflict in Vietnam and also what steps would be necessary if we were forced to evacuate the Colony.
2*
We are preparing a tride-ranging study of the position and long term prospects in Hong Kong as the basis for consideration of future policy. But it is very necessary to give urgent consideration to our position if the situation should deteriorate suddenly in the near future. Accordingly we have prepared first an interin report on the prospects for withdrawal from Hong Kong if it voro suddenly forced upon us.
PEKING'S INTENTIONS
3.
All the evidence suggests that Poking did not deliberately start the disturbances in Hong Kong although they are now closely involved. The disturbances appear to have arisen as a result of actions by the local Communists, who were responding to the general atmosphoro of the Cultural
Revolution and the success of Communist tactics in Macao but did not have
specific orders from Poking. As the incidents occurrod, however, the Chinese Government was forced to react. They are now giving general directives to the Communists in Hong Kong but it is not yet possible to be certain how far Poking is prepared to press its campaign against the Colony. This is clearly a question of vital importance.
4. Before the Cultural Revolution, China's policy was to accopt the
status quo in Hong Kong. This policy was based on a realistic assessment of the advantages China derives from Hong Kong (approximately 40% of her
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