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2 -
earner of foreign exchange will diminish. Such evidence as
we have indicates that there are differences within the Chinese
leadership between the extremist group inspired by Mao who are
unreservedly in favour of pushing the Cultural Revolution to
the limit and encouraging "making revolution" inside China and
outside it, and a second group of a more moderate and realist
attitude including the Prime Minister, Chou En-lai. It is
possible that the first group might be willing to sacrifice the
economic benefits derived from Hong Kong in the interests of
intensifying the confrontation with the Hong Kong Government,
while the second group would be disposed to control the level
of confrontation in order to avoid disrupting the colony to an
extent which would damage China's economic interests. In the
present state of confusion in China it is by no means certain
that the second group would prevail. Soviet jibes about China's
tolerance of foreign colonial possessions on its territory will
not be helpful to them.
D Paragraph 5
This paragraph should now read as follows after the
sentence ending "China's overwhelming local military superiority":
"There are three other types of situations in which
negotiations for such a withdrawal might be contemplated.
These are:
(a) as in present draft_7
(b) A situation in which Kwangtung broke away from
control by Peking;
(c) as (b) in present draft_7
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/(a)
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