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(1) While our position in Hong Kong gave China a hostage and made us vulnerable to pressure from her, we had not allowed such pressure to affect
our policy elsewhere.
C.
What advantages does China derive from Hong Kong?
(n) It should be made clear that this section was a British assessment of the advantages gained by China from our presence in Hong Kong; China herself night regard the position somewhat differently, The figures given in
paragraph 2 of the foreign exchange earnings of China from the operations of Chinese financial and commercial enterprises in Hong Kong were lower than
similar figures given in the past but reflected the latest intelligence
assessments.
(0) The draft made the point that Hong Kong's relative importance to China
as a source of foreign exchange night decline. Some assessment should be made of the likelihood of China making herself less dependent economically
on Hong Kong.
D.
Chinese intentions towards Hong Kong
(p) It was possible that a semi-autonomous government in Canton might energe
from the current Chinese disturbances which might attempt to negotiate with
us over Hong Kong. We should have to consider the implications of this
for our relations with the central Government in China. The Foreign Office
would consider whether this section needed to be revised in the light of
the latest situation.
E.
Are there any means of frustrating Chinese intentions? (a) There was no real prospect of achieving any solution of the Hong Kong
problem through the United Nations. It was also most unlikely that the
problem of Formosa could be solved in this way, although certain Chinese
opinion in Hong Kong hoped that an arrangement could eventually be made
with mainland China linked with the Formosa question. A United Nations
solution for Hong Kong was not possible without Chinese acquiescence, which
was inconceivable in the foreseeable future.
(r) While it was of great importance to the United States that we should
remain in Hong Kong, there could be no question of their providing a nuclear
guarantee; in any case United States involvement was all that was required.
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