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7.
COLONIAL
OFFICE
Hong Kong is in addition a useful trading outpost for China, especially
as regards commercial dealings with countries with whom it does not have
diplomatic rolations. Preliminary negotiations for grain doals with
Australia and Canada have often takon placo in Hong Kong. Western firms,
too, can readily mako contact with Chinese commercial organisations in tho
Colony.
8.
Hong Kong as hostage for our good bohaviour. As mentioned in Section B,
paragraph 21 abovo, China could at any timo bring pressure to bear on the
Colony with a view to influencing our policies or actions elsewhere than in
the Colony. This might be used in the promotion of China's interests
and to the detriment of our interests.
9. Hong Kong in our hands is of considerable economic value to China,
but its contribution to China's economy is clearly not indisponsablo. In
its prosont irrational mood, China may woll rogard economic advantago as
less important than doctrinal rectitude in which caso cortain political
embarrassmonts and disadvantages stomming from the Colony's continued
oxistonco may weigh hoavily. Russian jibes about China's tolerance of
foreign colonial possessions on its territory arc embarrassing for its
imago as a world revolutionary force. Thoro might be some disadvantago (even perhaps dangor) in the nearby presence of free, anti-Communist influence
which, in China's prosont divided stato, might pornoato or sorve as an
inspiration to certain clements opposing tho prosent regimo.
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