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[ For inclusion in Part. E]
BADELA 412
7. American Turowement.
The Americans make great use of Hong Kong.
It is convenient as a recreational centre for
their forces engaged in the Viet-Nam war,
although it is not indespensible for this pur-
pose since either the Philippines or Formosa
could serve the same purpose. The Americans
also use Hong Kong as their major centre for
"China watching". In this role Hong Kong is
unique. These two considerations, together with
the United States' policy of containing China,
make it certain that the Americans would wish
us to stay in Hong Kong at least as long as
there is a communist government in Peking.
8. One of the factors which prevents Chinese
military involvement in any neighbouring country
(ie. India or Viet-Nam) is the fear of American
nuclear retaliation against China. The Chinese
leadership appear to be genuinely convinced
that the Americans wish to attack China and,
despite their propaganda about nuclear weapons
being "paper tigers", there is little doubt
that they take seriously the threat of a massive
nuclear attack. Although this fear does not
prevent China from pursuing policies of hostil-
ity towards the United States it does seem to
prevent them from pushing these policies to
the point of direct confrontation. It is there-
fore arguable that the Chinese could be deterred
from taking action against Hong Kong by the
threat of American retaliation against China.
It is however probably true that they would
only be deterred in this way from military
actions against Hong Kong which could be
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