SECRET
indication that the viability of its somewha
artificial econogy can no longer be maintained.
This could occur because of a downturn in worl§
trade or (es could be the case any time after 1980)
because the economy starts to run doim na the
Mxy of the leɛse draws nearer and confidence,
particularly business confidence, gradually abbe
away.
3. We night feel obliged to acok to withdraw following
a poziod of Chinese pressure (ahort of military takeover)
which indicated that China bad a serious intention to
make our position untenable in the Colony (as opposed
to 208sure for propaganda purposea or to show
displeasure with British or Hong Kong policies). Such
pressure night take an ooonomic form donial of
food and water supplies or might be political i.e.
open encouragement of subversion and violence among
local Communists and their supportera, together with
a clear indication of China's support in the shape of
ins ired and organised border incidents. It is not
inconecivable that continuing physioni pressure by local
Communiste over a prolonged period would, oven without
direct support from Chinn, make our position impossible
» not so much becausSO we might lose the battle for
ve
minds and hearts of the Chinese population and control
of internal security, but because coonomie diaruption
and, above all, loss of business confidanoo within and
without the Colony might slowly map its economic health.
But the last few monthın have shown that, in the absence
of any sign that China intends to and our rule in
Hong Kong, local confidence and the confidencgóf the
outside world have not been seriously impaired by the
activitios of the local Communists, which have been
limited for lack of wide support and well within tho
TOF SECHIT
/capacity
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