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natural rate of population increase of the order of 21-3% and for a steadily improving standard of living may be difficult to maintain, since it is wholly dependent on growing world markets for the Colony's exports. Moreover, as the economic and military strength of China grows, Chinese pressure on the Colony is likely
to increase.
72. We consider finally what initiative we may possess in bringing the Chinese to negotiations about Hong Kong when the time seems right, bearing in mind that at any time China could make our position in the Colony impossible and force us to the conference table on their terms. The initiative would seem to be in our hands only to the extent that :-
(a) the economic value of Hong Kong might be so important to China that they would be prepared to treat with us to preserve this so far as possible after our departure; (b) the settlement of Hong Kong's future could be linked with a désire by China for a detente in its international
relations.
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