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H. CONCLUSIONS
British Interests
(a)
(b)
(c)
At the present time it costs us nothing to maintain our position in Hong Kong (apart from our net expenditure on defence). We have a sizeable investment in the Colony and a considerable trade with it. It has accumulated large sterling balances which it is in H.M.G's. interest to retain in a substantially stable form.
We derive substantial advantages from it as a centre of communications and for intelligence operations, and politically it has some value to us in our relations with our allies, particularly the Americans.
But the economy is vulnerable both th commercial changes in the free world and to Chinese pressures. In a period of prolonged economic recession or stagnation, the Colony could become a major liability. Internal pressures and outside criticism may build up because constitutional advance is inhibited, Our position in Hong Kong clouds our relations with China. And we are oblited to maintain a garrison there which would be at serious risk in the event of a Chinese
takeover.
British Responsibilities
(a)
We have responsibilities to safeguard the welfare and interests of about half the population of Hong Kong (i.e. to about 2 million, nearly all Chinese). We have a special responsibility to some 100,000 - 200,000 Chinese who would be particularly vulnerable to Chinese retaliation because of their connection with us. In whatever circumstances we abdicate our position it will be impossible to discharge all our responsibilities to the Hong Kong Chinese or to remove or protect all British and Hong Kong-owned assets (other than a proportion of the moveable assets).
Chinese Interests
(e)
Hong Kong provides China with easy access to the free
In world for trade, travel and subversive activities.
Japa
our hands it is of considerable economic value to China, accounting for about a third of its total foreign exchange earnings; but, as China's economy develops, that value
could diminish.
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