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(b) With or without a changed situation in China as in (a), a
swing of substantial proportions in Hong Kong Chinese opinion in favour of rejoining China. This might come about in deteriorating economic conditions in Hong Kong; or as a result of a successful Communist campaign to "cultivate the masses"; or a combination of both. The emergence in Hong Kong of a generation that has its roots only in the Colony possibly militates against this; on the other hand, China's growing strength coupled with our disengagement East of Suez may lead in time to a resigned acceptance of the inevitable by most of the Colony's population who will adjust their attitudes accordingly. (c) severe economic setback for Hong Kong or period of economic stagnation, with a clear indication that the viability of its
This somewhat artificial economy can no longer be maintained. could occur because of a downturn in trade or (as could be the case any time after 1980) because the economy starts to run down as the expiry of the lease draws nearer and confidence, particularly business confidence, gradually ebbs away. 49. We might feel obliged to seek to withdraw following a period of Chinese pressure (short of military takeover) which indicated that China had a serious intention to make our position untenable in the Colony (as distinct from pressure for propaganda purposes or to show displeasure with British or Hong Kong policies). Such pressure might take an economic form, e.g. denial of food and water supplies or might be political, i.c. open encouragement of subversion and violence among local Communists and their supporters, together with a clear indication of China's support in the shape of inspired and organised birder incidents, infiltration of trained terrorist units, etc. It is not inconceivable that continuing physical pressure by local Communists over a prolonged period would, even without direct support from China, make our position impossible not so much bocause we might lose the battle for the minds and hearts of the Chinese population and control of internal security, but because economic disruption and, above all, loss of business confidence within and without the Colony might slowly sap its economic health. But the last few months have shown that, in the absence of any sign that China intends to end our rule in Hong Kong, local confidence and the confidence of the outside world would have not been seriously impaired.
The Problems
50. First and foremost of these will be the discharge of our responsibilities to British subjects and foreign nationals resident in the Colony and to British and foreign assets there (paragraphs 20-27 above). Secondly there will be the problems of maintaining internal security afte. the decision to withdraw has been announced: public confidence will be destroyed overnight and with it may vanish the inclination to accept established authority.
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