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59. The possibilities are therefore :-
(i)
(ii)
(iii)
to abdicate our position by unilateral action, declaring our intention to go in a specified period
of time with or without an indication of our
readiness to talk to the Chinese about it; in
circumstances in which we might feel obliged to withdraw (paragraph above) this might be the only
course open to us; or
to approach the Chinese with an offer to negotiate our withdrawal. This might include (but not initially) an offer to consider an interim period of dual Anglo-Chinese control of the Colony;
to accept indirect Chinese influence over the way in which we administer Hong Kong (i.e. a Macao-type situation) with a view to ultimate transference of
control.
60. For reasons indicated in paragraph
a unilateral decision
to withdraw would be likely to provoke a sharp and hostile Chinese reaction and we would be subject to the maximum harrassment in our attempt to extricate ourselves. It is a course only to be pursued
if Chinese intransigence compels us to do so. 61. It is perhaps arguable that we could achieve the best conditions for withdrawal, in all the circumstances, either by accepting a Macao-type situation (rather than making a hurried unilateral attempt to withdraw) or by deliberately offering to associate the Chinese Government with the administration of the territory during a handing-over period. On the face of it, these courses could have the merit of frustrating the worst Chinese
intentions.
62. To follow the first of these courses would, as has been noted in paragraph 14 of our Interim Report, put us entirely in the hands of the Chinese, both as to the manner and timing of our final departure; we would havd no bargaining power when it came to seeking an eventual settlement; ourpeople there would be hostages who would be used to extract the maximum concessions. We would be faced by serious economic and political repercussions in Hong Kong in a situation of dwindling confidence. Additionally our lack of effective authority could raise acute political difficulties in relation to Ministers' responsibilities to Parliament for the administration of the territory. The only advantages we can see are that it might limit immediate bloodshed and make it easier eventually to surrender the Colony in an orderly fashion. We do not consider that this course offers any better prospect of discharging our responsibilities to the Chinese people of Hong Kong or of salvaging our assets and therefore
confirm our earlier conclusion that this course is quite
unacceptable.
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