TNAG-0056-FCO40-92-Evacuation-plan-1967 — Page 139

Trade

Cycle, molekuldse and E

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11.

The disruption created by a forced evacuation could be expected

to prevent new trading transactions between the U.K. and Hong Kong in

the short run. The blocking of Hong Kong accounts would moreover make

such new transactions difficult and unattractive, if not impossible.

H.M.G. would eventually however have to consider policy on imports

from Hong Kong, taking care to avoid action which might place an

unnecessary burden on the import of goods belonging to evacuees or on

traders with goods in transit. It would be necessary in due course to

treat Hong Kong exports as if they emanated from China. This would

involve the removal of Hong Kong from the Commonwealth preference area

and the imposition of import licensing for certain goods. Consideration

would also have to be given to the consequences for the import

arrangements for cotton textiles.

Situation of continued disturbance but not evacuation

12.

While we were not specifically asked to do so, we have thought

it desirable to deal also and briefly with a situation in which there

were no evacuation but continued disturbances. In these circumstances

there would be danger of capital flight (and of other serious and

potentially costly economic and administrative problems) arising from

a growing loss of confidence in H.M.G's ability to maintain order,

safeguard economic stability, and preserve the existing status of the

colony. This is discussed in Annex III. Adequate contingency planning

against this would require the co-operation of the Hong Kong authorities

and we recommend early consultation with them.

Conclusions and Recommendations

13.

In summary, our conclusions and recommendations are as follows:

In the context of a forced evacuation

A.

(1) There would be no possibility of protecting U.K. property

in the form of fixed physical assets such as buildings

(paragraphs 2 to 4 above).

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