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ANNEX A to DP 9/68(C)
Draft) (Continued)
she does not intend to do so in the near future.
Do
In the event of a decision to take over Hong Kong,
China is likely to use methods other than direct
aggression, such as a co-ordinated and systematic campaign
of terrorism, aimed at undermining public confidence and
at disrupting the machinery of government and the economy to an extent that would make the British position untenable. There is at present no sign that such a course will be pur- sued, but there will continue to be a risk of action on
these lines. We are likely to get at least some warning.
c. In the context of warning, even comparatively minor incidents in the densely populated areas are liable to grow rapidly into major riots in which mass excitement
and unrest can spread quickly. The local communists
would exploit such disturbances and, if they succeeded in
gaining wider support from the mass of the population, the
disturbances could well be considerable.
Prompt exercise
of authority by the Governor in the deployment of Security forces is a major factor in preventing the expans- ion and exploitation of such incidents.
d. With more realistic elements in the ascendant in
Peking at the end of 1967, and some signs that the lull in the Cultural Revolution is to be prolonged, Peking ordered a major policy change calling for the abandonment by the local Hong Kong communists of violence and the continuation of the struggle by political means.
e. If, during the next few years, confrontation was again raised to the level reached during the summer of 1967 and was maintained for a prolonged period, it could have a very severe effect on the economy and the confidence on which Hong Kong's viability depends.
Peking would therefore
try to ensure that such a campaign were regulated so as
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