TNAG-0060-FCO40-96-Strength-of-Hong-Kong-garrison-1968 — Page 48

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ANNEX TO COS 23/68

Continued)

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 underming 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 pursued, but there will continue to be a risk of action on these line s. We are likely

to get at least some warning of such a systematic campaign.

C.

In other circumstances little or no warning might

be available, and 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.

d. 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. On the assumption that China would not be intending to make the British position wholly untenable, she would try to ensure that such a campaign was regulated so as to avoid the disadvantages to herself attendant on serious economic decline or collapse.

e.

Nevertheless, a policy of moderation could quickly be reversed, particularly if the Cultural Revolution flared up again with a resurgence of extremism, although at present this seems unlikely. But if it did, it could create a heightened danger of direct action against Hong Kong either deliberately, or by miscalculation. The danger of action by the Chinese aimed at taking over Hong Kong might increase should the economic importance of Hong Kong to China decline.

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