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Chinese Intentions
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. There is no evidence that the disturbances were
deliberately started by Peking. They appear to have
resulted from local initiatives and to have been the
product of a more militant atmosphere among the Communists
in Hong Kong responding to the "cultural revolution" in
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China.
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But Peking has supported the "demands" of the local
Communists and continues to do so; and, whatever the
origins of the disturbances, Peking is now closely involved.
2. There is no evidence of any basic change in China's
policy of maintaining the status quo. There are indications,
however, that Peking is undecided about how to handle the
Hong Kong issue: in an article in the People's Daily of
3rd June "compatriots" were enjoined to await the call for
action to overthrow British imperialism in Hong Kong.
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1. This hesitancy could be the prelude, to a slow and
prolonged process of backing down but it could equally
reflect the conflicting pressures in Peking. On the one
hand there are the factors which support present Chinese
policy notably the undoubted economic benefit of Hong Kong
to China (about 40% of her foreign exchange earnings comes
from Hong Kong and is important in financing the grain
imports) and the fact that public opinion in Hong Kong has
reacted with surprising firmness to Communist action,
showing the Chinese that they cannot hope for a cheap
Macao-type victory. On the other hand there are factors
tending towards an extremist policy: the commitment of
Peking to the "five demands"; the pressures of the cultural
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revolution call for strong action; and the considerable
confusion in the present stage of the cultural revolution
(with the "moderates" understrong attack and Peking not
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