0003160 G.F. 316
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onwards the solc obstruction to reaching agreement lay in the wording of the replies from the Governor to the Macau All-Circles Delegation and to the Kwangtung Foreign Affairs Bureau. Agitation by the left-wing for immediate acceptance and implementation of all the demands led on 25th January to the imposition of a partial boycott of Portuguese nationals within Macau by the left wing and others on whom they could put sufficient pressure. A three man delegation from Lisbon arrived on 23rd January. Within a few days agreement was reached between the Macau government and the Chinese on the wording of the replies. At a formal and highly publicised ceremony on 29th January the Governor signed and handed over the reply to the Macau All-Circles Delegation and later that day a similar document was taken to the mainland by a Macau government delegation for transmission to the Kwangtung Foreign Affairs Bureau. The boycott was called off immediately and Macau ostensibly returned to normal.
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As the Portuguese authorities had by the end of the month not revealed to us the exact terms of the final settlement it is not possible to predict with any certainty what the immediate future will hold for Macau. There is no doubt, however, that the Macau administration has been humiliated and will not be able to take a strong line on any issue involving the left wing in the foreseeable future. A probable bone of contention will be the reported agreement by the Portuguese to return all refugees from China in future. Business confidence in Macau has undoubtedly been severely shaken (not least by the very strong rumour that the Portuguese had offered to return the Colony to the Chinese) and no major investment decisions are likely to be taken for at least several months. It is however likely that the flow of gamblers into Macau, will fairly quickly return to normal and help business confidence to build up again.
5.
Despite the Macau affair, which undoubtedly caused many people in Macau to have grave doubts about their future, there was no significant change in the flow of illegal immigrants from China through Macau or direct. It was noticeable however that many of those illegal immigrants who were caught and questioned claimed that their reason for leaving China was the general deterioration in their standard of living.
On 25th January General Nguyen Huu Co, Deputy Prime Minister and Secretary of State for Defence of South Vietnam arrived in Hong Kong from Taipei with his wife and a party of thirty. Shortly after arrival General Co was visited at his hotel by Linh Quang Vien, the South Vietnamese Minister of Security who had arrived in the Colony the previous day; and it eventually became clear that General Co had been dismissed and was not to return to Vietnam. The party was expected to leave on 29th January but, except for the Minister for Veteran Affairs, General Co's wife and 13 others, they were still in Hong Kong at the end of the month. It is disturbing that Hong Kong should have been chosen as a suitable place for dispos ing
It of a senior member of the South Vietnamese government. seems possible that General Co will wish to move on to Paris or elsewhere where there are other South Vietnamese expatriates. However, the situation will have to be watched carefully and measures taken to ensure as far as possible that Hong Kong is not left holding embarrassing babies in future.
MILITARY
Very little military activity was observed in the Border Defence Regiment during January.
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