TNAG-0066-FCO40-102-Local-intelligence-reports-1968 — Page 76

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HONG KONG TELEGRAM NO. 715 TO COMMUNWLALTH OFFICE.

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CH) AN ANNOUNCEMENT BY THE COMMUNIST BANKS THAT AS FROM 1ST JUNG

P. ON DATE THEY WOULD CONVERT PERSONAL REMITTANCE TO CHINA INTO J.M. OF REMITTANCE INSTEAD OF AT DATE OF ENCASHMENT IN CHINA. LETTERS OF CREDIT FOR LOCAL CHINA TRADE MAY ALSO BE IN J.M.P.

(1) PROPAGANDA IN THE COMMUNIST PRESS GAVE WIDE COVERAGE TO THE C.P.G. PROTEST (PAPAGRAPH B) AND TO A SUPPORTING A.C.A.P.S.C. STATEMENT, AS WELL AS TO 'ANTI-AMERICAN' MEETINGS BY COMMUN IST ORGANISATIONS. AFTER INITIALLY IGNORING THE INCIDENT AT LO WU THE MAJOR COMMUNIST NEWSPAPERS SUBSEQUENTLY GAVE SOME PUBLICITY TO IT AND THE PROTEST BY THE HONG KONG BRANCH OF THE N.C.N.A. CONTINUED COVERAGE WAS GIVEN ALSO TO MEETINGS ON THE 'REINSTATEMENT STRUGGLE' AND 'RELEASE OF PRISONERS'. THE OFFICIAL ANNOUNCEMENT ON 1ST JUNE ABOUT CURRENCY RESERVES WAS RIDICULED AND DESCRIBED AS A 'SWINDLE'. NO REFERENCE WAS MADE TO THE ATTEMPT BY 'STRIKERS' TO DISRUPT

PUBLIC TRANSPORT.

(J) 17 ILLEGAL IMMIGRANTS ARRESTED DURING THE WEEK. ALL ARRIVED BY SEA. THE TOTAL FOR MAY WAS 91, AS AGAINST 134 FOR APRIL.

2. THE ANNOUNCEMENT BY THE LOCAL COMMUNIST BANKS THAT HENCEFORTH THERE WOULD BE INCREASED EMPHASIS ON THE USE OF J.M.P. FOR TRADING PURPOSES IS PROBABLY PART OF THE GENERAL PROPAGANDA ATTACKS ON THE INSTABILITY OF WESTERN CURRENCIES IN GENERAL AND STERLING CAND THE HONG KONG DOLLAR) IN PARTICULAR. NEVERTHELESS IT POSSIBLY DOES REFLECT ALSO A GENUINE CONCERN ON THE PART OF THE CHINESE THAT THERE IS A DANGER OF DEVALUATION OF WESTERN CURRENCIES IN THE NEAR FUTURE. 3. THERE IS LITTLE DOUBT THAT THE INCIDENT AT LO WU WAS SPONTANEOUS BUT IT PROVIDES A FURTHER INDICATION OF THE CAPACITY OF THE C.T. FARMERS TO EXPLOIT ANY CONFLICT WITH THE BRITISH AUTHORITIES, NO MATTER HOW MINOR IT MAY BE. AS ALWAYS IN THESE SITUATIONS THE P.L.A. IS FACED WITH A DILEMMA BETWEEN MAINTAINING CONTROL ON THE ONE HAND AND, ON THE OTHER, APPEARING TO SIDE WITH THE 'MASSES' IN THEIR GRIEVANCES AGAINST THE 'BRITISH IMPERIALISTS'. THUS, DURING THE FIRST DAY AND NIGHT, THE P.L.A. ATTITUDE VARIED FROM LIMITED CONTROL TO APPARENT INDIFFERENCE. HOWEVER, FROM ABOUT 08.00 HOURS ON THE 30TH MAY THE P.L.A. APPEARS TO HAVE REASSERTED ITS AUTHORITY. THE ENTRY OF THE SHUM CHUN AUTHORITIES INTO THE DISPUTE AND THEI? REPETITION OF THE FARMERS' DEMANDS DOES NOT APPEAR TO BE AT ESCAL- ATION BUT RATHER AN ENDEVOUR TO REMOVE THE ISSUE FROM THE FARMERS IN AN ATTEMPT TO PREVENT FURTHER INCIDENTS. IT COULD INDICATE ALTO THAT THE C.P.G. WISH TO TREAT THIS INCIDENT AS A PURELY LOCAL AFFAIR.

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