TNAG-0067-FCO40-103-Governors--reports-1968 — Page 68

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an agreement was reached that the Macau Government would issue a formal apology for the two incidents, recognise the guilt of the officials concerned, pay compensation amounting to the equivalent of over HK$2 million, hand over the seven KMT agents and take action to restrict KMT activities in Macau in future. To-day, although the administration of the colony remains nominally in the hands of the Portuguese, it is quite clear that their authority to impose their will, at any rate on supporters of the CPG, has almost entirely disappeared.

6. Although Hong Kong's involvement in all this was minimal, the implications of the dispute for Hong Kong were very much more substantial. It appeared that the CPG still considered that the advantage of having Macau (and hence Hong Kong) under alien administration were too important to sacrifice and that they had deliberately avoided taking back Macau, but had used the opportunity provided by the dispute to secure more limited aims; the elimination of KMT activities and influence in the province and the imposition of the maximum degree of humiliation on the Portuguese authorities. There were obvious lessons for us here in Hong Kong.

7. The first demonstration that these lessons of Macau had been learnt by the Communists in Hong Kong came in February and March when, under pressure from the Hong Kong Seamen's Union (HKSU) the Royal Interocean Line (RIL) management was compelled to apologise publicly and dismiss the captain of one of their ships, who had shot and wounded four Chinese members of his crew whilst in Australia. In April pro-Communist workers in a number of other companies began to put pressure on their managements and a new spirit of militancy amongst the rank and file became obvious. At the same time it became clear that pro-Communist leaders had released the tight control which they had hitherto exercised over their union members and were, in accordance with the precepts of the Cultural Revolution, allowing the "masses greater freedom to "struggle ". The pro-Communist Press was also becoming increasingly abusive, attacking the Government on a variety of grounds but particularly over the issue of visits of American ships and servicemen to the colony.

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8. In these conditions there was grave danger that a comparatively minor issue would start a major conflagration. The spark was provided by a dispute which arose in April in two artificial flower factories where the management was trying to impose more stringent work schedules. On 6 May disturbances broke out outside one of the factories in Kowloon and as a result 21 persons were arrested (including the Chairman of the union concerned with the artificial flower trade). The next day, the union, which was later backed by the pro- Communist Federation of Trade Unions (FTU), made four demands to the Government the release of all those arrested, the punishment of those responsible and the payment of compensation, a guarantee of workers' safety and finally that the police should not henceforward interfere in labour disputes. This was followed on 11 May by further disorders in which 143 people were arrested. On each occasion, the police were forced to intervene after repeated warnings when the crowd refused to limit its behaviour to peaceful picketing.

9. In the early stages of the crisis which followed, up to 16 May, the trouble was confined to North and East Kowloon. It was supported by paid hooligans and centred on the courts in which those arrested on 6 and 11 May were being tried, around the artificial flower factory, and in a resettlement estate near by. The police behaved with great restraint and, with the aid of night curfews on 11, 12, 13 and 18 May, succeeded in restoring order. Altogether 556 people were arrested; 28 police and 39 others were injured. The only fatality was a bystander killed by a stone.

10. On 15 May, the situation took a more serious turn when a statement was issued by the Ministry of Foreign Affairs in Peking condemning the British Government and authorities in Hong Kong for acts of brutal suppression and fascist atrocities in collusion with the United States. It also listed five demands which were to be accepted unconditionally and immediately. These included the immediate acceptance of the four demands of the Hong Kong Unions, the release of all those arrested in Hong Kong with apologies and compensation, the cessation of all Fascist measures and a guarantee against any recurrence of such incidents.

11. On 16 May, as the trouble in Kowloon began to subside, the focus shifted to Hong Kong Island as the result of the presentation to Government House by pro-Communist delegations of petitions supporting the "five demands ".

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