they
As we understand them, ECGD's reasons for
stemmma requiring a joint guarantee are mixed stem partly from their assessment of the commercial risk attaching to a project of this nature and partly from the risk of political developments in China leading to the liquida-
tion of Hong Kong. The requirement of a joint guarantee admittedly formed part of the original
conditions for cover laid down by ECGD early
in 1967, at a time when that department can
only have been concerned about the commercial
And risks. However in March of that year
? (Lord) Brown felt able to agree that the joint guarantee requirement could be dropped al a decision which implied that not too serious
a view needed to be taken of the commercial
how
risk. In reimposing the condition of a joint suarantee
I suspect that the main consideration weighing with ECGD is still the political risk
Communist contionlation which, at the height of the troubles last year, led them to ask for a Hong Kong Government guarantee on terms and conditions that proved quite unacceptable to that government. might help you and ECGD if I were to say
something about the political risk.
The threat to Hong Kong's continued
It
existence is basically the same now, both in
nature and degree, as it has been since the communist's came to power in early 50's.
1949
It does not lie in the internal
'situation of the Colony; the events of 1967
have shown that communist pressures within the Colony can be contained if they are not supported from outside. But once the Peking Government conceives the intention of taking
Hạng động s the Colony over, then ite/days will undoubtedly be numbered. At no stage in the turmoil of the Cultural Revolution in China has there
been any evidence of such an intention nor do we see it as a likely development of the revolution, now that the worst frenzies of this remarkable phase in Chinese history appear to have passed. There was no evidence that they
events of 1967 were deliberately inspired from
Pekingo and Communist policy in Hong Kong,
as dictated
The 467 trouble in
due to the,
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revention in China and
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