CONFIDENTIAL
Political
NOTES ON 10-year, FORECAST FOR HONG KONG
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The Peking Government is faced with a dilemma in Hong Kong.
On the one hand, China obtains 30-40% of her total foreign exchange
earnings through the Colony, which also serves other useful
purposes (e.g. as a listening post, a channel for subversion in
South East Asia and a window on the outside world), On the other
hand, the Peking Government regards Hong Kong as part of China to
be taken back at the appropriate time and the British presence in and control over Hong Kong represents a continuing loss of face
for Peking.
Ideally, Peking would like to bring about a Macao-type
situation in Hong Kong which would give them the best of both worlds.
There is no evidence whatever to suggest that the Communist-
inspired disturbances in Hong Kong in 1967 were deliberately
provoked by Peking. Rather does the evidence indicate that those
disturbances resulted from the effects of an over-spill of the
cultural revolution on Communist elements in the Colony.
But when confrontation began in Hong Kong, Peking went along
with it only to the minimum extent necessary to show solidarity with
their local compatriots.
Had Peking any intention of taking over Hong Kong at the present
time, or indeed in the immediate future, then 1967 would seem to
have been the most likely time for them to do so (the cultural
revolution was at its height, relations with Hong Kong and with
H.M.G. were at their lowest ebb and their compatriots in Hong Kong
were confidently expecting their substantial support).
The results of confrontation showed Peking that they have
little or no support from the masses in Hong Kong, many of whom
are
(one in four) we refugees from Chinese Communista
The local Communists in Hong Kong have since received specific
instructions from Peking to abandon their campaign of violence
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