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our administration, have openly demonstrated their loyalty to the British connections and are therefore particularly vulnerable to Chinese retaliation. In this category fall many serving in the Police Force and Civil Service and
prominent in public service; many will be British subjects
but some will have no claim to this status. These, particularly the Police, would have to be given the option of remaining or leaving. It is difficult to quantify this category; a very rough estimate is that they would number about 20,000 30,000 (with their dependents, about 90,000 135,000), but this figure might be a considerable under- estimate.
Responsibilities for Assets
26. It would be feasible in a planned and phased withdrawal to arrange the removal or transfer of a considerable
proportion of British and Hong Kong-owned moveable assets (including military and particularly "sensitive" equipment and stores). There would remain large investments in fixed assets (building and heavy plant) for which nothing could be realised except by agreement with the Chinese. We cannot expect Chinese acquiescence or co-operation in either operation, particularly so far as Hong Kong-owned assets are
concerned.
27. Foreign nationals would have to look to their own Governments for protection of their assets. The American assets (estimated recently at £40 million) would be very vulnerable and would undoubtedly be expropriated.
D. CHINESE INTERESTS
28.
Hong Kong provides China with a window on the outside world, and with an easy point of access for trade and travel. It has served as a centre (which we have evidence they value) from which to mount subversive activities against the free world, particularly in the field of subversive propaganda.
Foreign Exchange Earnings
29. China earns a large surplus on visible trade with the Colony (£170 millions in 1966). The bulk of China's exports to Hong Kong are foodstuffs (40%-50%); there is also a
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/considerable
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