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in the Colony possibly militates against this; on the other hand, China's growing strength coupled with our disengagement Bast of Suez and the general effects of the approach of 1997 (see Annex B) may
lead in time to a resigned acceptance of the inevitable by most of the Colony's population who
will adjust their attitude accordingly.
(c) A severe economic setback for Hong Kong or period
of economic stagnation, with a clear indication that the viability of its somewhat artificial
economy can no longer be maintained. This could occur because of restrictions imposed by importing countries on her trade or (as could be the case any
time after 1980) because the economy starts to run down as the expiry of the lease draws nearer and confidence, particularly business confidence,
gradually ebbs away.
56. We might feel obliged to withdraw following a prolonged period of physical pressure by local Communists. This, even without direct support from China, might make our position impossible not so much because we might lose the support of the Chinese population and control of internal security, but because economic disruption and, above all, loss of business confidence within and without the Colony might slowly
sap its economic health. However, the events of last year have shown that, in the absence of any sign that China intends to end our rule in Hong Kong or that we are prepared to go, local confidence and the confidence of the outside world have not been seriously impaired (and may indeed have been temporarily enhanced).
57. We would have seriously to consider withdrawal if such pressure had China's support in furtherance of the aim to reduce us to a position of subservience (as indicated in Section E). The means available to China (which would no doubt be applied simultaneously) might take an economic form (e.g. denial of food and water supplies, promotion of strikes or stoppages of work) or might be political e.g. open encouragement of subversion and violence among local Communists and their supporters, together with a clear indication of
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/China's
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