TNAG-0248-FCO40-284-Effect-of-entry-of-UK-into-EEC-on-exports-from-Hong-Kong-1970 — Page 35

CONFIDENTIAL

3.

This situation has inevitably led to clashes of

interest as between the two Governments. And if the

United Kingdom entered the Common Market in the full

knowledge that such a course could not be followed

without serious economic consequences for Hong Kong,

then relations between the two Governments might reach

might

a nadir from which it would be very difficult for them

to recover. This could in turn make it extremely

difficult satisfactorily to discharge the Secretary

of State's constitutional responsibilities to Parliament

for the affairs of the Colony.

4. As regards (b) above, if the entry of the United

Kingdom into the Common Market so affected the economy

of Hong Kong (e.g. through loss of export markets) that

a serious unemployment problem developed, this could

lead to a grave internal security situation in the

Colony. Some 50% of Hong Kong's population of four

million are under 21 years of age and it is essential

that the economy should continue to expand at a suf-

ficiently rapid rate to provide employment for this

rising generation. In the worst possible case, the

security situation could deteriorate to a point where

Communist China might deem that the time had come for

Hong Kong to be taken back as part of the motherland.

This would be more likely to happen if the economic

value of Hong Kong to China were to decrease and if the

latter saw no prospect of any improvement in that aspect

of the situation.

CONFIDENTIAL

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