TNAG-0279-FCO40-315-Visit-of-Secretary-of-State-for-Foreign-and-Commonwealth-Aff-1970 — Page 26

CONFIDENTIAL

(loosely identified as the experienced administrators round

Chou En-Lai and the senior Army Commanders) play an increasingly

influential part in policy making.

1. The gradual evolution of more stable and pragmatic policies

has been reflected in the Chinese attitude towards Hong Kong.

The violent phase of confrontation has been abandoned and the local

Hong Kong communists are under firm instructions from Peking to act

ithin the law and to direct their activities to building a broader

political base in the Colony. Communist financial institutions are

under instructions to expand Chinese commercial interests in the

Colony. While some local Communists are probably restive under

these restraints, by and large the Communist leadership in the

Colony appears to have accepted the current line.

5

"

The long term prisoners still serving sentences for their

part in the disturbances in 1967 (115 in number at the end of

March) must remain a continuing point of friction in Sino-Hong Kong

There is little pressure for their release at the

relations.

moment and the local Communists secm resigned to the likelihood that

the prisoners will have to serve out their sentences less remission.

But for prestige reasons and the morale of their local supporters

the Chinese Government cannot afford to forget these prisoners.

and we must assume that it remains their objective to secure their

release.

Benefits of Hong Kong

6. The Chinese derive considerable benefits from the Colony, which

provides them with easy access to world markets and serves as

invaluable base for travel and intelligence activities.

With

the rapidly changing situation in South-East Asia, the value of the

CONFIDENTIAL

/ Colony