TNAG-0280-FCO40-316-Visit-of-Parliamentary-under-Secretary-of-Foreign-and-Common-1970 — Page 52

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acquiosce in the way the Colony is administered.

Current Chinese Policy

3. The Chinese leadership have made determined efforts to

restore order and to reactivate the Chinese economy. At the

same time, they have embarked upon a more active, moderate and

flexible foreign policy. It is evident that the moderate

elements in the leadership (loosely identified as the experienced

administrators round Chou En-Lai and the senior Army Commanders)

play a dominant part in policy making.

4. 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 within 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 linc.

5. The long term prisoners still serving sentences for their

part in the disturbances in 1967 (80 in number at the end of

September) must remain a continuing point of friction in

Sino-Hong Kong relations. (See brief No. 9).

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/Benefits of Hong Kong

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