TNAG-0289-FCO40-325-Departmental-briefs-on-Hong-Kong-1971 — Page 112

SECRET.

Hong Kong's Policy towards China

activities.

With the rapidly changing situation in South-

East Asia, the value of the Colony as a listening post and

staging point will increase. Hong Kong also depends

heavily on China for essential supplies, especially food and

so is of direct economic value to China; between a third and

a half of China's foreign exchange earnings comes via the

Colony. These earnings play a major role in financing China's

trade deficits with other areas of the non-communist world.

13. Hong Kong's policy towards China has been one of

"firmness without provocation"; in particular, the

Goverment is careful not to cause offence, e.g. by avoiding

official contacts with the Nationalist authorities in Formosa,

and by ensuring as far as possible that the latter do not use

Hong Kong as a base for their subversive and intelligence

activities against the mainland.

Present Policy 14. of local

Communists

COMMUNIST CONFRONTATION

Since the end of the communist inspired disturbances in

1967, the local communists have avoided violence in their

programme of confrontation with the authorities. They 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. They have kept up their criticism of

the authorities using whatever means may have come to hand

and there is every indication that they will continue

SECRET

/indefinitely