TNAG-0289-FCO40-325-Departmental-briefs-on-Hong-Kong-1971 — Page 134

CONFIDENTIAL

den Kong's Policy towards Chian

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 Chim for essential supplies, especially food(and

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

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

Colony.

These corrings play a major role in financing China's

trade deficits with other areasof the non-communist world. 13. Hong Kong's policy towards China has been one of

in particular, the "firmness without provocation"; Government 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.

COMMUNIST CCNFRONTATION

Present Policy 14. Since the end of the communist inspired disturbances ir of local

1967, the local communists have avoided violence in their programme of confrontation with the authorities.

Communists

They arc

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 meana may have come to hand and there is every indication that they will continue · indefinitely in their efforts to undermino the authority of the Government and to win over the general public to their

own side.

CONFIDENTIAL

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