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and other producers. But economists would probably say that in the long run. the provision of these competitive products is of benefit to European economies rather than the reverse, provided the trade is regulated in such a way as to avoid serious damage and disruption, as it is.
19. It might also be said in these days when colonies are an anachronism, and pride in colonial achievement is at a low ebb, that Hong Kong may sometimes present particular problems in Whitehall. This is because it is a dependent territory to which, constitutionally, Her Majesty's Government can give orders. But in practice the commercial size of Hong Kong, the vigour of the population, the strength of its financial position and the comparative sophistication of its administra- tion narrow greatly the area in which these constitutional powers can be asserted in the Colony-at least without unacceptable repercussions or conflict with the principle of the paramountcy of the interests of the colonial people-even though they cannot be denied in Parliament. In spite of the fact that from time to time these contradictions bulk large, it is my submission that they are ephemeral and irrelevant to the main stream of the relationship. The latter is highly productive and successful and has greatly redounded to the credit and profit of the UK in this part of the world.
Conclusion
20. As I said at the beginning of this despatch, the main beneficiaries of Hong Kong are the Chinese population of the Colony--not just the "taipans" but the man in the street. China for her part derives benefits from Hong Kong sufficiently great to override political pressures to recover the leased and ceded territories. Since Chou En-lai remarked to you last November that the preservation of Hong Kong as a free port was in the interests of Britain and China, I doubt if the Colony is any embarrassment to Sino British relations. Finally, the advantages Hong Kong offers the UK are great, and could be even greater.
21. I am sending a copy of this despatch to Her Majesty's Ambassador at Peking.
I have, etc.,
MURRAY MACLEHOSE,
Governor.
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