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contemplating a possible change in their policy towards the Colony, the Chinese might well be influenced by US attitudes.)
3.
The assumption that our liabilities in Hong Kong will increase is not unreasonable in a territory where the dynamism of the economy is likely to make it an increasingly significant factor in the pattern of world trade and investment and where the sociological attitudes are Chinese and not British. But meanwhile there is no obvious way of diminishing our commitment to the large number of British subjects of Chinese origin, especially those to whom we owe a particular debt. This one factor alone, not least in domestic UK political terms, argues strongly in favour of the retention of the status quo if this is at all possible; and decisively against a forcible take-over by China.
4.
But continuance of the status quo depends more upon the
attitudes of mainland China than on our own. China's attitudes have
varied with the years and the fact that they are at present favourable is no argument for believing they will continue to be so for the indefinite future. For the present, however, the Chinese seem to have arrived at a satisfactory formula for reconciling their ideological and nationalistic commitment to resuming possession with more pragmatic considerations ('a problem exists but it is for the next generation (or alternatively two or three generations) to solve'). The formula is entirely consistent with the signals about present Chinese attitudes manifest in their actions in specific and concrete situations (see Annex).
5.
The strong pragmatic reasons for the present favourable Chinese attitude are set out in section III. A. of the paper of
5 March but there are inevitably doubts as to how long this attitude will be maintained. Some of the present advantages to China may not seem so decisive in a few years time. For instance, on existing trends, Hong Kong would account for only 20%-25% of China's total foreign exchange earnings by 1980, as compared with 40% in 1972. Furthermore, while the leaders most likely to follow Mao and Chou seem to share their views on Hong Kong, there may be some shift of
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THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER SECTION 3(4) OF THE PUBLIC RECORDS ACT 1958
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