TNAG-0609-FCO40-757-Local-Intelligence-Committee-assessment-of-political-situati-1977 — Page 33

FM HONG KONG 0406402

CONFIDENTIAL.

TO IMMEDIATE F C O TELEGRAM NO 7 OF 4 JANUARY INFO IMMEDIATE PEKING, CANBERRA, SINGAPORE! INFO SAVING WELLINGTON.

REGISTRY NO. 51

07 JAN1977

NICK O'yl

PLEASE PASS TO CABINET OFFICE FOR SECRETARY J.1.C.

THE FOLLOWING IS THE L I C ASSESSMENT FOR DECEMBER 1976. CHINESE COMMUNIST ACTIVITIES

THE CAMPAIGN DIRECTED AGAINST 'THE GANG OF FOUR' WITH ITS. ATTENDANT THEME OF THE EXALTATION OF CHAIRMAN HUA KUO-FENG CONTINUED UNABATED. THIS TOPIC DOMINATED THE CHINESE COMMUNIST PRESS AND WAS AUGMENTED BY COMPREHENSIVE BRIEFINGS AND STUDY SESSIONS FOR PARTY MEMBERS, ACTIVISTS AND FOLLOWERS. ALTHOUGH THE CAMPAIGN HAS BEEN MUCH MORE POPULAR THAN MANY OF ITS PREDECESSORS, THERE ARE SIGNS THAT IT IS LOSING SOME OF ITS APPEAL. SO FAR, NO LOCAL COMMUNIST ORGANISATION OR SENIOR CADRE APPEARS TO HAVE COME UNDER CRITICISM BY THE MOVEMENT TO ERADICATE THE GANG OF FOUR' INFLUENCES.

ECONOMY AND LABOUR

2. A WORK-TO-RULE THREAT BY GOVERNMENT EMPLOYED TYPISTS IS THE ONLY DISQUIETING FEATURE ON AN OTHERWISE UNTROUBLED LABOUR FRONT.

3. THERE HAS BEEN WIDESPREAD ADVERSE REACTION TO THE REASSESSMENT OF RATEABLE VALUES FOR 1977/78, THE RESULT OF WHICH WILL BE AN AVERAGE INCREASE IN ASSESSED VALUES OF 80%. ALTHOUGH THE RATE PERCENTAGE (AND THEREFORE THE EXACT AMOUNT OF RATES PAYABLE) HAS YET TO BE ANNOUNCED, ALL SECTORS OF THE PRESS GAVE CRITICAL

· COVERAGE TO THE SUBJECT AND MANY COMMERCIAL, INDUSTRIAL AND CIVIC 1. ORGANISATIONS AS WELL AS SOCIAL PRESSURE GROUPS HAVE EXPRESSED OPPOSITION TO THE INCREASE. THE EVIDENCE SO FAR INDICATES THAT THE PROTESTS WERE STRENGTHENED BY THE FEAR THAT GREATLY INCREASED RATES WOULD PRODUCE. INFLATIONARY PRESSURES. SEVERAL ORGANISATIONS (INCLUDING COMMUNIST ONES) ARE APPARENTLY, ATTEMPTING TO FORM A UNITED OPPOSITION.

4. THE ANNOUNCEMENT OF AN INCREASE IN FERRY FARES TO OUTLYING ISLANDS, WHICH WILL TAKE EFFECT FROM THE 1ST JANUARY, SPARKED OFF A SERIES OF PROTEST MEETINGS ORGANISED BY RURAL COMMITTEES, BUT THE OPPOSITION IS EXPECTED TO DECLINE.

KUOMINTANG (K.M.T.) ACTIVITIES

5. TEN K.M.T. INTELLIGENCE SERVICE OPERATIVES, ARRESTED IN SEPTEMBER WERE DEPORTED TO TAIWAN.

EDUCATION/STUDENTS

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6. THE SWING AGAINST THE PRO-CHINA FACTION IN POST-SECONDARY STUDENT UNIONS CONTINUED. THE FACTION WAS DEFEATED IN A SECOND- ROUND ELECTION AT THE, CHINESE UNIVERSITY AND FAILED TO WIN A 'VOTE OF CONFIDENCE AT ONE OF THE CONSTITUENT COLLEGES. ITS SOLE ELECTORAL SUCCESS WAS AT THE BAPTIST COLLEGE, WHERE IT WAS' RETURNED TO OFFICE UNOPPOSED.

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