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(Confidential) Sir,
CONFIDENTIAL
Hong Kong,
23 January, 1976.
This despatch is my Annual Report for 1975. A calendar of events is attached. I must apologise for its lateness due to my absence on leave.
2. The Hong Kong of today is sustained by a tripod. The three legs are: the support of Her Majesty's Government, the policy of the Chinese Government, and Hong Kong's ability to support its swollen population by its own resilient economy. In 1974 and 1975 I watched the third leg, the economy, take the full force of world recession and bend perilously, then adjust to the new stresses and begin to straighten up again. I will describe the course of events in more detail at the end of this despatch, but it has certainly been a most anxious time.
3. We are also trying to build a fourth leg to the tripod from a better relationship between Government and governed. It is being constructed from social progress, closer contact, more open and responsive government and pro- gressive participation, eventually leading to civic pride as a substitute for sense of national identity. This takes time and money. But I think that what has already been done, and broad acceptance of the sincerity of the Government in doing it, contributed to stability in the period of stress from which Hong Kong is emerging. One of the principal problems in the last two years has been to find the resources to maintain credible progress on this fourth leg, particularly in the massive social programmes that form such a vital element in it, but to the great credit of the Financial Secretary found they were.
4. At the core of this whole process of community building, is the deploy- ment of adequate forces to master crime and thus restore ease of mind to the population. In terms of social consciousness and credibility of Government, fear of violent crime in Hong Kong is the equivalent of fear of unemployment in the UK. The difference is a matter of Chinese as well as Hong Kong historical experience. This explains the depth of feeling here about prevention of the use of the death penalty here by Parliamentary opinion in the UK.
5. After 21 years of constant police effort, innovation and expansion, and of civilian education and organisation, signs of tangible results are at last becoming visible, and the fast and apparently inexorable rise in crime over the last seven or eight years has been halted. In view of the unacceptably high level at which it is running this is little consolation to the population, and one of our top priorities this year will be to reduce it.
6. These exceptionally difficult two years offered a wide range of oppor- tunities for exploitation and trouble-making by Peking. But though the Communists often attempted to make capital at the Government's expense, they consistently avoided confrontation, and Chinese officials did their best to co-operate to achieve friendly and constructive official relations. No doubt any trouble in Hong Kong would have been contrary to China's wider financial interests and inconsistent with her present external posture. Nevertheless I think that the excellent state of Anglo-Chinese relations was relevant. I also believe that the near-normalisation of working relations between the Hong Kong Government and Chinese officials in Hong Kong has helped. Both sides have taken advantage of this to speak and to forewarn as well as to transact business quietly and naturally. This relationship has been built up without prior negotiation or definition, and without any official recognition of the de facto official status of the officials on the Chinese side. It has developed over the last three years as a result of the persistent design and policy of the Hong Kong Government, which has gradually come to be met with comprehension and acceptance by the Chinese-who have
CONFIDENTIAL
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