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CS
CONFIDENTIAL
THE THREAT OF ECONOMIC SANCTIONS BY CHINA
i. Through control of a significant proportion of Hong Kong's essential
supplies of food (46% supplied by China), water (27% (?) supplied), and
petroleum products (17% supplied), China could cause serious inconvenience and
although this would probably not cause
hardship by their withdrawal
1.
the total collapse of economic life. China's control of about 12% of the
labour force could again cause disruption but is probably nd sufficient, unless
widespread anti-government feeling could also be engendered, to bring about a
general strike. Through its deep involvement in the banking and general financial
life of the colony China could create loss of confidence and economic dislocation
more subtly through financial scaremongering (rumours of a banking or insurance
collapse, for example). Such policies would only be applied at the expense of
the present policy of maximising foreign exchange earnings by exploiting a fully
viable capitalist economy since they would inevitably lead to a loss of
international financial confidence in Hong Kong and its future and a withdrawal.
of investment funds.
CONFIDENTIAL
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