TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 57

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Taking Steps to Leave Hong Kong

29. If HMG indicated an intention to withdraw there would be a number

of international problems, including possibly pressure from the US

Government not to give up a Western foothold in the Far East at a

time when Soviet influence was expanding. If Peking opposed the move

and were not prepared to co-operate over transitional arrangements and

over reassuring the population about their future, it could be very

difficult, if not impossible to carry out. Otherwise international

difficulties would be relatively short-lived and would be unlikely on

their own to deter a British Government from leaving.

30.

Problems directly related to Hong Kong itself would be very

much more serious:

a)

Our obligations to the population.

Hong Kong would prefer British rule.

The great majority in

British Ministers of

successive governments have stressed their readiness to support

Hong Kong and, by implication, to provide a refuge for a

substantial group which had chosen not to live under Communism.

Withdrawal would be seen in Hong Kong and outside as a betrayal

and as inconsistent with the line taken on the Falkland Islands

and Gibraltar.

b) The consequence of (a) would be demands for entry to the United

Kingdom by a substantial number of the Hong Kong Citizens of

the United Kingdom and Colonies (at present estimated at 2.6

million) and probably by other Hong Kong residents who would

claim a moral commitment to them by HMG.

c)

There would be an immediate collapse of business confidence, a

fall in the Hong Kong Dollar and a flight of capital from

Hong Kong.

International markets and exhanges would be affected.

SECRET

/d)

1.