There is the third needle which points to the fact that China is completely bust. There is not even sufficient money to pay the peasants for their harvest, nor is there enough coal for the winter. This means that sooner of later they will have to start printing money and that China may well have an inflation of 1948 Shanghai proportions.
There is the fourth needle which points towards the possibility of a Civil War in China and a split of the country into two or maybe even four, or six independent entities.
The fifth needle points to our Hong Kong Government pushed by a very vocal number of our own citizens into making a terrible mistake about the Vietnamese refugees. We already have a very bad reputation because of our recent poor handling of these refugees, and if we now follow the line which was originally advised by a Legislative Councillor under the heading of "The Final Solution" (and I don't have to remind you of what that implied in Nazi Germany), to euphemistically mandatorially repatriate the lot (as if words like that can hide the stark fact that we are sending people back to misery and starvation and jail), then quite apart from the inhuman aspect, the political consequencies of riots in our refugee camps, of suicides of Vietnamese refugees which will get worldwide media coverage, will be horrendous. Not only will sympathy for the problems facing Hong Kong disappear very rapidly, but it may also reflect into our negotiations on GATT and prosecutions by the Common Market for dumping etc..
The sixth needle points to the Hong Kong Government's lack of action in the face of our pernicious inflation. The other day a Government economist actually attacked the South China Morning Post for using a headline stating inflation was increasing again, which was quite true, and proudly announced that it was, in fact, stabilising at 10%, implying that a 10% inflation rate is perfectly alright when you and I know damn well it isn't. A 10% inflation rate will make us uncompetitive (and some signs of this are already appearing, just look at our declining export figures to Germany, the U.S. and the U.K.), it will lower the standard of living of our workers, eat up the savings of our elderly and pensioners, most of whom are ex-Civil Servants, which will not be particularly good for the morale of the present Civil Service (but the Government doesn't seem to care about that anyhow because the erosion of pensions of previous Civil Servants by the fall in the HK$ has never been made good). Government just doesn't seem to understand that there are some remedies available immediately which could reverse the inflationary trend and lower the inflation rate quite considerably. Most important of these would be to allow import of labour, and, of course, that also could help us solve some of the refugee problems. Also, we must now link the HK$ to a basket of strong currencies rather than keeping it tied to a weak US$.
The seventh needle points to the problems we will be facing when the Basic Law is passed by the NPC and set into concrete. It is fairly obvious from everything one hears, particularly about Jiang Zemin, that the attitude in Beijing is not to give an inch, that, in fact, the Basic Law is already far too liberal, and Beijing should have much more say in the running of the S.A.R.. I have already made the point that we cannot rely on the fact that 70% of China's foreign exchange is produced for them here, or that we are a big investor in China, or that we are teaching them how to deal with the 21st Century. The fact is that in good old Mao Tse-tung style politics over-rides economical considerations every time (unfortunately, not only in China). Jiang Zemin considers us a subversive element. He has expressed several times to visitors that all the money for the tents etc. that were erected on Tiananmen Square came from Hong Kong.
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So the Hong Kong threat to Communism
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