ENG-1948 — Page 8

of rice to relieve a critical food shortage which had arisen.

In the course of the year Chinese and British officials met on the frontier at Shataukok and jointly made arrangements for replacing in their original position a number of boundary stones which had been displaced during the Japanese occupation.

Friendly relations with China were unfortunately tem- porarily marred early in the year as a result of China's repre- sentations in connection with the "Kowloon City Incident," which resulted from the eviction of unauthorized squatters from land which formerly comprised the old walled city of Kowloon. The Chinese Government considered that they had cause to intervene in this matter since according to their interpretation of the Peking Convention of 1898, under which the New Terri- tories were leased to Great Britain, jurisdiction in Kowloon City was reserved to China. His Majesty's Government have been unable to accept this interpretation.

of

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A number of dissident Chinese political groups

groups out sympathy with the Chinese Government continued during year to take asylum in Hong Kong. There was a tendency for a certain number of these to abuse the hospitality granted to them by using the privileges of freedom of press and freedom of speech enjoyed in the Colony to attack in immoderate terms the established Government of China. It was therefore necessary for warnings to be given to them that they should not abuse the privilege of asylum they enjoyed.

Relations with the Portuguese colony of Macao have remained as cordial as ever, and the close links between the two Colonies have been further strengthened by the arrangements instituted during the year for easing travel formalities between the two places for bona fide British and Portuguese residents. At the end of December a meeting was held in Macao of the Chiefs of Police of Canton, Hong Kong, and Macao respectively, to discuss general problems of liaison in combatting crime, and in improving Police co-operation generally.

The Hong Kong Defence Force.

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Plans for the reconstitution of the Colony's Volunteer Forces came to fruition towards the end of the year with the passing of the Hong Kong Defence Force Ordinance. "Volunteering has a long and honourable history in the Colony. Almost 100 years ago the first Volunteers were raised, and thereafter the Corps grew and flourished until by December, 1941 it had a strength of 2,200 distributed between Infantry and Machine Gun Companies, Artillery Batteries and Engineering, Medical,

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