enrolments was, not so much the fall off, but the failure
to carry out the planned expansion. A recent survey
showed that the over-all figures for enrolment in communist
schools have decreased by some 7% since confrontation,
now totalling just over 18,000 (detailed figures are at
Appendix 'C'). Looked at in another way, however, the
students in the communist schools represent only some
1.8% of the total student population in the Colony.
21.
It was significant, also, that some schools which
were previously assessed as communist controlled played
little or no part in confrontation, possibly because of
timidity on the part of the school supervisors. Others,
particularly in the New Territories, which had previously
been recorded as non-political, revealed strong
communist penetration. There was also a certain amount
of communist student activity in Government and neutral
schools in the urban areas.
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22.
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Since the cessation of violence, the communist
schools have resumed their normal academic curriculum
and, in fact, are placing emphasis on the need for students
to work harder to catch up with the studies they missed
through involvement in confrontation activities.
23.
In the future, the communist schools will
undoubtedly resume their expansion plans by offering
similar attractions, i.e. cheap education and good
discipline. They can be expected to play their part
also in the general united front campaign by increasing
their contacts with students in Government and private
neutral schools, particularly in the middle school sections.
Communism often has a strong attraction for teenage
students, especially in a community like Hong Kong where
there are so many examples of disparity in social levels.
It is likely to have an even stronger attraction for
local Chinese students, to whom nationalism and Chinese
communism can be represented as virtually synonymous.
These moves in the educational field to spread the
gospel will represent an increasing security danger and
prove very difficult to combat. While, at present,
the problem appears to be relatively small there is no
doubt that this area of communist activity will have to
be watched very carefully in the future, particularly
if, as seems likely, they seek to expand their
influence to neutral schools.
24.
The communist schools do, of course, provide a
steady stream of indoctrinated young people for
employment in the Colony. While many of these are taken
into communist banks, commercial concerns etc., a
considerable proportion find their way into non-communist
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organisations. During 1967, some 612 students graduated
from communist secondary schools and while this is a
very small percentage of the total graduates from all
secondary schools in Hong Kong, it must be remembered
that each and every one must be considered a dedicated
communist and, as such, a potential security threat.
25.
There has been little change in the teaching
staff at communist schools since confrontation despite
the fact that salaries are generally lower than those
paid by most other schools. This is a further indication
of the dedication these people have to the chosen task
of indoctrinating the young and there is little doubt
that the majority of the nearly 800 teachers in the
communist schools would be ready and willing to lead their
charges in violent anti-Government activities in the
future should they be called upon to so do. The supply
of new teachers, for the primary school sections, at
least, does not present any difficulties as graduates
from the communist secondary schools are available in
sufficient numbers for these posts and, so far, the only
staff difficulty the middle schools have encountered,
is in the recruitment of good English teachers. However,
this is a problem which is not confined to the communist
schools.
26.
These schools do not receive Hong Kong Government
subventions and, because of their low fees, the majority
are supported by various communist organisations and by
fund raising campaigns. It is possible that because
of the manner in which they have isolated themselves
from the remainder of the community the communists may
experience more difficulty in the future in raising
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money for schools.
This could result in a slow down
of expansion and the introduction of economy measures.
Nevertheless, there is little doubt that the presence
in the Colony of this type of school, with its population
of dedicated young communists, who will be constantly
attempting to expand their sphere of influence, must
continue to present a security problem.
PRESS
27.
Propaganda always forms an important weapon
in the armoury of any communist movement and the Hong
Kong communists are no exception to this rule.
The press
is used by the communists as their main propaganda
weapon and, following the re-publication of three
suppressed newspapers in mid-February, 1968, there are
now 9 communist daily newspapers with a combined daily
circulation of 248,000, well below the pre-confrontation
circulation figure of nearly 350,000 (detailed figures
are at Appendix 'D'). However, it is estimated that some are at
600,000 people see a communist newspaper each day, a
considerable proportion of the reading public. The
communist press, in fact, accounts for 22.1% of the total
number of newspapers published each day, although this
is a considerable decrease on the 29.38% which it had
obtained in the pre-confrontation period. It is true
that the doctrinaire newspapers have a relatively small
circulation, totalling some 86,000 copies between them
each day. The remaining newspapers draw a wider
readership because, in addition to communist propaganda,
they devote considerable space to non-political topics
including sports, film reviews and short stories. While
the majority of people buy these newspapers for their
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non-political features, nevertheless, they do, in all
probability, read some of the communist slanted news
items.
28.
A recent survey commissioned by Government,
but carried out by an independent organisation, showed
that the majority of the people who buy communist
newspapers also read, at least, one other neutral or right-wing
newspaper. It is possible therefore, that
many of these people believe the news reported by the
more responsible press and that the communist press
does not have the influence its circulation suggests.
The communist newspapers largely discredited themselves
during confrontation and much of the news they publish
now is believed only by the more fervent communist
supporters, Nevertheless, if a story is reported often enough without
being satisfactorily countered then the
belief can grow that it must have some substance, and in
the latest communist propaganda campaign, in which
Government is attacked on domestic issues such as hawker
and resettlement policies, the communist press is likely
to attract sympathy and support from those who are
directly affected. However, there is no indication that
the communist press has any prospect of making any
startling improvement in its circulation in the foreseeable
future.
29.
It is possible, of course, that realising their
existing newspapers are not having much impact on the
general public, the communists may try to buy over or subsidize a small
neutral paper in the hope that by its
covert manipulation they may attract wider support for
their cause. One attempt to buy over such a paper, in
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December, 1967, failed rather miserably.
30.
In Hong Kong,
Both the Ta Kung Pao and Wen Wei Pao receive
financial assistance from China and are, therefore, not entirely
dependent on their sales for their existence. The other newspapers also,
through the receipt from China of cheap newsprint are able to exist on a
lower
circulation and advertising revenue than most other
newspapers. However, the subsidies to the communist press are in the
process of being reduced and the newspapers
are currently introducing a number of economy measures. This in itself
may hamper their efforts to expand circulation. Communist political
control of these newspapers compels
them to publish heavy political diatribes.
where there is such a wide choice of daily newspapers, a
paper does not stand much chance of expanding its
readership, unless it is bright and entertaining; the
major communist newspapers can never hope to be this,
short of changing their whole content and format. Nevertheless, they
still have the capacity to disseminate C.P.G. policy to the masses and,
if required, they could
become more belligerent and encourage violence again.
At the present time, although continuing to take every
opportunity to attack Government, the communist press
is remaining generally on the fringe of the law, thus largely denying
the use of legal means to restrict its
virulence.
PUBLICATIONS
31.
The publishing sphere is closely allied to
the press, being another aspect of the communist propaganda
machine. before confrontation the communists had
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flourishing printing and publishing undertakings,
together with a chain of retail bookshops; Hong Kong is
renowned as a base for the dissemination of Chinese communist
propaganda throughout the world. Particular attention
is paid by the communists to the large Chinese communities
in South East Asia, at which large amounts of cunningly
slanted propaganda are directed. During confrontation the
communist publishing organisations concentrated on the
production of blatant propaganda and volumes of MAQ's
Thoughts. The bookshops displayed inflammatory material
in their windows and a number were subjected to raids by
Business declined and bookshops were deserted,
Police.
even by their regular customers, one of the major
publishers being forced by lack of business to close its
retail outlet in the centre of town. Business diminished,
not only locally but also overseas. The C.P.G. was not
happy with this state of affairs and local publishing
organisations were instructed by China in September, 1967,
to concentrate on development of their trade, particularly
overseas, rather than getting themselves involved in
political troubles in Hong Kong. Senior officials in the
communist publishing field realise that they have a long
hard struggle in front of them, but, to some extent, they
have a ready made market for their goods in the overseas
Chinese communities all over the world which are
anxious for news of China.
32.
At present a reorganisation of local publishing
circles, in which all concerns will come under a joint
administration, is in progress. While this appears to
be designed primarily as an economy measure, it should
make also for greater working efficiency, which in turn
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will result in improved production and distribution of propaganda.
Nevertheless, it is unlikely there will be any remarkable upsurge of
business in this area in the foreseeable future. At present there are 9
communist
printing works in the Colony and 5 publishing houses which
operate 14 bookshops. In addition there are a number of privately owned
bookshops which retail communist literature.
COMMERCE
33.
Subversion by trade has long been a favourite
communist tactic. In Hong Kong, as we are dependent
for our very existence upon supplies from China, the communists have a
very powerful weapon with which to subvert the Government. It is,
however, a double edged
weapon in that the withholding or disrupting of supplies
would undoubtedly have a greater effect on the poorer
sections of the community i.e. the very people who the
communists are trying to win over. Such a move would,
also reduce the economic value of the Colony
of course,
to the communists, if conducted for any prolonged period.
34.
The economic advantages which China obtains
from her trade in and through Hong Kong have been
detailed on numerous occasions and it is not proposed to
repeat them again here (brief figures are at Appendix
'E1).
Suffice to say that this trade, which had shown
a substantial yearly increase since 1961 and has
represented an increasing percentage of total Colony imports, was
seriously affected by confrontation. with China from May to September,
1967, showed a decrease
Trade
of 45% in imports compared with same period in 1966. There were some
improvements in the period from October
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through to December, 1967, but there was still a reduction
of some 14% in imports from the previous year. Now that
violence has ceased, however, the trend towards increased
trade can be expected to continue, subject to conditions
in China permitting.
35.
There is little doubt that the reversal in the
upward trend of trade which occurred last year caused
considerable concern in Peking and, as long ago as September
of last year, there were reports that the C.P.G. had
ordered its local agents not only to recover lost ground,
but to make every endeavour to increase the former level
of business. The Export Commodities Fairs, which are held
in Canton in the Spring and Autumn of each year, have,
to some extent, been affected by the Cultural Revolution
in China but if conditions in Canton settle down, now
that the Provincial Revolutionary Committee has been
formed, it is expected that this year's Fairs will be
bigger than ever.
36.
The communists have some 48 retail companies
in Hong Kong with numerous branches throughout the
Colony which act solely as outlets for goods imported
from China. These stores suffered a large drop in
business during the early stages of confrontation and
many of their employees were engaged in acts of violence.
Over the past three months there has been a steady
improvement in trade; many of the stores are practically
back to their pre-confrontation level of business and
the low prices offered in these shops will no doubt
continue to attract an increasing number of customers.
37.
Virtually all local firms having trade with
China are members of the communist controlled Chinese
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General Chamber of Commerce, which currently claims a
membership of 4,000. In addition to providing facilities
for local merchants involved in the China trade to
maintain contact with various C.P.G. organisations, the
Chamber is used for the entertainment and cultivation
of non-communist businessmen. As the fortunes of the
Chamber are linked closely with trade between China and
Hong Kong its activities and influence can be expected to
increase as the amount of trade from China rises.
38.
Although employees of communist commercial
concerns were used in some of the earlier demonstrations,
it quickly became apparent to the communists that their
clerks were not suitable for street fighting. It is
unlikely, therefore, that this category of employee will
be used in any future violent demonstrations The main
danger presented by the local communist commercial
concerns is the steadily increasing control which they
exercise over the import, storage and distribution of
food and other essential supplies from China. They are
moving towards a complete stranglehold in this sphere
which poses a serious potential threat to the Colony.
BANKING AND INSURANCE
39.
The communist banks in Hong Kong have always
played a significant part in financing Chinese trade
with countries outside the communist bloc, and in the
In addition, they procurement of foreign currency.
provide facilities through which local organisations
can be subsidized, and subversive and intelligence activities,
both locally and overseas, can be financed. They provide
a major channel through which remittances from overseas
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Chinese and from residents in Hong Kong are transmitted
to China. There are at present five C.P.G. owned banks
and seven C.P.G. state/private banks in Hong Kong which
between them control 53 branches throughout the Colony.
The business of the banks was affected, to some extent,
by confrontation but not on the same scale as in other
communist spheres. The annual report of the Bank of
China for 1967, for instance, showed a decline in
deposits of 18.8% compared with 1966, and there was slight
decline also in the value of remittances to China handled
by the Bank, a reversal of the regular increases of
previous years. Arising from confrontation insurance
business was also poor, falling some 34% below the level
anticipated. Already, however, business is recovering
rapidly and on present indications it would appear that
the banks can expect a steady expansion of their interests
in the future. It is quite probable that additional
branches will be opened in the newer residential areas in
an attempt to ensure that the communists maintain, if not
increase, their share of the local banking and insurance
markets.
+
40.
The unsuitability of bank employees for street
demonstrations became apparent to the communists during
the initial disturbances and it seems unlikely they will
be used in any future violent activity. However, communist
financial manipulations and attempts to undermine
international confidence in the Hong Kong dollar could
present a serious threat to the Colony, but the effect
this would have also on the communists own interests
would seem to make such action unlikely.
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41.
Culture, or what passes for culture in a
Chinese communist society, is an important facet of the
local communist organisation. Cultural activities are,
in effect, no more than an additional channel for
propaganda.
Members of communist cultural organisations
did not play a major role in confrontation although some
employees of communist film companies and theatres were
involved in early street demonstrations and isolated
acts of violence. Since confrontation began the three
major local communist film companies have not produced
any full length films and at present are experiencing
difficulties in finding suitable scripts, which will be
passed by the Hong Kong Government censors and yet, at the
same time, will not run the risk of being condemned as
revisionist or anti-MA0ist by the authorities in China.
The communist film world suffered a number of setbacks
during confrontation; several of their major stars left
the Colony and others have been detained by police. In
order to effect economies and tighten control over the
companies, a joint administration is being effected and
this should in the near future produce greater working
efficiency.
42.
The communists currently control four out
of a total of 97 licensed theatres in the Colony (one
other had its license revoked by Government in 1967).
Regular stage performances, which are invariably well
attended, are given at two of these theatres. Films
currently being shown are re-runs of China produced
films and as such do not attract capacity audiences.
The communists also control a well equipped film studio
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which provides the necessary facilities for production
and a film distribution company which disseminates local
and China produced motion pictures throughout the world.
At present, it seems likely that once the reorganisation
within film circles has been completed, film production
will be resumed but it will be a long time before they
will regain their pre-confrontation influence.
SPORTING AND MISCELLANEOUS ACTIVITIES
43.
A number of associations in the Colony are
under the control of communists, the largest being the
Hong Kong Chinese Reform Association (C.R.A.) which,
just prior to confrontation, claimed a membership of more
than 2,000. Shortly after confrontation began, the
activities of this association declined rapidly and,
following the arrest and detention of its Secretary in
July, 1967, it became more or less moribund. There have
been attempts, over the past two months, to revive
the association and these are meeting with some degree
of success. However, out of the current claimed
membership of 1,700, only some 300 members take any
active part in the association's activities.
44.
There are, also, three communist controlled
sports associations which between them have a claimed
membership of 1,260 and three musical associations
with a claimed membership of 1,000. These bodies
have been virtually inactive since confrontation and
are only just resuming limited activities. It is
estimated that less than 25% of their members are
taking any active part and it will be some considerable
time before they can hope to regain the membership level
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which they had a year ago.
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