Treasury
Export Credits Guarantee Dept. Ministry of Defence (Room 7365)
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Room 7163)
Room 51 31)
Board of Trade
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(CRE 4)
Mr. Littlejohn Cook
Mr. J.H. Peck
Mr. D. Hawkins
Mr. C.P. Rawlinge Mr. Henn
Major Koe
M.0.2
Mr. J.A.B. Darlington
Mr. B.E.P. MacTavish
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(MIS DOCUMENT IS THE PROPERTY OF THŇA BRITANNIC MAJESTY'S GOVERNMENT
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Date 8th Jun- 1967
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VISINS OF COLONIPALTH KINIETERS TO DISCUSS FAR FAST
DEVENCE, JUNE 1967
Hong Kong
pa.
16/v
The Prime Minister has indicated that he would prefer to express
his appreciation personally to Mr. Holt for the action taken by the
Australians in recent wheat negotiations with China to support of our
position in Hong Kong (Commonwealth Office tologram No.1149 to
Canberra).
This would be a suitable starting point for any discussion on Hong Kong.
The exchanges with the Australians on this question indicate that they
will in this context ask about our policy on trede with China if the
Chinese continue to make trouble for us in the Colony.
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2.
They will also be interested in our assessm at of:-
(a) the present situation in the Colony;
(b) future Chinose intentions towards it;
(c) our prospects of maintaining our positio
there.
3.
In the context of the discussions about raductions in our Fer
Bestor forces, the Australians are bound to ask about the strength of
the military forces we intend to loop in Hong Kong.
Talking Points
1.
Trade
We are most appreciative of the Australian action in holding
up the conclusion of the agreement to export 2 million tons of wheat to
China, at a time when the disturbances in Hong Kong wore at their
height.
Wo did not in any way want to frustrate the deal, but we did think there
would be some advantage in holding up the signature of the crrcement
/purely
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puroly because of the timing. Wo think the action the Australians
were able to tako might havo a salutazy offoot.
2. Wo do not want to interfero with current trado and we have no
major change of policy on trade with China in mind. But a study now
being undertaken by officials on future policy on Hong Kong is
tackling, among other things, the question of our trade policy towards
China in the event of continued and strong Chineso pressure against the
Colony. We will keep in touch on this subject.
Situation in Hong Kong
3. Disorders have coasod and the present tactics are to organise
tokon stoppages of work and to continue with the subversive propaganda
campaign.
4. After an initial dofeat the Communist loadorship in Hong Kong
is in a state of some disarray and may bo awaiting a signal or
instructions from Peking.
5.
Meanwhile the Governor is gradually but firmly taking stops to
counter illegal and subversive activities (o.g. the postor campaign).
Ho is treading warily so as not to affor undue provocation to Poking.
Chinese Intentions
6. There is no evidence that Peking instigatod tho present troubles
or that there has been any major change in Chinose polioy towards
Hong Kong.
7 There are indications that Poking is undocided about how to
handle the situation; this roflaats perhaps the conflicting pressures
in the central authorities and the growing confusion in China at tho
prosont time. A rocent article in the Poking Poople's Daily onjoins
the "compatriota" in Hong Kong to await the call for action.
8. There is a danger that confusion and indocision in Peking
may load to local initiativos by artromists,
Future Prospects
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Futuro Prospects
SPEONIAL
9. If there is no basio change in Chinese policy, we do not think
that local action would be pressed to tho point that our position
would bo prejudiced. The present firm but rostrained action against the
activities of the local Communist should contain the situation.
10. There is, however, always the danger that local oxtremists could
by their own initiativo escalate the situation to a point which must
force on Poking a policy of intervention and all-out confrontation.
This would bring about a vory gravo situation.
Dofonce
11. It is our intention to maintain an adoquate garrison in Hong Kong
and arrangomonts to provide sea and air cover from Singaporo have beon
made.
Backround Noto
Trade with China
1. At the height of the disturbancos in Hong Kong an Australian
dologation was in the Colony negotiating a now whoat doal with China (2
million tons). Ho asked the Australian Government to do what they
could to delay the deal, sinco somo uncertainty on this scoro might
bring
home to tho Chinose the possiblo oconomía consequonoos of their actions
in Hong Kong. If tho daal had gone through quickly at that juncture
it might well have encouraged the Chinose to baliove that it was
"business as usual", dospito what they were doing in Hong Kong.
2. Although roluctant to interfore with the puroly commoroial
oporations of the Australian hoat Board, the Australian Government
arranged postponement of the conclusion of the doal until aftor
disturbances had ceased in Hong Kong. In addition, it was arrangod that
tho dolegation should say to the Chinoso whom the contracts woro signod
that the Australian Govorimont was concerned about dovelopmonts in the
arda and, if throats to scourity and stability persisted, would wish
to rovior: their export policios in relation to China. In our viow
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this action was most helpf
ld have a salutary offcct, Wo had
no largo deals of our own at that timo through which wo could havo
brought prossure to bear.
3. The Australians wanted to know what wo oyrselves woro proposing to do
about our trade with China. Wo oxplained that wo had not askod thom to
deny whoat to China but only to slow down negotiations to help us over
the immediate crisis in Hong Kong. Wo told them that wo woro studying
the question of our trade with China. Mr. Holt may onquire further about
this. Ho might be told that this is ono of the mattors boing studied by
officials who are roviowing future policy on Hong Kong
and that we will keep in touch with him on the subject.
Situation in Hong Kong
4. What bogan as minor disturbancos on the 6th May, arising out of a
labour disputo, was on tho 11th May takon up and oxploited by lonal
Communists with the aid of hooligan olamenta, some of whom were paid. A
campaign was then mountod as a direet and deliberato challcgo to the
authority of the Hong Kong Govarnmont,
5.
Disordors coased on the 22nd May, the Communist loadership in Hong Kong
having sufforod an initial dofcat. Since thon it has oschowod
violent methods and hast-
6.
(a) organised a sorios of tokon stoppagos of work,
notably in public utilities and governmont departmonts;
(b) continued its anti-Government subvoraivo propaganda
campaign through the Press, postore and public addrose
systems mounted on Communist-owned buildings.
By imodiato disciplinary action against ite om staff, the Hong
Kong: Governmont has sought to load other employors into taking
action against those stopping work. Action has boon taken uhder
omorgoncy
powore against the use of public address systoma and tho display of
posters;
thore has been no offcotive Communist countor-action to those moGSUrDB.
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/As yot
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As yet the Governor has takon no actiên against the Prose or to daport,
dotain or bar the entry of Communist leaders, under powers which it has
boon agrood ho might uso if noccssary.
Uso of these powors might be
considerad in Poking as a direct challengo and could make it more
difficult for Poking to withdraw from a policy of confrontation.
7. Thero er indications that the loadorship which was in somo die-
array aftor the failure of its violent methods in the face of strong
public disapproval aro not merking tino ponding a signal or instructions
from Paking.
Chinose Intentiona
8. Thore is no ovidonee that the disturte "oos woro deliberatoly started
by Poking. They appear to have resulted from local initiatives and to
have boon tho product of a more militant atmosphere among the Communiste
in Hong Kong responding to tho "cultural "ovclution" in China. But
Poking has supported the "domanda" of the local Communists and continuos
to do so; and, whatever the origins of the disturbances, Falding is now
closely involved.
9.
There is no ovidonos of any basic change in China's policy of
maintaining the status quo. There are indications, however, that
Poking is undecided about how to handle the Hong Kong issuo: in an
articlo in the Pos le's Daily of 3rd Juno the "compatriots" voro
onjoined to await the call for action to evorthrow British imperialism
in Hong Kong.
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10. This hositancy could bo the preludo to a slow and prolongod proocas
of backing down but it could oqually rofloat the conflicting prOSSUTOS
in Poking. On the one hand there are the factors which support prosont
Chinoso policy notably the undounted economie bonfit of Hong Kong
to China (about 40% of hor foreign exchange carnings comos from Hong
Kong and 18 important in financing the grain importe) and the fact that
pullo opinion in Hong Kong has reacted with surprising firmose to
Communist action, showing the Chinoso that they cannot hopo for a choap
/Macao-typo
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Macao-type victory. On the otherhand there are factors tending
towards an oxtremist policy; the commitment of Poking to the "fivo
domanda"; the pros: ures of the cultural revolution call for strong
cction; and the considerable confusion in the prosant stage of the
cultural revolution (with the "modoratos" under strong attack and
Peking not alwys able to oxort its authority). In such a situation
thore is a possibility that local groups or londore nay take anti-
Hong Kong initiativos ovon against the vishos of the contral
authorities. Once any action is takon Poking; could fool bound to hack
its supporters.
Futur Prospɔcts in lions Kong
11.If Poking decidos to back its supporters in an all-out confrontation
to drive us out of Hong Kong thon our position would be gravoly
offootod.
Public confidenco and moralo would collapse before long and thoro would
bo a rush to come to terms with the ottor sido.
12. If the presont situation continues, with a controlled low-lovol
of activity dosignod to annoy and harass us, thoro soons no reason
why wo should not be able to hold on in Hong Kong indefinitaly (or at
least until much nearor the time when the lease of the Now Tormitorios
axpires in 1997). Ho think this can be done ovn if the Chinoso resort
to such mopsuros as cutting off food and water supplies, although
thoy ar unlikely to do this oxoopt as part of a policy of all-out
confrontation because it would anko thom unpopular with the mass of the
pooplo. The koy to this situation is the maintenance of public
confidɔnco; and to do this wo must continue to contain the Communist
activites with firm but restrained noasuros, avoiding any action which
would make it mora difficult for Poking to disonçago itsolf fron
its prosont involvonont.
13. There is, of course, the dangor that, in the absence of
instructions from the contral authorities or in a situation of
growing confusion in China, loc:l extremista mny oscalato tho
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FRONTAL
situation of their own initiativa. If local action was pushed
to the point that disturbances resulted in hoavy loss of life or
bloodshed, it is most unlikely that Poking could s tand asidoc.
The situation could rapidly dovolop into ono of all-out confrontation
(paragraph 11 abovo).
Defence
14. At the end of 1966 our military foroos in Hong Kong consistod of
62/rds major units, a flight of fighter aircraft and three coastal
ninoswoopors. In accordance with Dofonos Roviow decisions takon that
your, the fighter aircraft wore withdrawn in January of this year and
the three constal minoswoopers are scheduled to bo withdrawn
in Soptonbar. Altomativo arrangononts to provido soa and air covor
from Singapors are being mado,
15. A decision was takon ih Documbor last yoar to reduce the garrison
by ono major unit in the course of the financial year 1967-68. No
decision was thon takon regarding the cract timing of the withdrawal.
The Ghofs of Staff have this wook rucommended to the Dofenac Scerotary
that, boc^uso of recent development in Hong Kong, a decision on timing:
should be indefinitoly postponod. We had onvisaged that bofore any
announc ́noat was mado about this reduction of one major unit, wo should
giva advanco information to the Governments of Australia, Now Zoeland
and the United States. Sinca wo my now indofinitely postpono a
dooision on the timing of this roduction it is considered that thoro is
no point in montioning it at this #tago to the Australians or the Now
Zoal andors.
Commonwealth Offics,
8th Juno. 1967.
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05714
92)
Cypher
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No.641
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INWARD TELEGRAM
TC THE COMMONWEALTH OFFICE
(The Secretary of State)
FROM HONG KONG (Sir D. Trench)
D. 19 May 1967
14 R. 19
0520Z
Your telegram No.944.
RECEIVED IN ARCHIVES Ne $1
30 MAY 1967
FD1/11
01/1/57
10
Grateful if communications which refer to possible
withdrawal from Hong Kong could in future be graded Top Secret.
Following are my immediate comments on points raised in
2.
your telegram,
3. Your paragraph 3. The policy you suggest is probably wise for a few
days longer, until we can see which way the cat is going to jump
following K.M.G.'s statement. But as a long term policy to be followed
in the face of evidence that their demands are to be pressed home, I
believe it would be very dangerous indeed. It is the policy anybody who
knows the British would expect us to follow and Left-wing plans will be
laid in the expectation that we will behave in this manner. It leaves
the initiative entirely to them, and they will be free to wear us out
trying, with waning public support, to cover their manoeuvres; until
they eventually lead us still trying to avoid provocation when
provocation has become irrelevant from one humiliating position after
another into a Macao type compromise satisfactory to them.
―
4. On the other hand, while their resources in compliant followers may
be great, resources in top leadership and in the means of direction and
control cannot be all that strong. I feel therefore that it is
essential, once we know we are really in for a prolonged struggle, to be
prepared to act more positively. We must,
We must, while following a general course much on the lines you propose,
in addition act selectively and with careful deliberation with the
object both of seizing the initiative sufficiently to keep the opposing
leadership so busy warding us off as to hamper the development of their
plana, and of preserving public confidence in our ability to uphold the
law which is at present being flagrantly and increasingly breached in a
number of dangerous ways.
5. In developing tactics of this kind, which I agree would be a matter
of most careful judgment, (the Communist press, whose present activities
are very dangerous indeed can be tackled, if desired, in other ways than
by prosecution for sedition e.g. the charge might be seditious libel or
suborning the police). I would of course consult you in general terms
about the measures to be taken, but timing too would be of importance
and I would need to have some freedom of action over details.
6. On the question of any dialogue with the Chinese (your paragraph 4),
I feel we must try to use every possible channel available to us and I
am a little surprised you feel the
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presence of Hsieh alone precludes any use of the London channel (your
telegram No.939). Both Hopson and I will have to deal with his type
also, in greater numbers and under even less favourable conditions.
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7. The difficulty with my channels is that contact is far only through
intermediaries (direct contact has been refused) and at the moment there
is no subject for discussion which is likely to be very productive.
Moreover whilst the hotheads apparently remain largely in control of the
local apparatus, contact with the soberer faction offers little that is
useful. Nevertheless, we will of course continue to do our best.
8. Your paragraph 5. The short answer is that in the face of an all-out
confrontation we probably could not last very long. If we are able to
rely on the loyalty of the Police and the confidence of the general
public, we might be able to cope for a month or two although by then the
factors mentioned in paragraph 4 of my telegram No.600 would begin to
operate. I do not think that the risk of China cutting off all our water
and food supplies should be overestimated since the major effect of
doing so would be to injure the interests of the Chinese population here
generally, inqluding the Left- wing's own supporters. Even if Chinese
water supplies were cut off now, we calculate that it should be still
possible to ensure a four-hour supply daily until the period when the
rains would normally be expected. So far as food supplies are concerned,
we now have abnormally large rice stocks and are not dependent on China
for a large proportion of our supply. We should be very badly hit if
Chinese supplies of meat and vegetables were reduced; but my
understanding is that without too long a gap it might be possible to
organise alternative supplies from Japan (though we would almost
certainly need financial help from H.1.G. to pay for it). I am looking
further into the details and will be telegraphing shortly about this.
9. Another effective Chinese threat might be directed against our normal
air and shipping routes. But there is a sea channel into Hong Kong from
the East which does not pass through claimed Chinese territorial waters;
and an attempt to harass shipping passing that way or to interfere with
aircraft flying over the Chinese islands in the Pearl River would seem
to carry very substantial riska of involving China in an armed conflict,
which at present she can hardly want.
10. It is obviously difficult to forecast precisely how long Hong Kong
could survive an all-out confrontation. Clearly, fatigue on the part of
the Police and the Government generally would be a major factor. But on
the other hand it would also affect the Left-wing, unless they were able
at an early stage to secure some resounding success.
11.
The problems of withdrawal, as you say, would be immense without Chinese
co-operation after negotiation; and it would present almost insoluble
difficulties if we attempted to make a headlong flight, behind a strong
screen of force with no regard for the consequences to our international
reputation and obligations. Many Governments have major interests here
which they would hardly be happy to see us jettison on their behalf. In
addition, we should be faced with terrible problems concerning the
security of those Chinese and Eurasians who have been seen to throw in
their lot with us, especially those in the public services and above
all, the Police force whose support would be more necessary than ever in
the period preceding a withdrawal. Any plan for which was not based on
strength and which envisaged
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the removal of the Buropean population while leaving the others to their
fate would involve great risks for the European
population themselves. I need hardly mention the moral arguments against
such a course.
12. But all these are immense problems and it is difficult to discuss
them satisfactorily in telegrams. They really require consultation: but
(although I am fit to travel if necessary) for me to go to England now
would have a most serious effect on morale here: and a visit by a
Minister might be equally dangerous and lay the Minister open to
indignity.
Visit by a senior official or officials would however, seem to me to be
highly desirable now.
13.
Finally, for the moment, the basic practical question ia, what are the
real C.P.0. intentions? During the past week I have seen no evidence to
suggest that they intend to force us out of Hong Kong. On the other
hand, their present actions suggest that they wish to submit us to a
Macau-type humiliation which would establish them once and for all in a
dominating position here and also make it possible to force us to accept
further demands, e.g. for the withdrawals of U.S. ships and the
reduction of U.S. and K.H.T. influence. They are now in a position to
launch an all-out confrontation of Government if they so decided but are
they going to so decide? Was the queer limitation of their organized
action on 18 May to demonstrations at my front gate planned merely to
keep the pot boiling pending receipt of M.M.G.'s reply (which may have
come unexpectedly quickly); was it a "last warning" before a general
attack; or, just possible, was it a face-saving demonstration in a
campaign which is in fact petering out for lack of continuing C.P.G.
support in the face of economic logic and the strongly expressed
condemnation of so many in Hong Kong? I am afraid it is impossible to
say.
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14. C.B.F. has seen and agrees.
(Passed to D.S.A.0. as advance copies for F.E.Department)
Distribution:
P.S. to Minister of State
Sir Arthur Galsworthy
Mr. H.P. Hall
Mr. Carter
Mr. Jerrom
Mr. Russell
Copies also sent to:
P.9. to Prime Minister Commonwealth Office
n
H
E
tt
H
Foreign Office
H
P.S. to Secretary of State Sir Saville Garner Sir Arthur Snelling Sir
Neil Pritchard
Mr. Moreton
Mr. Reed
Mr. de la Mare
Mr. Wilson
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H
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Ministry of Defence Cabinet Office
Mr. Bolland
Mr. Denson
Mr. Foggon
P.3. to S. of 8. for Defence
- D.I.O., J.I.R.
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