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Reference: GEN/14/368/50
Page No. 1 of 28 Pages,
Copy No. 38 of 40 Copies.
Special Branch,
Hong Kong Police.
Date: 5th March, 1968.
F348
CHINESE COMMUNIST CONFRONTATION WITH HONG KONG GOVERNMENT
ASSESSMENT OF RECENT ACTIVITIES AND FUTURE CAPABILITIES
INTRODUCTION
The Special Branch paper GEN/14/368/16 dated
15th January, 1968, examined future communist policy and
tactics in Hong Kong. From that study it was clear that
all available hard intelligence indicated the Chinese
Authorities in Peking were re-asserting direct control of
communist activities in Hong Kong. Further, that the
present Peking policy was to conduct a long term political
struggle, without the use of violence, aimed at eroding
the position of the Hong Kong Government and increasing
communist influence here, while at the same time enjoying
the economic benefits of the Colony. It was considered
that local militant elements might continue to initiate
isolated incidents but it seemed unlikely that violence
would receive support from local communist leaders here
in the face of direct instructions from Peking to the
contrary.
2.
The paper concluded that the Hong Kong
Government was faced with a long term insidious campaign
during which the communists would endeavour:-
a)
to consolidate their ranks and improve
morale;
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10170, B.P. 117
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b)
c)
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to intensify their indoctrination programme,
making extensive use of the thoughts of
MAO Tse Tung;
to maintain a strong anti-Government
propaganda campaign, staying on the fringe
of the law;
d) the press apart, overtly to comply with the
law, thus avoiding as far as possible,
direct clashes with Government;
e)
f)
to continue and intensify attempts to
subvert and vilify Government Servants,
particularly the Police Force; and
to initiate a concerted campaign to widen
their base of support among the general
public, taking up and exploiting, whenever
possible, grievances in all spheres of
society.
The purpose of this paper is:-
a)
to assess the capability of the communists
to conduct this campaign successfully;
b) to examine the methods so far used in
pursuance of their aims; and
c)
to give some idea of the success, or lack
of success, which they are meeting •
GENERAL
4.
Over the years, and especially since 1949
when the C.P.G. came into power, the local communists
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have spent much time, money and energy building up their
presence in various sectors of the community. They have
sought to ingratiate themselves with members of the general
public, particularly by appealing to their national pride.
This structure has been disrupted in varying degrees by
Government action arising from confrontation and many
members of communist organisations have severed their
connections. The communists have too, by their actions,
isolated themselves from the rest of the community and
in so doing, have created an ugly public image. However,
their loyal supporters are dedicated men who should not
be underestimated; they have been tried and tested and
their loyalty has not been found wanting. Nevertheless,
in general terms, there is little doubt that the last
nine months have taken a serious toll of the strength of the communist movement in Hong Kong, particularly in the field of labour (Figures of estimated communist strength are at Appendix 'A'.)
5.
The principal tasks now facing communist leaders are to build on the nucleus remaining, to recover lost ground and finally to expand. They realise this revival and expansion will be a long term project, taking a very considerable time, perhaps years to accomplish to their satisfaction. In the circumstances, and subject to caveats mentioned later in this paper, it seems unlikely that they will be prepared to have a planned head-on confrontation with Government again until they have obtained a base of public support much wider than that obtaining prior to
May, 1967.
UNITED FRONT ACTIVITIES
6
The communists are already making renewed efforts
/to.....
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to ingratiate themselves with certain sectors of the
public, particularly the low-paid and under-privileged, in an attempt to increase their influence and regain a following from people who are not members of their
organisations.
They are seeking to do so through the medium of a united front campaign which is being carried out largely by propaganda but sometimes manifested by practical demonstrations of assistance on the ground. However, at the present time, the violence of last year is too fresh in most people's minds for this "smiling
face" campaign to have much success. Nevertheless,
memories tend to be short and if there are practical advantages to be gained by falling in behind the communists it is quite likely that the communists may start to regain
some of their lost ground.
7.
The principal issues on which the "smile campaign" have been based so far have been salinity of
water, devaluation, the offer of free rice from Kwangtung
and assistance to fire victims. The attacks on Government
in respect of water salinity, which were followed by distribution of "fresh water" in the urban areas by members
of various communist organisations, were designed to
prove to members of the public that the communists were
interested in their welfare. The "fresh water" was
obtained mainly from public stand pipes in areas where
there was little salt content in the mains supply and,
to a limited extent, from C.P.G. vessels arriving from
China. Disappointingly for the communists, public response was poor, despite continuous publicity in the communist press, thus indicating that the communist propaganda campaign, at least on this issue, was having
/little.....
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little effect.
Additionally, there is evidence that the
in
communists themselves were unhappy about their inability, for reasons not yet clear, to establish a comprehensive system of distribution. The salinity issue is now, fact, fast dying out, having seemingly gained little or
nothing for the communists.
8.
The devaluation of the local currency, linked with claims of increased unemployment and a rise in the cost of living, has been a major propaganda theme in recent weeks. These attacks have been interspersed with general criticism, including deliberate misrepresentation of Government's policy in various fields, particularly with regard to resettlement and relief for victims of natural disasters. Such issues will no doubt remain a feature of communist propaganda, to be repeated from time to time. They illustrate how the communists will support, and if necessary misrepresent, any subject which they consider will improve their public standing.
9.
At present the main communist effort is centred
around the offer of 5,000 tons of rice from China for free distribution to "compatriots" in Hong Kong. Originally this rice was scheduled to be given to unemployed workers and to genuinely needy families. massive propaganda campaign was launched to attract registration of potential recipients. There is some recent indication that this campaign may not have achieved the success desired in that the categories of people entitled
There is to register have been considerably widened.
little doubt that if this rice is imported into the
Colony its distribution will be accompanied by powerful propaganda designed to show the local communists in the
/best.....
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best possible light and to illustrate to the local
populace the concern which the "Mother Country" has for
them. Nevertheless, it is considered unlikely that
this gift, in itself, will attract many new supporters
to the communist cause, because there is a general
awareness that their aid invariably has strings.
CONSOLIDATION
10.
Proceeding hand in hand with this united front
activity is a concerted movement within communist
organisations in all spheres to consolidate their ranks
through political indoctrination. Study classes,
exhibitions of "the application of MAO's Thoughts" and
variety shows have become a regular feature of all
communist organisations' activities since December, 1967.
Visiting groups to China by their members have also been
resuscitated, during which they attend political meetings
and discussion sessions. While this campaign of constant
indoctrination may possibly strengthen the beliefs of the
politically committed and produce a group of fanatics who
will be prepared to undertake any allotted tasks to
further the communist cause, it is unlikely that it will
do much to win over any new adherents, unless fence sitters
can be persuaded that more practical support is forthcoming
from China. There are, in fact, indications that some
members of communist organisations, particularly the older
employees, are already tiring of this incessant
indoctrination. But these malcontents represent only a
minority of the communists and generally speaking, morale
in communist organisations has been steadily rising.
This can be attributed, in part, to the reduction in
Government action against communist organisations sinoe
/cessation.....
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cessation of the violent phases of confrontation.
11.
Another step being taken by the communists is
an attempt to demonstrate to the public that they no
longer have anything to fear from Government. "Sing
song" and picnic groups to the N.T., where revolutionary
songs are chanted, and very minor and short lived
demonstrations are being staged for propaganda purposes.
While participants in these activities are possibly in
technical breach of the law they are not committing
serious offences.
These groups call attention to
themselves in a potentially dangerous manner and create
a difficult problem for the police.
12.
At the same time events of the last few months,
and particularly in recent weeks, such as the payment of
fines by the suppressed newspapers, indicate that local
communist leaders are not prepared to press for a direct
clash with Government, and will back-down when it becomes
clear that a firm stand is being taken. In this way
they ensure that the morale of their rank and file does
not run the risk of further defeats and that Government
is prevented from taking legal action against them.
13.
It is apparent that the confidence of the
communist supporters is steadily growing, despite the fact
that, so far, their united front activities do not appear
to have achieved much in the way of material success
The improved morale in local communist circles together
with continued MAC Thought indoctrination and anti-
Government propaganda will constantly present the danger
of outbreaks of incidents, despite the wishes of the
communist leadership to avoid the use of violence,
/LABOUR......
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LABOUR
14.
In an urban society a communist movement, to
be effective, must have a powerful representation in
the trade union field. In Hong Kong the communists
spent years building up their representation in public utilities, transport and other key industries as well as in Government. In many of these areas, the communist
union was the only channel of representation open to
employees.
These unions, well organised and capably run
by a band of dedicated full-time officials, had the
objective of attaining sufficient strength in vital areas
to paralyse the Colony if and when required. With the
onset of confrontation it appeared to many of the
communist leaders, particularly in the labour field,
that their moment of glory had arrived. Nevertheless,
when they called on their supporters to stop work they
were bitterly disappointed in that, on an average, about
half their members in many of the vital areas ignored
their call and continued working, despite intimidatory
threats and actions. When the people who did stop work
were dismissed the communists lost, virtually over-night,
a powerful machine (figures at Appendix 'B'). For example,
of the claimed communist union membership of some
6,400 employees in Government, only 1,632 answered the
call to stop work and at present it is estimated that
of those remaining, only 325 are participating in union
activity. These represent less than 1.7% of the
19,415 low-paid employees in the Government Departments
affected by work stoppages. Communist union
representation in public transport, the utilities and
the dockyards showed an oven greater loss. Pre-
confrontation the communists had a claimed support of
/more.....
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more than 10,000 out of 29,000 workers in these spheres.
Over 9,500 people were dismissed in June, 1967, following
their refusal to resume work and active communist union
members employed in these areas are now estimated to be less
than 300. From these figures it is clear the communists
are not in any position to take concerted action from
within Government or vital industries. They do, however,
still retain considerable strength in some sectors of industry, particularly in textiles, the metal industry, shipping and distributive trades. However, the amount of
actual support that these unions would obtain should they
wish to strike on purely political grounds is open to
considerable doubt, particularly in the light of the poor
response to the strike call in other areas in June, 1967.
15.
increases
The union members who refused to stop work are
currently being subjected to pressure from their former
workmates to return to active participation in union.
affairs. One means of inducement is the claim by the
communist unions that they are agitating for wage
on behalf of members and so far demands have been submitted
by representatives from unions of Government employees and
some unions in the transport field. The communists'
efforts to take the lead in asking for wage increases are
however, being forestalled in some instances by similar
demands by right-wing unions or by awards being made by
management before demands are, in fact, presented.
the efforts of the communists to attract back to the
unions former members who severed connections during
confrontation are, so far, meeting with very limited
success, the slow trickle of former members willing to
return, is likely to continue, and possibly increase,
/if....
While
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if no alternative channels of labour/management
discussions are established. Many firms are establishing joint consultative machinery to fill the vacuum left by
the dismissal of communist union members and there is
little doubt that this will go some way towarde foiling the
efforts of the communists.
16.
The workers who are currently in receipt of
strike pay from the communist labour movement are
probably presenting the communist leaders with their
biggest headache.
It must now be apparent to them that
they have no hope of reinstatement.
The local communist
movement cannot continue, on an indefinite basis, to
pay out nearly $5,000,000 a month in strike pay and it
is unlikely that China will be prepared to foot the bill
much longer. There are already reports that some strikers
have been instructed to find themselves work, and this
has caused considerable discontent amongst those affected, which could become widespread amongst communist supporters if the "return to work" move became general. The strikers
are the hard-core nucleus of the communist labour movement
and any attempt to get them to return to work, without
the compensation they have been promised by their leaders,
may have a serious effect upon their morale.
17.
Although the ability of the communists to stage
effective strike action has diminished considerably,
they can, if they so desire, create and maintain an air
of tension, by laying on demonstrations at will using
only a handful of supporters.
While the tactics they used
in the early days of confrontation of paying hoodlums
to create trouble, may not be so effective in the
immediate future, in that these sections of the population
/now.......
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now have a greater respect for the forces of law and
order, the possibilities of minor incidents escalating
quickly because of the participation of non-communist,
semi-criminal elements must grow as time goes by and
memories fade.
EDUCATION
18.
The communist schools in Hong Kong originally
aimed at producing graduates to go to China for higher education. This policy changed from 1959 onwards when
more and more of the graduates from the schools turned
to the local employment market. Since then, the schools
have followed a more or less normal local school
curriculum and there has been a steady expansion in
the facilities they provided for education. The cheap
places offered by the schools and the good organisation
and discipline they maintained, proved attractive to
many parents and consequently the school authorities had
no difficulty in filling their places. Just before
confrontation some 46 schools were assessed by Special
Branch to be communist controlled with a total student
enrolment of 19,598. Plans were in hand by a number
of the schools to provide an additional 2,000 places.
19.
Students from communist schools were not used a
great deal for subversive activity in the early phases
of confrontation. However, during the later stages they
came into increasing prominence, particularly with
regard to the planting of bombs, both hoax and real.
The schools abandoned their normal curriculum and
concentrated on political studies. They withdrew
their entries from the Hong Kong Chinese School
/Certificate...........
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Certificate examination and eliminated their normal
school examinations and tests. During confrontation
there was a fall off in the enrolment in communist
schools, particularly in the vocational and evening
classes and while it is possible that some of this fall
off was accounted for by people who did not wish to go
out at nights, there is little doubt that at least some
of the students who stayed away did so because their
parents no longer wished to have them educated in
communist schools. The latest indications are, however,
that the communists are having some success in building
up their primary and kindergarten sections,
20.
The main effect of confrontation on school
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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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
/organisations....
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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
/non....
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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
/December...........
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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
/will.....
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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
/General.
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·
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29170 8.7, 217
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Page 21
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
/Chinese........
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Page 22
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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/CULTURAL.....................
:
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CULTURAL CIRCLES
Page 23
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
/which....
:
-
A
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17
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Page 24
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
/which....
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which they had a year ago.
Page 25
CONCLUSIONS
45.
From this paper it will be seen that in the labour field the communist strength has been decimated
in the essential services, that a considerable number of
union members remain in key industries and the Government Service but that they are almost completely dormant at
the present time. The student population of the communist, schools has decreased slightly and once again more attention is being paid to academic study. The planned communist expansion in this field has been stopped at least for the time being. The communist press has become largely discredited but its propaganda still reaches a large section of the population. Other communist
propaganda media have suffered reverses during the last
nine months but are gradually recovering their former position. This applies also to local communist commercial and financial organisations.
46.
+
The communists have in hand a widespread
united front campaign in an attempt to win back their
supporters who deserted them during confrontation and
to expand their influence in the Colony. Basically, there
is now in being a battle for the "hearts and minds" of
the population between the communists on the one hand
and Government on the other. Much depends upon the ability of Government to win this battle and maintain
the confidence of the people and to persuade them to continue standing up for themselves in resisting the
mixture of wooing and veiled intimidation on the part
of the communists. At all times the image of "big
/brother.....
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>
SONITE *.7, 417
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Page 26
brother on the mainland" looms large and has a very definite bearing on the reactions of the local populace. However, arising from the considerable confidence which the public gained during confrontation, not only in themselves but in Government's ability to contain communism, it may be, of course, that they are now better equipped to withstand communist pressure, whatever its form.
47.
So far the communist efforts to widen their base of support do not seem to be meeting with much success. Nevertheless, the morale of their own supporters is rising steadily and the local communist movement should not be underestimated; it has shrewd and clever leaders and although their machine was disorganised
and badly battered by its experiences in confrontation, it is by no means broken and still represents a considerable security threat to the Colony.
48.
With their present support it is considered
most unlikely that in the immediate future the communist leaders will have either the desire or capability to stage a major prolonged confrontation with Government on the ground or to mount effective strike action. They do, nevertheless, have the potential to maintain a certain degree of tension and, at the same time, the capability to conduct a long term insidious campaign to undermine Government. Nevertheless, it may well be many years before they can hope to achieve the same degree of influence they had in the period immediately prior to confrontation; in some areas they may never reach the same position again.
/49......
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1170
49.
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Page 27
As always, everything depends upon the attitude
of China. At present the policy of the Peking Government is to pursue a non-violent long term campaign to undermine
the authority of the Hong Kong Government. Throughout
the last nine months support from China for local
communists has been restricted to propaganda and limited
financial aid, and this seems likely to continue so long
as the economic value of the Colony remains an over-
riding factor in the eyes of Peking. However, there can
be little doubt that the halt to violence called by
Peking in December, 1967, resulted in frustration and
resentment among those local militant communists who had
hoped for an early "Macau type" victory over the Hong
Kong Government, and this may be shared also by some officials in Kwangtung. So far there is no evidence to
suggest that they are not under firm control, but they
could well exploit a local incident to the extent that
China, might, albeit unwillingly, give her blessing to
a resumption of violence. Any serious deterioration of
the situation would clearly cause the C.P.G. to reassess
her policy towards the Colony and a military threat could
develop. In the final analysis, however, if China wished
to apply hard pressure she has many options not yet used
which could force the Government of Hong Kong to abdicate.
Additionally, once it became clear to the local populace
that China was giving whole hearted support to the local
communists' "struggle", there is little doubt that a
large number of the "fence-sitters" would line up behind
the communist cause.
50.
There has been no attempt to assess the
counter-measures which should be used by Government to
TOR SECRET
/combat.....
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Page 28 of 28 Pages
combat the long-term communist threat as they are
considered to be beyond the scope of this paper. It is
felt, however, that there is a need for a serious study
to be made of the resources currently available to
Government for this purpose and whether or not these
need re-deploying or intensifying to obtain the desired
objective, namely containing the threat posed by the
local communists.
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GEN/14/36B/50
ESTIMATED COMMUNIST STRENGTH IN HONG KONG
-
SECRET
Unions
Paid-up/active membership
Schools
Students
Staff
Press & Publishing
Commerce & Banking
APPENDIX 'A'
1967 - 1968.
March 1967 March 1962
60,065
33,204
19,598
18,227
800
778
1,570
1,570
7,000
7,000
510
510
Film companies & Distributors
Associations
Paid-up/active membership
Chinese General Chamber of
4,351
Commerce
4,008
Chinese Reform Association
2,100
300
Athletic Associations
1,260
300
Music & Dancing Associations
1,000
250
Total:
98,254
66,148
203(60 G.P. 314
SECRET
GEN/14/368/50
1967
-
1968
COMPARATIVE LABOUR FIGURES
GOVERNMENT DEPARTMENTS
APPENDIX 'B' (i)
0.7. 121
CONFIDENTIAL
Department/Sub- Department
Approx. Labour Force
Communist Union Membersnip
Pre-Strike
Now
Dismissed
Pre-Strike
Now
Currently Active
Post Office
1,688
1,668
151
450
310
NIL
G.E.M.E. (P.W.D.)
2,421
2,230
264
710
510
40
Waterworks (P.W.D.)
2,325
2,256
279
778
588
30
Marine Department
1,187
897
312
469
200
NIL
U.S.D.
12,470
10,500
470
3,150
2,750
200
Resettlement Dept.
500
463
37
80
60
5
(Labourers)
Civil Engineering
1,500
1,381
119
780
660
(P.W.D.)
50
CONFIDENTIAL
Total:
22,091
19,415
1,632
6,417
5,078
325
I
.
i
.
.
I
F
GEN/14/368/50
COMPARATIVE LABOUR FIGURES 1967-1968 PUBLIC TRANSPORT, UTILITY AND DOCKYARDS
APPENDIX 'B' (ii)
BUT TOGE
6.7. 19
CONFIDENTIAL
Company
Labour Force "Pre-Strike Now
Dismissed
Communist Union MemLarchip
Pre-Strike
Now
Currently Active
Kowloon Motor Bus
7,227
5,000
4,907
3,100
50
NIL
China Motor Bus
2,280 1,400
1,273
600
15
25
Tranway Company
1,630
1,230
679
640
30
NIL
H.K. & Yaumati Ferry
1,800
1,700
115
350
220
100
Star Ferry
582
454
200
260
40
NIL
H.K. Telephone Co
3,900
4,180
170
900
600
NIL
H.K. Electric
978
848
136
680
380
30
China Light &Power Co.
1,895
1,500
659
600
200
NIL
H.K. China Gas Co.
548
384
164
450
200
4
Kowloon Docks
3,000
2,300
530
1,000
200
Taikoo Docks
3,580
3,800
186
1,700
1,500
Kowloon Wharf
1,645
1,621
530
400
150
8 8 8
60
30
50
CONFIDENTIAL
Total:
!
29,065
24,417
9,549
10,680
3,585
299
GEN/14/368/50
APPENDIX 'B' (iii)
COMPARATIVE LABOUR FIGURES
-
1967-1968
HARBOUR AND SHIPPING FACILITIES
G.F. 133
Facility
Labour Force
Pre-Strike
Now
Dismissed/ Strikers
Communist Union Membez ship
Pre-Strike
Now Curently Active
Lighterage
2,000
2,000
100
389
389
200
Coxswains
5,000
5,000
350
915
915
100
Cargo Supervisors
2,500
2,500
600
1,312
1,312
600
Ship Paint Scrapers
3,000
3,000
200
239
239
200
Stevedores
3,000
3,000
1,000
CONFIDENTIAL
CONFIDENTIAL
1,000
(working in
ccmmunist companies no communist union in this field)
550
(in H.K.)
Seamen
75,000
75,000
450
26,727
26,727
Total:
90,500
90,500
2,700
29,562
29,582
2,650
T
GEN/14/368/50
COMPARATIVE LABOUR FIGURES 1967-1968
LIGHT INDUSTRY
APPENDIX 'B' (iv)
** 79% * HETERO
Company
Labour Force
Pre-Strike
Now
Dismissed
Communist Union Membership
Pre-Strike
Now
Currently Active
Textile Companies
93,500
93,500
500
14,500
14,000
500
Dairy Farm
1,200
1,000
300
550
250
40
Taikoo Sugar
400
340
74
150
70
10
Shell Co. (H.K.) Ltd.
1,500
1,500
NIL
700
700
NIL
Total:
96,600
96,340
874
15,900
15,020
550
CONFIDENTIAL
1
r
+
i
11
}
י
CONFIDENTIAL
GEN/14/368/50
C
APPENDIX 'C'
COMPARATIVE ENROLMENT FIGURES FOR COMMUNIST SCHOOLS
►
1967-1968.
8083230
G.F. 195
Kindergarten
Primary
Secondary
Vocational
Apl.
Jan. Change Apl 167 *68
•
Jan. Change] Apl.
Jan.
'67
'68
'67
168
Change | Apl. 167 168
Jan
4
Change | Apl '67
Total
Jan.
168
Change
Middle Schools (12)
426 447
+21 4184
4295
+ 112 4800
4613
187
9410 9356
54
Primary Schools and Special
253
233
-
20 2112
1734
378
2365 1967
398
Classes (10)
Night Schools (7)
W.C.E.P.A.
CONFIDENTIAL
Schools
CONFIDENTIAL
64
36
-
28
659 543
- 116
485
321
- 164 1208
900
300
3866
3768
98
318
356
38
906
474
432
5090
4598
-
492
1402 1300
- 102
1402
1300 102
-
123
106
17 123
106-
-
17
Total Schools
(46)
679 680
+ 111628 |11134
-
494 5777
5512
265
1514
901
-
61319598
18227-1371
including night
schools (11)
N.T. Schools (4)
Correspondence & Fine Art Schools (2)
--
GEN/14/368/50
C
COMPARATIVE FIGURES
-
1967-1968
CIRCULATION OF COMMUNIST NEWSPAPERS
APPENDIX 'D'
S.F. W
April 1967
March 1968
Ta Kung Pao
27,000
17,000
Wen Wei Pao
24,500
18,000
New Evening Post
44,000
53,000
Ching Po Daily
74,000
44,000
H.K. Commercial Daily
80,000
54,000
Cheng Wu Pao
42,000
27,000
Afternoon News
13,000
10,000
Tin Fung Daily News
10,000
10,000
H.K. Evening News
35,000
15,000
349,500
248,000
CONFIDENTIAL
I
F
I
|
CONFIDENTIAL
GEN/14/368/50
CONFIDENTIAL
C
F
O
APPENDIX 'E'
VALUE OF IMPORTS FROM CHINA
1964-1967
G.F. 10
1964
1,969.9 million H.K. $
1965
1966
2,322
million H.K. $
2,769
million H.K. $
23% of Colony's imports 26% of Colony's imports
27% of Colony's imports
1967
2,282
million H.K. $
22% of Colony's imports
CONFIDENTIAL
FAN
With the Compliments of the
¡ RECEIVED IN
Political Advi ARCHIVES No.31
Hong Kong
- 5 APR 1968
FDI1
TS 1/3/1168/47
TOP SECRET
345
January 25th, 1968.
(44
I enclose a copy of a paper prepared by the L.I.C. on the present policy and tactics of the Communista here and possible developments in the future. It has been seen and approved by the Governor.
2.
I am sending a copy to James Kurray in the Foreign office who was present at our discussions on the paper. I
200 an also sending a copy to Reg Hibbert in Singapore.
(T.A.K. Elliott)
trany.
I have been hearing this in my
Much the same grommet
imm
auspatch from the Soumer
dorfling
1.5. Carter, ssq., 0.V.o., Commonwealth office, London, 8,#.1.
Certusl
to thish the C.O. whe
rfly, both to be usculature wi
Whitehall in que
CAMAGE.
По
TOP SECRE
By Are the
F
|
RECEIVED IN TOP SECRET.
ARCHIVES No.31
- 5 APR 1968
File Ref: GEN/14/368/16
Page No. 1 of 12 Pages Copy No.2 of 30 Copies
Special Branch,
Hong Kong Police.
344
Date: 15th January, 1968.
Communist Confrontation with the Hong Kong Government
Possible Future Communist Policy and Tactics
Introduction
Since the start of confrontation the communist
effort in Hong Kong has followed a series of phases, some
more violent than others. It now seems clear that one
major phase has just ended and we are about to enter
another. This paper examines briefly the present stage
in confrontation and communist policy for the immediate
future; it also attempts to assess the tactics the
communists may use to implement their policy.
Present Situation
2.
The Police action against the trade unions, which
started in mid-July, disrupted the communist labour
movement to a large extent. Members were apprehensive
about visiting union premises in any large numbers and
many leaders went into hiding. Communist trade union
representation in Government Departments, essential services
and the key industries of the Colony was severely
depleted by the dismissal of employees who stopped work in
support of the communist strike call. However during
the last month there has been steadily increasing
activity in union premises, the number of members
attending meetings is growing and efforts are being made
to attract to the unions those members who did not obey
/the.....
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*6008179-67. 317
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the calls for strike action.
Page 2
Many union leaders have
emerged from hiding and efforts are now underway to
rebuild the Federation of Trade Unions control structure
which existed prior to July, 1967.
3.
While much emphasis has been placed on the role
of students by the communist propaganda machine, they were involved only to a relatively small extent during the
early stages of confrontation. A number of inspections
of the major communist schools by Education Department
passed off without any serious breach of the directives
which had been issued to the schools by the Director of
Education but from September onwards there was an increasing use of students in "bomb" incidents, culminating in an explosion in the Chung Wah School which led to its
closure by Government. Political indoctrination and
subversive teaching in the schools is continuing at a high level and there is little doubt that they are fostering a
hatred for any form of lawful authority in the Colony.
Nevertheless, there have been a number of pointers
recently that the schools are returning to something like
pre-confrontation conditions; fees have been paid for a
small number of students to enter the Hong Kong Chinese School Certificate examinations, despite open criticism by the schools of the "slavish examination system", and one Headmaster has openly proclaimed that, although his school
still supports the "struggle", he has no intention of
abandoning academic studies.
4.
Although three of the nine communist newspapers
are currently suppressed, the communists still have a
forceful propaganda machine. Of late, the newspapers have been somewhat more moderate in their terminology, but
/articles.....
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articles in breach of the law are still published and
their virulent anti-Government propaganda continues
unabated. Communist press circulation has slumped badly
(from 340,000 pre-confrontation to 207,000 now) and there
has been a corresponding swing of readers to the anti-
communist press. In an attempt to remedy the situation
the newspapers have decided to give less prominence to
confrontation news.
5.
Of the other propaganda media, probably the
most effective at present is Radio Villa Verde in Macau
which broadcasts attacks on the Hong Kong Government
several times a day. However, these have toned down
since the middle of December in line with the local press.
In general, Hong Kong affairs attract little attention
from the China Mainland broadcasting stations, but from
time to time Radio Canton and the Kwangtung Provincial
Station, put out propaganda broadcasts on the Hong Kong
situation. The use of "mosquito" newsheets containing
inflammatory material has declined considerably but
propaganda items, such as calendars bearing anti-salinity
cartoons and pamphlets, resembling banknotes, attacking
devaluation, are still distributed frequently to the
public.
6.
A return to more normal conditions in communist
banking and commercial concerns has been apparent for
some time. Since the 1st October celebrations communist
officials have attempted to resume at least some of their
former contacts in local business circles and return to
pre-confrontation banking transactions. The more blatant
propaganda material has disappeared from many China Products
shops where trade is now believed to have risen to about
/70%......
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317
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Page 4
70% of the pre-confrontation level.
7.
Since the first week in December there has been
a marked decline in bomb incidents, and no genuine
explosive devices have been planted since 25th December.
The number of hoaxes has also decreased sharply, accompanied
by an absence of any reference to violence in the local
communist press.
8.
Since the conclusion of the border negotiations
there has been no further serious incident, and the
P.L.A., which seems anxious to maintain a firmer control
in the area, has made some attempt to restrain the
militant elements in Chinese Territory. However minor
incidents, including frequent stone throwing, continue
and could lead to a serious clash.
9.
Gestures of support for the local communists by
the Chinese authorities have continued to be mainly of
a moral nature rather than tangible assistance. The
"Kwangtung Provincial Committee to Support the Hong Kong
compatriots", formed in Canton in November, has done
little but make promises of unspecified assistance,
although initially providing a useful boost to communist
propaganda within the Colony.
Communist Policy
10.
As early as September, 1967, there were definite
indications that the more moderate local leaders,
including some C.P.G. appointees, and a faction in China,
felt that the violent stage of confrontation should come
to an end. Indeed immediately prior to the 1st October
celebrations, acts of violence almost ceased. Waves of
/bomb.
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GJ. $17
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Page 5
bomb incidents resumed soon after, and it appeared that
the militant elements were, once again, the predominant
force. However there were significant signs that the
communist authorities were becoming more aware of the
economic realities of the situation; the supply of water
was resumed on schedule at the beginning of October,
C.P.G. banking and commercial concerns received instructions
from China to restore normal business and the long term
nature of the struggle was given more emphasis in
statements of local communists published in the press.
11.
At the end of October the majority of the senior
C.P.G. appointed local officials left the Colony for
China for what has become a protracted stay. At the
beginning of December secret and delicate sources indicated
that other officials, who had paid short visits to Canton
in November, had studied important policy papers on the
confrontation whilst in the city. The papers apparently
advocated some form of de-escalation, but it was clear
that these officials felt that explaining such a policy
to the masses involved considerable difficulties. A few
days later the Deputy Director of the local N.C.N.A.
Branch, who had been in China since October, returned to
the Colony. Reliable intelligence, at that time, indicated
that he had been in Peking and had later held an important
meeting in Canton on confrontation with a senior member
of the C.P.G., probably CHOU En Lai. Immediately
following his return, the communist press ceased to refer
to violence. It is now known that he had received a
directive from the authorities in Peking that local
violence must cease, and a long term "political" struggle
was to be waged against the Hong Kong Government, based
on the intensified study of MAO's works.
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/12.......
09170
4170 4ər, 317
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Page 6
12.
By the third week in December the new policy.
line was being passed to the lower ranks in all fields of
communist influence. The explanations for this change in
tactics varied according to the extent to which the
audience had been involved in violence; these ranged
from a blunt admission that the use of force had been
wrong in local circumstances, to statements that a victory
had been won and consequently emphasis should now be laid
on the political aspects of the struggle. Local leaders
went to great pains to ensure that the new policy was
implemented, and the recent marked decline in bomb
incidents, and the absence of any form of violent
demonstration has shown that a measure of control has now
been enforced.
13.
A further and perhaps more important development
was revealed in a recent statement by a local communist
Leader to the effect that the authorities in Peking are
now exercising direct control over communist activities
in the Colony. He asserted also that the new policy of
non-violence had been brought about by economic factors.
The latest instruction from China, apparently issued at
the beginning of January, calls for an urgent and
comprehensive report on the progress of confrontation
during the last two months, including a genuine survey of
public opinion on this matter. There are strong grounds
for believing that this report will be used in Peking as
a basis for formulating future policy on Hong Kong •
14.
Reaction to this new policy among communists in
the Colony has, of course, varied. The initial feeling
was one of bewilderment, followed by some resentment
among the more militant cadres, but by a sense of relief
/among..
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Go88570 - Kur. 117
+
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Page 7
among the moderates that the violent phase of confrontation
had ended.
The next phase of confrontation
15.
It is too early even 'to guess what decision the
Peking Government will reach as a result of the report
referred to in para. 13 above. So long as the Cultural
Revolution continues in China and particularly in
Kwangtung, it will be difficult for them completely to
disengage from opposition to the Hong Kong Government.
It is clear that the local communists here have no
intention of abandoning their long term aim of obtaining
a victory over the Hong Kong Government similar to that
achieved in Macau. Hard intelligence shows that the
communist leadership realise that they must consolidate
their own ranks, and obtain a wider measure of support
from the local population if any progress is to be made.
16.
It seems likely that, for the time being,
communist organisations will stay within the law, at
least overtly, in an attempt to avoid giving Government
a reason for taking action against them. By means of
study groups, family visits, and extensive propaganda
they will seek to re-assure their supporters they have nothing to fear from Government, in an attempt to lure
them back to active participation in communist activities.
The exception to this overt "compliance with the law" is
likely to be the communist press which, although
considerably milder in tone than it was at the height of
confrontation, is still publishing articles that are in
breach of the law. These newspapers may well feel that
they are safe from Government action providing they do not
/increase..............
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67. 117
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Page 8
increase their current level of attacks on Government.
The press remains not only the major propaganda weapon
of the communists, but also their main channel of
communication with "the masses" and it is known that they
have been instructed to present more credible propaganda
in an attempt to revive their daily circulation.
it is stressed that these policies may change quickly
when the report referred to in para. 13 above has been
assessed in Peking.
17.
However,
A period of intensive study of the Thoughts of
MAO is underway, with study groups, large scale meetings
and exhibitions at communist premises. This campaign will
continue and expand, at least in the foreseeable future;
the aim in the words of a senior local communist, is to
"make the whole Hong Kong community red" and "Hong Kong a
socialist society and the population a big school of the
Thoughts of MAO Tse Tung", The probable results of this
campaign, in practical terms, are debatable, but it should
not be forgotten that the continual study of the "little
red book" breeds fanatics with no respect for law and
order.
18.
The "friendly hand and the smiling face" will
become a feature of a united front campaign to remove the
communists from their present isolated position in the
community and to increase their influence over as wide a
sector as possible. Prominent citizens will be the target
of social and business approaches, and among the workers
moves are underway to persuade them to return to the
unions. The communist labour movement can be expected to
resuscitate its many welfare benefits, and is already
conducting a wage increase campaign, in conjunction with
/the......
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KP. 217
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Page 9
the communist press. Emphasis will be placed on the
exploitation of social and economic grievances, both real
and alleged, and the communists will support any issue
which they feel will ingratiate them with the public and
arouse antagonism against the Government. In the latter
case Government must expect to be misrepresented and its
employees subjected to subversion and vilification, in
particular the Police Force will be a main target for
attack.
19.
The workers who obeyed the various communist
calls to strike will, undoubtedly, present the communist
leadership with one of their main problems. Paying out
"strike" money on an indefinite basis, will present a
serious and continuing drain on their resources and there
is good evidence that the "Struggle Fund" is virtually
exhausted. Strike payments are being made on a more
selective basis and the recipients are being used for
much of the united front work in labour circles but
obviously some new source of finance must be found in
the immediate future or the workers encouraged to find
alternative employment.
The latter move could, of course,
be a further set back as it would represent an open
admission that the "general strike" had failed.
20.
It is possible that isolated incidents may be
initiated by militant individuals in the Colony; the
necessary encouragement could be provided if current
efforts to restore order in Kwangtung fail and widespread
disorders start again in the Province. However, short
of such a breakdown in Kwangtung, which would inevitably
weaken Peking's prestige locally, it seems unlikely that
violence will receive support from leaders here in the
face of direct instructions from Peking to the contrary.
/21.......
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0900179 5, 8, 313
11
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Page 10
21.
Communist tactics as outlined in paras. 15 to
19 would present Government with a long term and insidious
threat to the morale of its employees, and to the
confidence of the public in its ability to maintain
effective rule in the Colony. A policy of non-violence
and the avoidance of direct conflict with Government
can largely deny the use of legal means to restrict
communist activity. A complicating factor is that the
Chinese have made it fairly clear that they intend to
treat the British diplomatic staff in Peking as hostages
for our future conduct here. None the less any overt
defiance of the law must be dealt with firmly and
expeditiously and communists should, as far as possible,
be subject to normal legal process.
22.
The next phase in confrontation could thus
present Government with more complex problems than were
faced in the past. In particular there will, undoubtedly,
be considerable pressure to relax emergency restrictions,
release prisoners, both those convicted of offences and
those detained under Emergency Regulations, and the
cessation of violence will engender a false feeling of
security. It would, however, be inadvisable to begin to
dismantle our emergency structure until we are much
clearer about the direction in which the communists are
moving.
23.
On the other hand Government must seek, as far
as possible, to deny the communists any genuine grounds
for exploitation. Clearly social services and industrial
relations will be of major importance in this respect.
However, it is emphasised that the grievances which
the communists may seek to exploit will be typically
/Chinese.....
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4800176 p.7. 117
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Page 11
Chinese and in the local context, rather than orthodox
labour grievances by normal standards. Countering the
communist propaganda machine, will be a major factor in the
future struggle to win the hearts and minds of the
population of the Colony.
Conclusions
24.
All available intelligence indicates that the
authorities in Peking are now in direct control of communist
activities in Hong Kong. The present declared communist
policy is, in the long term and without the use of
violence, to increase their influence here and erode the
position of the Hong Kong Government while, at the same
time, enjoying the economic benefits of the Colony.
25.
In the next few months, the Hong Kong Government
will be faced with an insidious campaign of subversion,
during which the communists will endeavour:-
a)
to consolidate their ranks and improve morale;
b)
c)
d)
e)
to intensify their indoctrination programme,
making extensive use of the thoughts of MAO
Tse Tung;
to maintain a strong anti-Government propaganda
campaign, staying on the fringe of the law;
the press apart, overtly to comply with the
law thus avoiding, as far as possible, direct
clashes with Government;
to continue and intensify attempts to subvert
and vilify Government Servants, particularly
the Police Force; and
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Page 12
26.
f)
to initiate a concerted campaign to widen their
base of support among the general public, taking
up and exploiting whenever possible grievances
in all spheres of society.
To counter this new phase of communist
confrontation the Government must, in addition to
maintaining law and order and its own authority to the
maximum extent possible, continue steadily with carefully
considered policies designed to effect genuine and
lasting improvements in standards of living, especially
amongst the poorest classes. Particular care will be
necessary, however, to avoid policies which endanger
the economy or which cannot be reasonably fully sustained
if economic conditions turn adverse. In all other ways,
endeavours should be made, where possible, to avoid
generating genuine public grievances or causes of dispute,
including trade disputes. The public relations machinery
must be geared to meet the challenge of communist
propaganda, but must not solicit public support by
encouraging expectations which cannot or may not be
fulfilled.
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T..
ET
Commonwealth Office
S.W.1
272
RECEIVED ARCHIVES N
Dear James,
14 DEC 1967
FD!!
12 December, 1967
I enclose draft notes which we are proposing to provide
for the use of our Minister in Cabinet on Thursday, 14 December,
should he decide to report on the situation in Hong Kong.
I should be grateful if you would let me know by 3 p.m.
to-morrow, Wednesday, 13 December, whether you have any
comments.
J. Murray, Esq., Foreign Office.
Yours
Bunny
Perised version
Revi
of parar 5 to and
Sent to The Carlo co by hand
TO
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13
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!
TO. CRET
ET NOTES FOR USE OF THE BRIPETARY OF STATE
IN CARTERET I THURSDAY, 14
HONG KONG
Internal Situation
There has been a steady decrease in the use of genuine bomba,
but greater selectivity in the choice of targeta. The police have
been the main target for bomb attacks and other acts of violence.
But in a recent report the Governor states that police morale remains
high and unaffected.
2. The use of communist schools for subversion and for illegal and
violent activities continues to cause concern. One such school has
been closed as the result of an explosion on the premises where
unsophisticated devices were being made.
3. The Communist press in Hong Kong, though avoiding incitement to
violence, continues to pour out anti-British propaganda and to make
maximum use of alarmist rumours and local discontents (e.g. the
level of salinity in the water supply, devaluation). We have been
given, both in Hong Kong and Faking, clear warning that we touch the
C.P.G.-owned newspapers at our peril.
There have been only minor incidents on the frontier.
Attitude of China
5. There are a number of straws in the wind which indicate that
China may be looking for an accommodation on Hong Kong:
(1) The not unsatisfactory outcome of the Hong Kong border
talks.
(11) The tone of the Hong Kong Communist press has moderated
in the last few days.
(iii) Local Communist press circles have put out feelers that may indicate they wish to avoid the inevitable
confrontation that would arise from legal actions taken against Communist newspapers.
(iv) There le information (from a delicate source) that, in
Canton (and likely therefore to be parallelled in Peking also), there is a faction advocating a "dismounting" of the confrontation in Hong Kong .
(v) There has been a slight improvement in Sino-British
relations, in that the Chinese have matched in Peking our gesture in lifting some of the restrictions placed on the Chinese Embassy staff in London. Exit visas have also been granted for one member of our Mission's staff and his family.
bis refs (who has
haul a suurema humming
Shanked mm)
/(vi)...
TO.
ET
6.
(vi) In recent diplomatic exchanges the Chinese have
emphasised that "the Hong Kong problem" must be solved before there can be any improvement in Sino-British relations.
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But it is too early to say whether this will lead us anywhere.
There are no signs that the Chinese are taking effective steps to
moderate the activities of the local Communiste. And it seems
unlikely that the Chinese will back down on Hong Kong unless they
can point to some "victory" even if only a "paper" one.
7.
Meanwhile we are considering with the Governor and our
Charge d'Affaires in Peking -
(a) means of avoiding provocation in taking necessary action
to deal with Communist activities in Hong Kong until
(b)
Chinese intentions become clearer, and
must seat cons
the modalities of opening up some dialogue with the
Chinese if that is what they are looking for.
Extract from K.
(67) 2nd Manding, held 22 Sept
Lud
Derso -to
TOR SECRET-
HONG KONG:
1) kr. Hellers
25/
Fex 218 Enter by 20ce-
TOP SECRET
GENERAL SITUATION, AND PROPOSALÉ FOR ASSISTANCE
5/m 27.
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The Committee had bofaro then a nemorandum by the Connonwealth V'Socretary (K(67) 3) to which was annoxed a list of various projects and
RECEIVED. JIN ARCHIVESS 1969. 30
ZOET 1967
FOIL!
+
measures through which the United Kingdon could demonstrate support and goodwill for Hong Kong during the present troublos. Boforo considering this nonorandun the Committee discussed generally the current situation In the Colony.
Ineral Situation
THE COMMONWEALTH SECRETARY, welcoming the Governor of Hong Kong [Sir David Tronoh) to the mooting said that in the last wook or so there had been a lessening of tension in Hong Kong, and the Hong Kong/Chinoso bordor had boon relatively oala, though with some increase in illogal immigration. The indication was that the Coramist loaders in Hong Kong tad decided to reduce torrorist activity during the period leading up to the Chinese celebrations at the beginning of October, and concentrate instead on propagating Haoist doctrine. It could not howovor be assumed that the Communist loadership could control its supporters in Hong Kong. Terrorist incidents, sono of them sorious in consequences to life and limb, continued on a substantial scale. boreover thero was a risk of a
resurgence of activity whom the Governor arrived back in the Colony on Sunday 24th Septorbor,
on
The food situation had improvod, and thero was an oxpootation of a resumption of rice supplies from China on a scale that would nako good the provious arrears. The Hong Kong reservoirs now had enough water to last the Colony, given a sovore rationing syston, through the next dry scason even without a resumption of supplies from China; thoro was as yot no indication whether the Chinese would resume supplies as usual on 1st October. Dospito all difficulties the level of economic activity remained high, with exports in July and August substantially above the leval of the corresponding nonths in 1966; similarly tourist notivity was
10 per cent higher than last year.
At the provious nooting of the Committee roforonco had been rade to a possible nood to impose the death penalty for certain torrorist offancos. This question had boon discussed with the Governor during his prosent visit to this country, and would be considorod further in the light of dovolopments in Hong Kong. If necessary a proposal would be put to the Committoo in due courso.
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Hong Kong was a unique and anomalous Colony with a largo and donsoly-
paokod population procariously poised on the edge of the vast territory of Communist China. It was ovident that the overwhelming majority of its population supported the British action and the present administration in the Colony. The maintenance of this support was crucial to the Colony's position, and it was against this background that the Committee should lator consider how support for the Colony could appropriato bo demonstratod,
SIR DAVID TRENCH said that the present reduction in Chinese pressure was a lull, not a thar. Rindanentally the position of Hong Kong renainod unchanged: it was a hostage to the Chinese, who could gain control if they so wished either by axtornal aggression or by internal subversion (though the latter would nood to bo bettor managed than the prosont anatour offort), Wo did not know whether the Chinese wished to obtain control:
it was thoir declared intention to do so but it was not clear whether those
who mado such declarations hal, or would continue to have, offoctivo control within China. On norits thoro wore powerful reasons why China should loave Hong Kong as it was: the assumption of control would daŋago China Goonomically, present hor with a large administrativo problen and possibly have far-reaching international repercussions. Our ability to resist Chinose pressure dopended partly on Chinoso intentions but partly on our success in naintaining confidonoo within Hong Kong on the adequacy of tho security forces, on the Colony's economio prospects and on the attitude of the United Kingdon towards the Colony. Ovor the last ton-to fiftoon years thero had boon sono erosion of Hong Kong confidence in the United Kingdon as the rosult of a number of zotions which we had takon, which though individually thoy might be justifiablo but cumulatively woro rogarded in Hong Kong as indicating an unsympathetic United Kingdon attitudo towards Hong Kong's position as a depondent torritory. Examples were the terms of
salo to Hong Kong of the naval dockyard and the discontinuance of joint
user arrangements for the Kai Tak airport. Despite causos of friction such as these Hong Kong's loyalty towards the United Kingdon ronnined strong, and the policies porsued by the Hong Kong Government ware broadly accoptable to the local populace. It was howevor important, especially during the prosont difficult period, that the United Kingdom should tako all possible action to restore and onhanoc Hong Kong confidence,
--2-
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In discussion it was suggested that considerations of self-intarest as much as of loyalty bound Hong Kong to the United Kingdom, and that Hong Kong aritioåsns of United Kingdon policies towards tho Colony night bo overstatod. The European community in Hong Kong was provincial in character, with a narrowly confinod social life in which grievances tended to bo talked over and nado much of, The Governor and his officials had achioved a notable success in porsuading the Hong Kong Exocutive Council to accept our proposals for an increased dofonoe contribution from Hong Kong; in asking the Colony to noot an oloment in the cost of naintaining forces in internal socurity we vero doing no more than appoaling to the self-interest of the population. It was, however, tho view of the Governor that Hong Kong like other dependent territorios, did not accopt an obliga- tion to contribute to the cost of its defence, whothor external or internal, and had rejected the proposition that the Colony should make a contribution specifically to the cost of internal socurity; the increased contribution which was still the subject of sone resentment in Hong Kong, was regarded thore as ex gretia assistance to tho thited Kingdon in nooting defence
costs.
The Committoo -
(1) Took note of the statements by the Commonwealth Secretary
and the Governor of Hong Kong about the ourront situation in Hong Kong, and of the points mado in discussion.
Assistance to Hong Kong
The Committee then turned to consider the Commonwealth Soorotary's nonorandum (K(67) 3) about measures of support for Hong Kong.
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS said that his recent visit to Hong Kong had convinced him that the key to our ability to hold We the situation in Hong Kong was tho maintenance of public confidence. needed not only to maintain public moralo and the will to resist Chinese pressure, but also to do all we could to protect the Hong Kong econory from serious damago. An coononic rocossion in Hong Kong, in addition to its serious internal consoquenoos, could woll bring about a situation in which the Colony bocano financially dopondont on the United Kingdon. The Annox to X(67) 3 describod various projects, which had boon discussed with the Governor of Hong Kong, through which we could demonstrate our dotormination to fulfil our responsibilitios towards the Colony. The nost important of those politically (though its economic advantages wore loss cortain) was the proposed cross-harbour tunnol linking Hong Kong
Island and Kowloon,
extensions at Kai Tak airport;
Othors included:
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по
joint educational projects; assistance with cortain additional military oosts; and tho provision by United Kingdon ovorase posts of help for the Hong Kong Export Credit Guarantee Corporation. The memorandum was circulated at this stage in order to inform tho Committee of various possibilities which wore being pursued by the Commonwealth Office; decisions wore yet called for. During his visit to Hong Kong in October he proposed to examine further the possibilities for help under the various hoads, and also the prospects for labour reforms and social service development.
In discussion of the proposals for assistance to Hong Kong, the following points were made
(a) Hong Kong was at prosent prosporous and would continue so, provided that political difficulties did not disturb economic development. The Colony hold sterling balancos in this country amounting to £350 million in all, of which rather more than half wore official holdings. In tho last six months private holdings of storling had fallen off by sono £35 million, but the increase in Hong Kong official holdings had more than offset this docrosso. Although part of those suns was required as backing for Hong Kong currency, there was no shortage of liquid funds
available to finance development in Hong Kong.
(b) The proposed cross-harbour tunnel was a 16-17 million project; the likely contractors wore Costains, to whon a monthly penalty payment of £30,000 was now due until a contract was signed. £10 million of the cost was to be raised by a bank loan which would be ultinatoly guaranteed
The by tho Hong Kong and United Kingdon Govorimonts in equal shares. remaining £6 million would be found from local funds, including sono private investment, Our attitude towards this projoot was likely to be regarded in Hong Kong as a touch-stone of our dotormination to support the Colony, The Treasury had agrood in principle to our guarantoeing our £5 million of the loan, subject to thero being no drawing on tho £10 million loan boforo it was cortain that the remaining £6 million
nooded would be nado availablo from other sources. The Hong Kong
Government sinilarly was anxious to ensure that other nonoy beoane available for the projoot. If the current discussions anong officials did not produce an agreement, the Hinistor of State for Commonwealth Affairs would raise the nattor with the Hong Kong authorities during his visit with a viow to a settlement; a Treasury brief would be proparod
for the purposo,
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(c) Extensions to the runway and other facilities at Kai Tak airport at a cost of about £10 million would soon be needed if the airport was to
handle larger and faster aircraft. In view of the importance of the airport to the British Overseas Aircraft Corporation (BOAC), in respect both of control, of cabotage rights and as a bargaining counter in
negotiations for air traffic rights, it was proposed that the United Kingdon night provide £34 million towards the total cost in the form of a
grant. Failing such assistance it was unlikely that Hong Kong would carry out the extensions. It was, however, doubtful whether the United Kingdon would feel justified in according priority to expenditure of the order indicated for this purpose, particularly since much of the benefit would accrue to other airlines and to the tourist industry in Hong Kong. However the proposal would be examined in detail by the Departments concerned,
(a) The proposal for United Kingdom capital assistance towards further technical training facilities, which could play a valuable part in regional development in the Far East, had yet to be examined in detail.
(e) The suggestion had been made that the cost (anounting to about £150,000) of wire for a second boundary fence should be borne by the United Kingdon, the labour and compensation costs being borne by Hong Kong, The amount involved was small relative to the importance attached to such a gesture in Hong Kong, particularly after the agreement to increase defence contributions. If a United Kingdon contribution were agreed it would not be appropriate for it to fell on the defence vote.
(f) we had not so far folt able to accede to the Hong Kong request that our oversea posts should supply information to the recently established Hong Kong Export Credit Guarantee Corporation. Our refusel to do so caused sone resentment in Hong Kong, where it was regarded as a failure on our pert to treat Hong Kong as a dependent territory for whose external affairs we were concerned. The problem was in part that Hong Kong was also a commercial competitor: this inevitably limited the assistance that we could appropriately supply, the more so since our own exporters supplied information to our oversea posts on a basis of confidence which would be undermined if they suspected that information so supplied might be made available to Hong Kong businessmen, Furthermore, the Diplomatic Service was under heavy pressure to reduce costs by cutting overseas staff, and it was therefore no time to require posts to take on extra work, Nevertheless
(97793)
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the request should not be rejected out of hand but investigated in detail
in order to determine what were the Hong Kong requirements and how far it
was practicable and desirable for us to meet then, In the first instance,
the proposal should be discussed further during the Minister of State's forthcoming visit to Hong Kong.
-
{૪}
There were a number of other minor respects in which Hong Kong felt that it was not being fairly treated by the United Kingdom for example, it was said that United Kingdom officials in Hong Kong did not pay income tax whereas we required payment of tax in the converse situation. Complaints of this kind would be investigated by United Kingdor: Departments, if necessary at Ministerial level, if particulars were supplied by the
Hong Kong Government.
The Committee
-
(2) Invited the Financial Secretary, Treasury, to arrange for
a brief on the cross-harbour tunnel project to be supplied to the Minister of State for Commonwealth Affairs for the purpose of his forthcoming visit to Hong Kong.
(3) Took note that the Minister of State would discuss further during his visit to Hong Kong, and would arrange for
further interdepartmental official discussion of, this and other projects for assistance to Hong Kong listed in X(67) 3.
-6
TOP SECRET
THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMEN
The circulation of this paper has been strictly limited.
It is issued for the personal use of.
RECEIVED IN
ARCHIVES No. 31
- 3 AUG 1967
キロリー
OPDO(DR)(67) 51
2nd August 1967
TOP SECRET
CABINET
MR.K. Bolland
Copy No.
12
Mad Wilger * FAN
DEFENCE AND OVERSEA POLICY (OFFICIAL) COMMITTEE
DEFENCE REVIE," WORKING FARTY
ра
7
मोन
HONG KONG
Note by the Secretaries
The attached extract from a recent special assessment by the Joint Intelligence Committee ia circulated for the information of the Working Party.
(Signed) R.L.L. FACER
M.J. MONI.NTY
Cabinet Office, 5.7.1.
2nd August 1967
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9.
At the same time the Chinese authorities have still not replied to
requests for additional water supplies in July and it now seens probable
that they are using this as a means of pressure. In addition the fact that buyers are being asked by the Hong Kong branches of Chinese Government trading agencies to recommend alternative ports of transhipment for any goods they purchase suggests that the Chinese authorities agree that overseas
buyers of Chinese goods should be encouraged to by-pass Hong Kong. It
is clear that the local Communists are seeking to undermine economic confidence in Hong Kong and are ready to accept the consequent economic damage to their own interests; and that they are supported in this by the Chinese Government
authorities.
TOP SECRET
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INWARD TELEGRAM
TO THE COMMONWEALTH OFFICE (The Secretary of State)
FROM HONG KONG (0.A.0.)
Cypher
D. 12 July 1967
R. 12
1020Z
173
на
06224
RECEIVED IN ARCHIVES No6, 3}}
NO.
26 JUL 1967
IMMEDIATE
TOP SECRIT No.1013
N.R
ре
FA
Addressed to Commonwealth office Repeated
POLAD Singapore No.233
(C.O. please pass IMMEDIATE)
My immediately preceding telegram.
Hong Kong Confrontation.
Isolated cases of violence and threats to Europeans have been reported, though it would be wrong to describe the focus of present activities as "anti-European". There has been talk of the preparation of terrorist methods for use against such targets as the police and Europeans.
2. As yet no terrorist/assassination organisations are known to exist, as such, in the Colony. If, however, Communist operations become even more violent the existence of an organised network, readily available supplies and plenty of trained manpower close at hand in China would make their establishment relatively simple. In planning for the future, therefore, we must take into account the possibility of a straight terrorist campaign developing in a comparatively short time, directed against the police, Government servants and those co-operating with the Government.
(Passed as requested)
(Advance copies passed to Meaars. de la Mare, Wilson, Bolland, Denson and Commonwealth Secretary)
Distribution
-
P.8. to Minister of State
Sir A. Galsworthy
Mr. W.S. Carter
Mr. Russell
Mr. JerroN
Mr. Gaminara
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= =
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Mr. Denson
Mr. Foggon
/FO/CO
TOP SECRET
FO/CO (IPGD)
(IRD)
Treasury
Export Credits Guarantee Dept. Ministry of Defence (Room 7365)
1+
Room 7163)
Room 51 31)
Board of Trade
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(CRE 4)
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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
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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 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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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.
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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
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H
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tt
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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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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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