FACTORS AFFECTING THE STATUS OF HONG KONG (TO SEPTEMBER 1950)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A003700060003-2
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 27, 2016
• Document Release Date: May 22, 2013
• Sequence Number: 3
• Publication Date: October 4, 1949
• Content Type: REPORT

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COPY NO.. , 137
FOR THE ASSISTANT DIRECTOR
FOR REPORTS AND ESTIMATES
47611
FACTORS AFFECTING THE STATUS
OF HONG KONG (TO SEPTEMBER 1950)
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CENTRAL INTELLIGENCE AGENCY
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71CRET
FACTORS AFFECTING THE STATUS OF HONG KONG (TO SEPTEMBER 1950)
1. Before the end of 1949 it is expected that
the Chinese Communists will have established
effective control over the territory adjoining
the British Crown Colony of Hong Kong.
2. Barring border incidents which could pro-
voke a spontaneous attack, however, at-
tempted invasion, at least before September
1950, seems improbable. In the case of an
attack, the British have announced a deter-
mination to defend Hong Kong and are pre-
paring for that eventuality.
3. At least until September 1950, Commu-
nist policy respecting Hong Kong is likely to
be determined by balancing the factors im-
pelling seizure of the territory against those
impelling maintenance of the status quo.
Among the principal factors impelling seizure
are: (a) the pressure of Chinese nationalistic
sentiment; (b) the damage such action would
render British and, therefore, Western pres-
tige in the Orient; (c) the elimination of Hong
Kong as a Nationalist refuge; (d) the economic
value of Hong Kong as the principal port in
south China; and (e) the prestige which would
accrue to Communist forces upon victory over
the British. Among the factors impelling the
maintenance of the status quo are: (a) the
possibility of using Hong Kong as a bargaining
point for international recognition and trade;
(b) the problem of administration; (c) the
economic benefits to be derived from a stable
Hong Kong under British control; (d) the mili-
tary cost of an attack; and (e) possible Soviet
opposition to a military assault.
4. British reaction to the Communist policy
will be governed by a corresponding set of fac-
tors. Factors impelling the UK to maintain
the status quo are: (a) the hope that a
strongly defended Hong Kong will induce the
Communists to negotiate a comprehensive set-
tlement involving mutual economic and po-
litical concessions; (b) the loss of British pres-
tige in Southeast Asia in the event of with-
drawal; (c) Commonwealth concern over
Hong Kong; (d) public opinion in the UK; and
(e) Hong Kong.'s economic value to the British.
Factors impelling UK withdrawal from Hong
Kong area are: (a) the danger of the Colony
becoming an economic liability if cut off from
trade with mainland China; and (b) the grow-
ing belief that Hong Kong in the long run is
militarily untenable.
5. After the Communists have established a
national government in China, it is antici-
pated that they will initiate propaganda for
rendition of Hong Kong. If the British dem-
onstrate reluctance to recognize this govern-
ment, or refuse to make available the economic
facilities of Hong Kong, the Communists will
probably take retaliatory measures. Up to at
least September 1950, however, such retalia-
tion is more likely to take the form of sub-
versive activity than of armed attack.
Note: The intelligence organizations of the Departments of State, Army, Navy, and the Air
Force have concurred in this report. It is based on information available to CIA as of
26 September 1949.
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SEQi'ET
FACTORS AFFECTING THE STATUS OF HONG KONG (TO SEPTEMBER 1950)
1. Impending Crisis Respecting the Status of
Hong Kong.
Before the end of 1949 it is expected that
Chinese Communists forces will have occupied
Canton and will have established effective con-
trol over the area adjoining the British Crown
Colony of Hong Kong. Meanwhile, British
defenses for the Colony will have been
strengthened substantially in line with strong
British declarations that Hong Kong will be
defended if attacked. Although the Chinese
Communists to date have made no specific
statement of their intentions regarding Hong
Kong, they have publicly stressed their de-
termination to exclude "all aggressive impe-
rialist forces" from China. This determina-
tion, coupled with Chinese nationalistic senti-
ment favoring the rendition of Hong Kong,
indicates that a Communist occupation of con-
tiguous territory will jeopardize the British
position in the Colony.
Threat of conflict between the UK and Com-
munist China over Hong Kong becomes a
matter of concern to the United States pri-
marily because, in the event of a Communist
armed attack on the Colony, the British are
likely to invoke UN intervention and to antici-
pate US aid. With America's strongest ally
thus threatened with a state of war or a
serious loss of prestige, US interests in the
Far East would be involved.
Communist action in regard to Hong Kong
will also be of concern to the USSR, and is,
therefore, not likely to be taken without pre-
vious consultations with the USSR. The So-
viet attitude toward any form of action would,
of course, be influenced by the existing inter-
national situation and by over-all Soviet policy.
2. Factors Governing Chinese Communist Pol-
icy for Hong Kong.
The Chinese Communists are determined to
gain eventual control of Hong Kong. Whether
they will attempt to achieve control imme-
diately or undertake it as a long-term project;
and whether they will seek to accomplish it
by military effort, by subversive action, or
through negotiations probably will be gov-
erned by the following factors:
a. Factors Impelling the CCP to Obtain an
Early Rendition of Hong Kong.
(1) Political.
(a) In accordance with the Chinese nation-
alistic tradition, the Communists regard Hong
Kong as properly a part of China, alienated
to the UK under the "unequal" treaties of ces-
sion of 1842 and 1860 and the lease treaty of
1898. Geographically and historically belong-
ing to China and populated almost entirely by
Chinese, Hong Kong, is considered an unre-
deemed area, which should be recovered by the
revolutionary regime. Submitting to public
pressure, the National Government, during
the final stages of World War II, had initiated
efforts to restore to China territories lost
through "unequal" treaties; and, at the end
of the war, took over the former French con-
cession of Kuang-chou-wan.
(b) Recovery of Hong Kong by the Com-
munists would be a blow to British "imperial-
ism" and would further damage the prestige
of the Western Powers throughout Asia. The
CCP would gain support at home, and its pres-
tige among the "anti-imperialist" peoples of
Asia would be enhanced substantially. Early
rendition of Hong Kong would constitute a
valuable aid to the CCP in consolidating po-
litical control in China.
(c) Hong Kong has served as an important
refuge for Chinese Nationalists, some of whom
are on the Chinese Communist list of "war
criminals." It would, therefore, be to Com-
munist interest to prevent Hong Kong from be-
coming an anti-Communist base.
(2) Economic.
Hong Kong, with its excellent harbor, ample
docking and storage facilities, shipbuilding
and repair yards, and established commerce
and trade, constitutes the principal port in
south China. Its attractiveness has been
greatly enhanced through measures taken by
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the British since 1945 to restore port facilities
and industrial plants to prewar conditions.
(3) Military.
With the occupation of Canton and the
coastal territory bordering on the British
Colony, the Communists will have available
overwhelming land forces which could be con-
centrated against Hong Kong. These forces,
acting with or without the assistance of sub-
versive elements in the Colony, would be able
to capture Hong Kong eventually, although
British defense efforts could be expected to
make the action costly. An inspiration for
military action against the British was sup-
plied by the Communist success against Brit-
ish naval vessels on the Yangtze River in the
early stages of the Amethyst affair. A suc-
cessful military operation against Hong Kong
would greatly enhance the prestige of the Com-
munists and give them recognition as the
dominant indigenous military power in the
Far East.
b. Factors Impelling the CCP to Maintain
the Status Quo to September 1950.*
(1) Political.
(a) After Communist establishment of a na-
tional government, the question of recognition
will arise. Recognition from other than So-
viet satellite states would be facilitated by
Communist willingness to accept interna-
tional obligations and to honor existing trea-
ties. For this reason it would be to Commu-
nist interest not to violate existing treaties
dealing with the status of Hong Kong.
(b) A CCP guarantee to maintain the status
quo of Hong Kong could be used by the Com-
munists as an attractive bargaining point to
induce UK recognition and extension of com-
mercial benefits.
(c) The Communists, suffering at present
from a shortage of adequately trained admin-
istrative technicians, are encountering serious
problems in large population centers now un-
der their control. Consequently, it would be
to their interest to defer occupation of Hong
Kong until they were better prepared to meet
* This date is used throughout in the sense of a
one-year period, the maximum time for which the
estimate herein concerning Hong Kong may be
considered valid.
the administrative issues which would inevi-
tably arise upon their seizure of the Colony.
(2) Economic.
Continued British control of an economi-
cally stable Hong Kong could have a salutary
effect on the economy of south China. The
interests of the Chinese Communists in main-
taining and expanding the flow of industrial
goods into China would discourage any meas-
ure calculated to interfere with shipments
from Hong Kong. Particularly at this time,
when the Nationalists have instituted a fairly
effective "blockade" against shipments into
China ports, the Communists may prefer to
allow nearby Hong Kong to remain in British
hands. As a British Colony, Hong Kong
would be free from the Nationalist "blockade"
and provide a convenient base for "blockade"
running into mainland ports. Furthermore,
the UK might be inclined to provide naval
escort to China ports in the interest of con-
tinued trade relations.
(3) Military.
(a) To date, the Communist forces have ad-
hered to a policy of carefully calculating the
risk before entering upon a military operation.
The Communist high command is aware of
the fact that, although it possesses the military
capability of capturing Hong Kong, such an
operation would be extremely costly, both in
men and material. Operations against Hong
Kong would involve a large-scale engagement
with a Western military power for the first
time. Operations would not be limited to
combat between land forces but would involve
foreign naval and air arms as well.
(b) In view of possible implications, the
Chinese Communists are not likely to under-
take military operations against a major West-
ern power without soliciting the views of the
USSR. Rather than endorsing military oper-
ations, the USSR would probably encourage
negotiations with the UK, since these might
result in beneficial economic concessions which
the USSR could not duplicate.
c. Evaluation of the Chinese Communist
Position.
In calculating the probable effects of these
factors on Communist policy it is necessary to
distinguish between a short-range and a long-
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range policy. An evaluation of the factors
governing Communist policy indicates that
the Communists are determined to eliminate
British control of Hong Kong but that the
acquisition of this territory constitutes a long-
range policy rather than an objective to be
achieved before September 1950, and that the
means to be employed will be diplomatic or
subversive rather than military. Neverthe-
less, it is necessary to take into account the
possibility of spontaneous, uncontrollable ac-
tion as distinguished from an evolved policy.
In the course of the past several years, Com-
munist propaganda, through a continuous
anti-foreign and anti-imperialist tirade has
built up a reservoir of hate, especially among
regular combat units, which could break. on
the slightest provocation. Such a develop-
ment could readily result from a border inci-
dent incited by contact between Communist
and British troops on the vulnerable frontiers
of the New Territories.
Although the Communists will possess the
military capability of seizing the British Col-
ony after their conquest of south China, they
are not likely to press for immediate military
action against Hong Kong for the following
reasons:
(1) Although the Communists probably do
not regard international recognition per se as
essential, they realize that defiance of accepted
international practices would deprive them of
certain benefits, chiefly economic, essential to
the rehabilitation of China. Military action
against Hong Kong certainly would blacken
the already prejudiced case of the Communists
in the minds of the Atlantic Pact nations
which alone can supply essential capital equip-
ment. It appears, therefore, that Hong Kong
is likely to be used as a bargaining point for
acquisition of these particular benefits and
that any domestic complaint against failure
to take military action will be rationalized
through a propaganda campaign.
(2) Following the collapse of south China,
Hong Kong will drop to negligible importance
as a Nationalist haven, but may be used by
the Nationalists as a base to smuggle arms to
small resistance groups on the Continent.
(3) Hong Kong is at present China's most
important export outlet. The proportion of
China's exports shipped through Hong Kong-
about 15 percent before World War II-had
risen to 31 percent by 1948. This percentage
is furthermore based on official trade figures
and takes no account of the large amount of
unrecorded trade carried on by smugglers
whose inclusion would increase the propor-
tion shown.
Eventually, the Chinese Communists may
succeed in establishing foreign contacts that
will free them from reliance on Hong Kong
as a transshipment center. For the imme-
diate future, however, any curtailment of trade
with Hong Kong would seriously reduce the
foreign commerce of China. Such reduction
in foreign commerce would not, it is true, ef-
fect the Chinese economy as adversely as it
might that of Hong Kong. China is more
nearly self-contained and therefore not so un-
conditionally dependent on foreign commerce
as is Hong Kong. The Chinese Communists,
nevertheless, place considerable importance on
the necessity of maintaining exports at this
time, to provide the means for foreign pur-
chases of industrial goods. This interest in
maintaining and expanding the level of ex-
ports will tend strongly to discourage inter-
ferences with the Hong Kong trade.
(4) The inability of the Communists to
meet the perplexing problems of administer-
ing population centers, such as Shanghai and
Tientsin, will probably discourage them from
taking over Hong Kong before they are better
prepared to cope with the issues which will
arise. Although this factor apparently has
had no effect on the Communist drive to cap-
ture such large south China cities as Canton,
Changsha, and Foochow, these cities are Na-
tionalist-held and are unavoidable objectives
in the basic program of destroying National-
ist opposition, while the problem of adminis-
tering Hong Kong can, for the moment, be
avoided.
(5) Military action against Hong Kong
would necessitate engaging ground, sea, and
air forces of a calibre hitherto unencountered
by Communist armies. The Communist high
command is probably aware that its success
against British naval units in the Yangtze
River does not foretoken similar results
against naval forces enjoying a greater free-
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dom of maneuver, and it is also probably
aware that the sporadic attacks by Nationalist
planes strafing at high altitudes constitutes no
basis for estimating the effectiveness of sea-
soned British air units. The Communists,
therefore, must realize that the cost of such
an operation in men and material would be
extremely high.
(6) The preponderance of Chinese in the
population of Hong Kong renders the Colony
extremely vulnerable to sabotage, strike, and
boycott. The vulnerability to sabotage has
been heightened by the population's large pro-
portion of transients and recent immigrants
who have no strong feeling of attachment
to the colonial government. In the past
year, the population of the Colony has in-
creased by over 200,000 persons. All utilities
in Hong Kong are manned and operated by
Chinese personnel, with a minimum of British
supervision. The power system, water sys-
tem, and dockyards could cease to operate al-
most immediately if an organized anti-British
movement began. British efforts to maintain
internal security are endangered by the pos-
sibility of - defection within the Hong Kong
police force. With such potent weapons at
their disposal, it appears that the Communists
would employ military means to seize Hong
Kong only as a last resort.
3. Pressures Governing British Policy for Hong
Kong.
The main British desire in China 'is to pre-
serve economic position and prestige through
a modus vivendi with the Communists which
would protect all British interests. Hong Kong
itself is, in one sense, merely the focal point
of this larger picture; but Hong Kong also has
implications extending beyond the boundaries
of China through the entire Far East. Exclud-
ing influences which the US may bring to
bear, the main pressures molding British
policy for Hong Kong may be summarized
as follows :
a. Factors Impelling the UK to Maintain the
Status Quo of Hong Kong in the Period Ending
September 1950.
(1) Political.
(a) British chances of achieving fruitful re-
sults from comprehensive negotiations with
the Chinese Communists, would be greatly im-
proved by the possession of a reasonably stable
Hong Kong, strong enough militarily to with-
stand anything but the most determined and
protracted siege, and economically able to of-
fer obvious trading advantages to a China still
dependent in part on imports from the West.
(b) Any sign of British weakness in Hong
Kong would encourage further and more seri-
ous efforts on the part of the varied forces
attacking the status quo throughout South-
east Asia and would undermine the elements
working for stability. This would be particu-
larly true in Malaya where the Chinese Com-
munist guerrillas would be given a boost in
morale at a time when government forces
are keeping them increasingly on the defen-
sive. It would create throughout the region
the impression that the West is retreating be-
fore the new order in Asia, thereby causing a
rush to support the Chinese Communists.
(c) Any apparent weakening of the British
position in the Far East is a source of imme-
diate concern to Australia and New Zealand
which still rely (although to a much lesser de-
gree than formerly) on British military and
diplomatic support for their protection. They
are particularly sensitive to any development
threatening the Commonwealth lifeline. The
three new Asian dominions, India, Pakistan,
and Ceylon, are comparatively unconcerned
about Hong Kong, but would, on the whole,
probably prefer to see it remain for the present
in British hands; British prestige in their eyes
at any rate would not be increased by its
rendition.
(d) As a result of the attacks in Parliament
and in the press caused by the Amethyst in-
cident, the Labor Government is particularly
sensitive to any domestic criticism regarding
the maintenance of the British flag.
In June 1949, indeed, the Defense Minister
pledged his government to take measures to
ensure the safety of Hong Kong. A decision
not to go through with the defense of the
Colony would leave the government open to
Opposition charges that it was both presiding
over the dissolution of the British Empire
and violating a specific commitment-criti-
cisms which, with a general election pending,
the government is especially anxious to avoid.
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(2) Economic.
(a) The commercial importance of Hong
Kong to the UK under normal conditions is
considerable. Hong Kong is one of the world's
great entrepots, acting as a clearing house
both for the south China trade and Far East-
ern trade generally. Providing financial and
allied services with a security unknown in
most Far Eastern countries, the Colony, more-
over, serves as the nerve center for the whole
complex of British commercial operations in
China.
(b) In the short run, Hong Kong is not
economically vulnerable to Communist ex-
ternal pressures. Although the China trade is
an important element in Hong Kong's long-
range prosperity, statistics indicate that the
Colony is not at present exclusively depend-
ent on this trade. Only 18 percent of Hong
Kong's exports were shipped to China in 1948,
as compared with 45 percent before World War
II. Imports from China have similarly de-
clined in relative importance. To date, the
ability of the Hong Kong merchants to find
profitable markets and sources of supply in
other countries, in the face of the increasingly
severe Chinese restraints on commerce, sug-
gests the limited effectiveness of possible em-
bargo measures by the Chinese Communists.
It is pertinent to note also that Chinese
embargo measures would not impair the Col-
ony's food position seriously. Rice, the staple
of the people's diet in the Colony, is already
a prohibited export from the mainland, but
the Colony has obtained adequate supplies
from the smuggling trade, and from shipments
from Burma, Thailand and French Indochina.
(3) Military.
Because of Hong Kong's vulnerability as an
advanced military base in relation to the cur-
rent and foreseeable capability of the UK to
utilize and exploit it as such, it is not likely
that purely military reasons will impel the
British to retain it.
b. Factors Impelling the UK to Withdraw
from Hong Kong before September 1950.
(1) Political.
There are no significant political factors
impelling the UK to give up its present posi-
tion in Hong Kong except as part of a long-
term understanding with the Chinese Com-
munists. A mere unconditional withdrawal
in the present circumstances would not make
the attainment of such an understanding
more likely.
(2) Economic.
(a) Hong Kong's trade with China, al-
though relatively less important today than
it was before World War II, still constitutes
the largest component (approximately one-
fifth) of the Colony's foreign commerce. Al-
though an effective economic embargo applied
by the Chinese Communists would not make
the Colony immediately untenable, loss of
Hong Kong's major trade outlet and source
of supply would seriously reduce its economic
importance to the British.
(b) The extensive British capital invest-
ments and commercial interests in China
Proper are now mostly subject to Chinese Com-
munist control. Concern about Communist
action against these interests in China Proper
and the desire to protect them might induce
the British to reconsider their status in Hong
Kong.
(3) Military.
(a) The capabilities of the Communist
armies against efficient Western forces are
still untested; but in assessing the possibili-
ties of a direct attack on Hong Kong, the Brit-
ish must at any rate assume these armies to
be large, fairly well equipped, and self-confi-
dent. The threat of a Communist military
assault, therefore, is regarded by the British
to be serious.
(b) The British are deeply concerned over
the problem of internal security in Hong Kong
because of Communist-controlled labor unions
in public utilities and dockyards, the dubious
loyalty of some of the police if ordered to ad-
vance against other Chinese, and the varied
subversive potentialities of the dense Chinese
population which has been further swelled by
thousands of refugees, probably including
many Communist agents.
c. Evaluation of the British Position.
In evaluating these varied pressures and
their probable net effect on British action, an
initial distinction must likewise be made be-
tween long-range and short-range policy. The
British realize their inability, unsupported, to
SEC /ET
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hold the Crown Colony of Hong Kong indefi-
nitely in the face of serious rendition demands
from a strong and united China. The situa-
tion likely to obtain between now and Septem-
ber 1950, however, is one in which the pres-
sures impelling the British to hold Hong Kong
tend to be maximized and the counter pres-
sures minimized. Unless actually over-run by
the Communists, for example, Hong Kong is
unlikely to be so completely transformed eco-
nomically within a year that the British will
be prepared to write it off as a permanent eco-
nomic liability. In the short run, therefore,
unless a comprehensive settlement with the
Chinese Communist regime is reached, the
only thing likely to bring about a British
withdrawal from Hong Kong is sheer military
necessity.
From the publicity it has given its measures
to defend Hong Kong, the UK evidently antici-
pates no such necessity. A tentative survey of
British capabilities to resist both internal and
external threats gives grounds for confidence
in their ability to maintain control during a
local emergency of limited duration. British
capabilities may be estimated as follows :
(1) Ground.
A limiting factor governing the further rein-
forcement of ground forces in Hong Kong is
the availability of combat-ready British units.
When the troops now committed have arrived,
the British Army will have virtually no strate-
gic reserve. The nearest combat troops are
those in Malaya, where reduction of garrisons
would be undertaken with the greatest misgiv-
ing. No definite commitments of ground
forces from the Dominions have been made as
yet, although some Australian and New Zea-
land units may be available as reserves. Fur-
ther reductions in the Middle East area would
be possible only if political as well as military
risks ensuing from such reductions were ac-
cepted. Reinforcement from units now in
continental Europe would probably be a last
resort, while further reinforcement from troops
in the UK would consist largely of untrained
and inexperienced personnel.
(2) Sea.
With the possible exception of carriers, the
Navy can supply all needed warships for direct
troop support without any strain on other com-
mitments. The British Merchant Marine can
undertake the logistic effort needed to main-
tain land and air forces committed in combat.
However, some stockpiling in advance of
anticipated combat operations would be neces-
sary, but this is well within the potential
capabilities of the Merchant Marine and is
undoubtedly being undertaken.
(3) Air.
The employment of even the relatively small
numbers of RAF units which can operate from
Kaitak, the single airfield existing on the
mainland at present, places a strain on oper-
ational commitments of the RAF in other
theaters. Another factor governing the em-
ployment of land-based aircraft in Hong Kong
is not, of course, Communist aircraft potential
but the limited capacity of Kaitak. This limi-
tation can be offset in part, however, by use of
available carrier-based aircraft which, in view
of limited Communist air potential, could be
effective in many types of operations.
(4) Police.
The threat of internal security is regarded
by the British as more immediate than that
of a major external attack, and defense
planning in general assumes both threats to
be parts of the same problem. For example,
military maneuvers conducted last spring
against a hypothetical attack on the New Ter-
ritories assumed a. concurrent rising in the
cities and included steps for dealing with the
latter situation. Measures for reducing in-
ternal tensions under siege conditions-such
as the provision of a three-months' emergency
rice supply-have recently been undertaken.
The regular police force of less than 3,000 men
is larger than it was before the war; but efforts
to augument it with special police for emer-
gency duty have been seriously slowed by
wholesale leftist attempts to join up them-
selves, thus necessitating elaborate screening
of all Chinese recruits. The Hong Kong Gov-
ernment has, however, an efficient counter-
intelligence organization, built up over a long
period, and emergency regulations are already
drawn for the summary imprisonment of any
persons regarded by the government as sub-
versive. It is not known how effectively these
various measures would cope with an internal
rising concerted with external threats.
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO03700060003-2
 Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO03700060003-2
(5) General.
In any final assessment of British military
capabilities in Hong Kong, it must be remem-
bered that the British have no inclination to
seek a purely military solution themselves but
merely to prevent the Communists from doing
so. The immediate purpose of the well-publi-
cized reinforcements is to announce to the
Communists that the UK will not be bluffed
out of Hong Kong; but at no time have the
British implied that, given suitable oppor-
tunity, they would be unwilling to discuss the
whole question of Anglo-Chinese relations.
Negotiations under favorable terms seem, in-
deed, to be the main end of Britain's present
Hong Kong policy. The evident UK convic-
tion is that in such negotiations the unquali-
fied demand for rendition would necessarily
go by the board, and the Chinese irredentism
would be subordinated to a calculating self-
interest by the prospect of a Hong Kong prof-
itable to do business with but costly to take by
force.
4. Conclusions.
It appears that between the present and
September 1950, barring incidents which could
provoke conflict between Communists and
British frontier forces, conditions minimize
the chance of a Communist attack against
Hong Kong. It is believed that during the
next year the Communists will increase their
anti-British propaganda and will institute
pressure for the rendition of Hong Kong,
which, to date, they have not done either by
diplomacy or by propaganda. Anti-British
agitation inspired partly by the escape of the
Amethyst from the Yangtze River has already
been observed in Shanghai. The Communist
high command, however, is likely to keep close
watch on forces occupying the Hong Kong
border area in order to avoid incidents. The
British, for their part, will continue to
strengthen Hong Kong's defenses.
When the question of international recog-
nition arises, the status of Hong Kong prob-
ably will come up for review between the Chi-
nese Government and the UK. If the UK
demonstrates reluctance to recognize the new
administration or to make available the eco-
nomic facilities of Hong Kong, the Commu-
nists are likely to order Hong Kong's saboteurs
and agitators into action. It is improbable,
however, that the Chinese Communists will set
their armed forces into motion against Hong
Kong before September 1950.
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO03700060003-2
 Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO03700060003-2
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO03700060003-2
 Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO03700060003-2
G/$i
1949 OCT 6 15 36
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U. S. GOVERNMENT PRINTING OFFICE
4236-STATE-1949
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO03700060003-2