Hong Kong

on the World Today

THE occupation of South China by the Chinese Reds is certain to confront the British Crown Colony of Hong Kong with one of the most critical periods in its history. For there is no reason to suppose that. China’s Communists will prove any less hostile to British and American interests in South China than they have in Shanghai. Hong Kong is unlikely to prove immune from their virulent antiforeign and anti-imperialist policies.

The island of Hong Kong (literally “Fragrant Harbor”), which has an area of only 32 square miles, was formally ceded to the British Crown by the Treaty of Nanking in August, 1842. Under the Peking Convention of 1860 the small peninsula of Kowloon and Stonecutters’ Island were also ceded; and by another Peking Convention, signed in July, 1898, the British Government acquired a 99-year lease of what have since been known as the Leased or New Territories. This brought the total area under British administration up to 391 square miles.

One of the world’s greatest harbors grew up nal urally in the Colony’s enclosed waters. Freedom of the port and freedom of entry and egress of all persons ol Chinese race (a privilege, which was not, as mistakenly supposed by many authorities, granted by any treaty, convention, or agreement) ensured for the Colony the role of entrepôt, both for the trade and the labor of China’s Southern Provinces, in addition to its becoming a distribution center for much of the trade of Central and North China ports. In 1922 Hong Kong claimed, on the basis ol tonnage of entries and clearances of ocean shipping, to be the largest port in the world.

The Colony’s role as a distribution center became even more important during the post-war period, when the Chinese government, relieved of the servitudes of the so-called I ncqual Treaties, banned the participation of vessels under foreign flags in the coast and river trade.

Until the post-war period little had been done to develop Hong Kong as an industrial center. The only pre-war industries of any importance were the manufacture of refined sugar, cement, ginger, rubber shoes, and flashlight batteries and torches.

Industrial development on a larger scale was hampered by several factors — among them, concentration of local energies upon ihe development of wharf and harbor facilities; the water shortage (the Colony has to depend upon rainfall and reservoir storage for its entire water supply); and the strict enforcement of those sections of International Labor Codes relating to the employment of female and child labor (which prevented economic competition with such industries as texlile mills, on Chinese soil, where the provisions ol these codes were ignored).

A recent modification in the ordinance banning night work for women, in the case of approved textile factories, has led to the installation of some of the most modern cotton mills in the world, while the flight of Chinese capitalists from China has resulted in the establishment of a number of other industrial plants. The water scarcity, however, continues to operate as a deterrent to large-scale industrial development.

Too many people

The normal population of the Colony (taking the year 1937, the last year of peace in South China, as a standard) was about 800,000. Following the Japanese occupation of Canton towards the end of 1938, Chinese refugees from all parts of South China poured in, literally by tens of thousands, and at the time of Hong Kong’s surrender it was estimated that the population exceeded 1,750,000.

During the occupation t he Japanese succeeded, by drastic and often brutal methods, in reducing the population to between 400,000 and 600,000; and after liberation it. was believed that the shortages of housing, food, and employment would discourage Chincse immigration,

Unsettled conditions throughout South China, the depreciation of China’s currency, and widespread lawlessness, however, led to another mass invasion. At one period Chinese immigrants were pouring in at the rate of over 100,000 per month, and by the end of 1948 it was estimated that the population had risen to approximately two million. The resulting overcrowding aggravated the problems of rehabilitation. But the re-eslablishment of the rule of law, a stable currency (the Hong Kong dollar is linked to the pound), rigid price controls, and equitable rationing of necessities enabled the Colony to surmount the difficulties resulting from overcrowding, to make rapid progress in the tasks of rehabilitation, and in the years 1947-1948 to recover most if not all of its pre-war prosperity.

Wealthy Chinese from the North and from Shanghai, apprehensive of the advance of the Beds, and fearful of the consequences of a runaway inflation, arrived in Hong Kong in large numbers, contributing to the Colony’s prosperity by financing new industries and businesses, while at the same time aggravating the housing problem by buying residential and office properties at fantastic prices.

The British hold on

The British Government had refused to include the question of retrocession of Hong Kong in the negotiations that preceded the signature of the Anglo-Chinese Treaty of January, 1943, under which the Unequal Treaties were abrogated. But it was obvious that this issue would be raised sooner or later.

No formal demand for retrocession has been made since V-J Day, but frequent attempts have been made to divert attention from internal diflieulties by anti-British propaganda in connection with Ilong Kong. Apart from allegations of infringement of China’s sovereignly it was repeatedly alleged that smuggling to and from ihe British Colony was obstructing China’s economic recovery.

That large-scale smuggling did take place from Hong Kong (as well as from the Philippines, Japan, Formosa, and Korea) was undeniable. But it was organized by Chinese, mostly in China, often with the connivance of the Chinese Army, Navy, and Air Force, and even of the Customs Service.

The British permitted the Kuomintang, then the dominant political parly, to establish a branch office in one of the Colony’s main thoroughfares, under the direction of a member of the Legislative Yuan, and the Kuomintang was allowed to publish a daily organ — the National Times. The branch office and the newspaper lost no opportunity in trying to work up anti-British agitations; and though they were foiled in attempts to secure control of the entire vernacular press, they intimidaied it to such an extent that no Chinese newspaper dared to publish the British version of any incident out of which the Kuomintang might make capital.

The most serious of a number of organized antiBritish agitations followed the eviction of some 2000 Chinese squatters — for whom alternative accommodations had been offered — from their unsanitary shacks among the rubble of the former little walled city of Kowloon.

Claiming that this was a violation of Chinese sovereignty, the Canton Kuomintang ordered mass anti-Brilish demonstrations, locked out the students of all schools and colleges to compel them to participate, and incited them, headed by a detachment of the San Min Chu I Youth Corps (the counterpart of the Hitler Youth), to invade the former British Concession of Shnmeen to protest. The demonstrators tore down the British flag, looted several offices, and burned the British consulate to I he ground.

The damage was estimated at 1.4 million U.S. dollars, and at first responsibility was admitted bv t he Chinese government, but not a cent of indemnity has been paid to the victims, although two years have passed since this outrage. This is one of the unhappy consequences of Hong Kong’s attempt to cooperate with the Chinese authorities.

Should the Chinese vote?

The Government of the Colony is administered today by a Governor, appointed by the Crown, assisted by an Executive Council of six senior officials and six nominated unofficials — of whom three are of Chinese race — which meets in camera, and a Legislative Council of seven official and eight unofficial members, which holds public sessions. There is also an Frban Council whose duties are mainly restricted to licensing and sanitation.

Proposals to introduce a more representative form of government, which have been made since the liberation, have become the subject of acute controversy. One of them — an elected majority of unofficial members on the Legislative Council - has met with a mixed reception owing to acute differences of opinion ov er the franchise. One section of the community holds very strongly that only British subjects of whatever race should be entitled to vote. Others advocate a franchise based upon length of residence or taxation.

A very real difficulty in deciding upon the merits of any scheme is the existence of dual nationality. Under China’s Nationality Laws, no person of Chinese race, wherever born, can divest himself of Chinese citizenship without a license (which is seldom if ever issued) from the Ministry of Interior. All British subjects of Chinese race, therefore, are regarded as Chinese citizens and treated as such, in China, in such matters as entry and exit and property rights. A British subject not of Chinese race desiring to enter China — even the port of Canton, a few hours distant by rail — must obtain, and pay the equivalent of 3 U.S. dollars for, a Chinese entry and exit visa, however frequent his visits.

It strikes many Britons as an anomaly that on arriving in the Colony by rail, ship, or plane, they must undergo passport formalities with the immigration officials, while Chinese walk off without examination unless suspected of smuggling in gold.

Communist fifth column

Chinese immigration is difficult to control because the long, indented coastline is so easy of access to small junks and sampans. The security of Ilong Kong has unquestionably been seriously undermined by an inflow of over a million unchecked Chinese immigrants, many of them Communists, criminals, and paupers.

The Legislative Council recently passed an ordinance (which has not yet been enforced) empowering the government to restrict immigration, regardless of race, and another providing for the registration of all Ilong Kong residents. Unless effective immigration restrictions are enforced in good time, there is serious danger that the Bed invasion of South China may result in the incursion of another three quarters of a million or more refugees.

Problems of internal security are likely to become the chief worry of the local authorities when the Reds reach Canton. For there are known to be some thousands of Communists in the Colony, and there has undoubtedly been serious Red infiltration into several of the local tradeunions.

Apart from the difficulties of maintaining order internally, if Communist infiltration is as serious as is generally believed, there will be the problem of feeding Hong Kong’s overgrown population. The New Territories, whose farmers are being urged, by pamphlets dropped from aeroplanes, to intensify the cultivation of vegetables, cannot undermost favorable conditions produce more than a fraction of the foodstuffs consumed in Hong Kong. Until now most of the vegetable supply has come from the Chinese hinterland, which would probably be isolated by the Reds. Rice is imported from Burma and Siam, meat from Australia, and fruit from South China and the Philippines. The only type of food in which the Colony is self-sufficient is lish.

A for democracy

While it remains in British hands, Hong Kong will offer the only serious hope of maintaining trade relations with China — not necessarily with the Reds. The Chinese are past masters, as they showed during the Japanese occupation of large areas of their country, in carrying on trade in the face of restrictive regulations.

It may be that the highly organized smuggling fraternity in the Colony and across the border will successfully defy Communist attempts to isolate China from the outside world. It may be that, having ruined the economy of Shanghai, the Reds themselves will realize the value of the British Colony as an entrepot and, without relaxing anti-British and anti-American propaganda, connive at an import and export trade with Hong Kong. Certain it is that the Colony faces a very critical period, during which the endurance of the population, British and Chinese, will be severely tested.

That the British Government is determined to defend Hong Kong is shown by ihe fact that the defense forces of the Colony, naval, military, and air, have already been increased to over 20,000, and will probably reach a total strength of 30,000 in the near future. In a recent interview the British G.O.C., Lt. Gen. F. W. Festing, stated that when defense preparations were completed the gun density would be equal to that of London at the height of the blitz.

Nor can America be an entirely disinterested party. American exports to Hong Kong in 1948 exceeded those originating in the United Kingdom by 21.5 million U.S. dollars. Although Hong Kong is within the sterling bloc, the existence of an open market for hard currency has been recognized by the British Government. Possibly Hong Kong, as a British Colony, will prove to be the wedge by which the two great democracies will be able to undermine Communism in South China.