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London only an hour before. As a result of this confirmation
that a joint CIA-NSA listening operation was being directed
towards the UN headquarters, Smith was more careful with his
communications thereafter, often using the encrypted radios of
the Special Air Service, which he believed to be more secure. 28
Perhaps the most historic change for GCHQ in the early 1990s
was the loss of its listening station in Hong Kong, which, but
for a brief interruption during the Second World War, had been
there since the early days of GC&CS. This was triggered by the
impending transfer of Hong Kong to Chinese rule. Washington
viewed Hong Kong as an irreplaceable watchtower on China.
For years British diplomats had complained that Britain was
collecting more intelligence about China than it could possibly
need, and had asked why this target was so important. The
underlying rationale was exchange with the Americans. Hong
Kong was the single most valuable British collection station to
NSA, providing offset in an otherwise unbalanced Anglo­
American intelligence relationship.29
Notwithstanding the fact that NSA knew the British would
have to leave in 1997, it had poured huge investment into
British sigint at Hong Kong. In 1982 the GCHQ station at Little
Sai Wan, which had depended on listeners with headphones,
had been closed down and replaced by a new operation at Chum
Hom Kok, on the south side of the island, which monitored
satellite activity.30 This new station was initially given the code
name 'Demos-I'.3l The problem with the location was accommodating
the massive dishes - there were eventually five - on
what was a narrow shelf of rock overlooking the South China
Sea. 32 Chinese agents took a close interest in the station, so
there were tight procedures whereby a 'cleared expatriate' supervised
the moving of classified waste to a vast 'Refudoc' incinerator
in the main building. The bum bags full of top-secret
sigint material were huge, standing three feet high and weighing
about thirty pounds. 33
Despite the problems of its precarious site, Demos-I had