SECRET

OUTWARD TELEGRAM

FROM THE COMMONWEALTH OFFICE (The Secretary of State)

TO HONG KONG (Sir D. Trench)

Cypher

Sent 12th May 1967. 14492

DISCOVE

FLASH SECRET No.899

Addressed to Governor Hong Kong Repeated for information to Peking (FLASH)

13

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POLAD, Singapore (PRIORITY)

(15)

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Your telegram No.589.

We have discussed with Foreign Office and following are our agreed views, subject to views of Chargé d'Affaires, Peking.

2.

We agree that dispute appears to be spontaneous and local in origin. It appears to us that every advantage lies in securing a settlement at the local level.

3. We think that any approach in London or Peking on the lines suggested will lead to escalation, obliging the C.P.G. to come out in support. They would lay the blame entirely on us and insist that we accede to all local demands. Such an approach would open the door wide for Peking to start bargaining on such matters as provision of facilities for U.S. ships and visits of troops, return of illegal immigrants and handing over of K.M.T. agents. We could expect their reply to be followed by an all-out propaganda campaign against the Hong Kong Government.

4. We therefore think it much safer that representations should be made through local channels (your telegram No.592 refers). Do you think there is possible danger in emphasising damage to economy of Hong Kong or making actual references to Macau? We felt some doubts on this score, but are careful to be guided by your judgment.

5. We have just seen Peking telegram No.474 to Foreign Office which supports above views.

(Passed to D.S.A.0. for repetition to Peking and

POLAD Singapore)

Distribution:-

Sir A. Galsworthy

Mr. Hall

Mr. Carter

Mr. Russell

Mr. Jerrom

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