SECRET
3.
(a)
@@
(e)
we do not think an approach to the Japanese Government would produce any useful response. We are considering other methods;
we really do not see any future in trying to find out what would satisfy Peking.
An approach in a third country or through a third party will not result in a response that would be any different to the one we would get if we made our own approach in Peking or London; no such approach would be answered directly but would be referred back to Peking whose response in present circumstances must be the reiteration of their full demands. With the example of Macao before us we must avoid entering into any negotiations unless Peking itself offers terms that could provide the basis of an acceptable settlement.
Your paragraph 2(f). You should know of the following developments:-
(i) In answer to the few trade enquiries received,
we and the Board of Trade are taking the line that Press reports may have tended to give an impression of more widespread disturbances than have actually occurred and that there has been very little disturbance to commerce and industry. We have suggested that no precipitate action is called for in abandoning projected deals and in using more than normal caution in the conduct of business, E.C.G.D. have not altered the terms on which they are prepared to cover exports to Hong Kong.
(ii)
(iii)
(iv)
(4)
At the B.N.E.C. Asia Committee yesterday, Montagu suggested that he might visit Hong Kong with a view to reporting on the attitude they should take to trade with Hong Kong. We shall be grateful for your views on this and for those of the Trade Commissioner.
As you are probably aware, the Hong Kong Association have made various proposals, details of which are available at their Hong Kong office. They have seen the Minister of State and also Cowperthwaite. We understand that some of these can only be put into effect if you could help with financial support.
We shall do what we can to back up Sedgwick's efforts to push the line that Hong Kong remains a good market for British exports and that Hong Kong industry and trade continues to function normally. We have made some suggestions to Sedgwick about extending the distribution of the material now being put out by his office and will continue to keep in touch with him on this.
We know of Boxall's contacts with our News Department and C.0.I. on question of strengthening your London Office staff.
(Passed to D.S.A.0. for repetition to Singapore
and Washington.)
SECRET
QUA
/Distribution