CONFIDENTIAL
Peking telegram No. 74 to Foreign Office
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5. As regards entry visas, I recommend we grant the Chinese requests immediately and for both Bank of China and NCNA. Attempts to bargain with these would merely hold up thaw and might even mean opportunity would slip. For reasons given in paragraph 3 of my telegram No. 31, attempts to impose prior conditions in this way would probably lead a deadlock. Moreover by granting entry visas we are adding to our potential hos tages and making it even less likely that Chinese will all decamp from London. I think that if Bank of China visas are granted and our exit visa requirement lifted the Self's would have a good chance of visas. In any event improvement of general situation would be bound to influence their problem favourably.
6. I appreciate that there may be reluctance to grant entry visas for NCNA while Grey case is unsolved. But as pointed out in my telegram 48 Grey's case turns on prisoners in Hong Kong, not (repeat not) on NCNA in London. Mr. Kao underlined this point when he said that Grey's was not a visa case. I am most anxious to do everything possible for Grey but I think that by trying to bring him in on this deal and to solve all our problems at once we shall fail to solve any. Moreover, if this works and Mission's visa problems are solved without involving Hong Kong, Grey's chances should improve since he would become first and perhaps only charge on Hong Kong prisoners. It might be possible to grant only short residence permits, say 3 months, to new NCNA men when they arrive in London; this would increase our opportunities for pressure over Grey. In any event it would still be possible for us to act as suggested in paragraph 5 of your Saving telegram No. 76 if by then we had made no progress over deportation.
7. A further argument in favour of acceptance is that if we can solve this Mission's movement problems without bringing in Hong Kong, the Governor's hand should be much strengthened in dealing with local Communists. The Grey problem would remain, but Hong Kong would not have to look over their shoulders at us so much as hitherto.
8. I recommend strongly against delay or attempts to haggle over this offer or to whittle down Chinese terms. They are much better than we might have expected and it is in our interests to seek solution quickly and in a bilateral context if we can. If the Chinese attitude changes or if Hong Kong situation deteriorates the price might be raised or chance lost for good.
9. I accept that this is unce more something of an act of faith. But as in the case of the lifting of movement restrictions in London in November (which produced corresponding result) we have to move first. We have taken up clear terms and, in Kao's final remarks, as near an assurance on corresponding Chinese gestures to come as we are likely to get. The Chinese may of course change their ground, or even be deliberately deceiving us. But I think this risk is small. In any event with our need for free movement we stand to gain every thing. And since our exit visa requirement could be reactivated and further entry visas refused if moods oe, we would lose little if gambit did not work. Even if, on the worst hyonthesis, the move did not produce a final thaw on our movements we should know where we stood and would still retain the Chinese in London.
CONFIDENTIAL
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