SECRET -2-

NOT AND WE WERE (VIOUSLY TRICKED, PUBLIC REACTIONS COULD BE VERY

CRITICAL AND WE MIGHT FACE SOMETHING LIKE A CRISIS OF CONFIDENCE.

FOR THIS REASON IT WOULD SEEM VERY DESIRABLE AT LEAST TO TEST OUT

SCOTHE GROUND WITH CHOI COUR TOP SECRET TELEGRAM 496) FIRST, BEFORE

STARTING TO BARGAIN ON THE MUCH MORE DIFFICULT PROBLEM OF GREY'S

RELEASE.

A.

OF COURSE THERE ARE STRONG HUMANITARIAN REASONS FOR DOING AS

MUCH AS WE CAN TO GET GREY OUT AS SOON AS POSSIBLE. BUT IT SEEMS

DOUBTFUL IN ANY CASE IF TAKING A VERY EARLY INITIATIVE ON HIS

PROBLEM IN ISOLATION WILL NECESSARILY PRODUCE THIS RESULT. I AGREE

WITH PARA 6 (B) OF THE TELEGRAM UNDER REFERENCE THAT IT MIGHT

!

INSTEAD BE TAKEN AS A SIGN OF WEAKNESS AND ENCOURAGE THE CHINESE

TO RAISE THEIR BIDS. WE WENT SOME WAY IN OUR STATEMENT OF APRIL

13TH TO MAKE OUR POSITION CLEAR TO THE C P G AND TO GIVE THEM

OPENINGS IF THEY REALLY WANT TO NEGOTIATE ABOUT THE MAJOR OUTSTANDING

HONG KONG ISSUES. THERE IS SOME REASON TO THINK THAT THEY MAY STILL

BE CONSIDERING HOW TO DEAL WITH THE PROBLEM SEMICOLON AT ANY RATE

(426)LI CHOH- CHIH COUR TELEGRAM 440) LEFT HERE ON APRIL 23 ALLEDGELY

A

FOR TALKS IN PEKING AND HAS NOT YET RETURNED TO HONG KONG. THERE

DOES SEEM TO BE A REAL RISK THAT AN EARLY APPROACH ABOUT GREY ON

THE LINES OF PARA 5 OF THE TELEGRAM UNDER REFERENCE COULD CUT

ACROSS OUR OTHER LINES OF CONTACT SEMICOLON AND THAT BY SUGGESTING

WE WERE PREPARED TO MAKE MAJOR CONCESSIONS IN ORDER TO DEAL WITH

THIS PARTICULAR CASE, WE WOULD DRAW ATTENTION TO A MAJOR WEAKNESS

IN OUR BARGAINING POSITION.

5. OUR FEELING IS THEREFORE THAT FOR THE MOMENT IT WOULD BE BEST

TO CONCENTRATE ON RELATIVELY MINOR MOVES TO ALLEVIATE GREY'S

POSITION SEMICOLON AND NOT TO PRESS AHEAD WITH NEGOTIATIONS FOR

HIS RELEASE UNTIL WE HAVE HAD MORE TIME TO SEE WHETHER THERE IS

A RESPONSE (EITHER THROUGH THE M FA OR OUR OWN LOCAL LINES OF

CONTACT) TO THE OPENINGS PROVIDED IN OUR STATEMENT OF 13TH APRIL.

SECRET

/6. AS

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