SECRET
While it would be wrong to overestimate the value of these contacts, I think we might take advantage of what appears to be an initiative from the other side. As far as I know, though you will be able to confirm this, Ho is a reasonably reliable go-between; it is very much in his interests to be one. I am sure that F. K. Li'ia correct in his comment that Ho's remarks about his frequent trips to Hong Kong were intended as a hint that he will be available for a continuing dialogue. We could probably derive positive advantage from this opening by using it as an opportunity to state our own terms, particularly since the situation in Hong b Kong is now relatively calm and we would/seen to be speaking from strength. We could point out with some force that the Hong Kog Government would find it easier to take a more flexible attitude on certain questions (the implication would be detainees) if the communists helped to create the right atmosphere by avoiding further incidents, toning down their inflammatory anti-Government propaganda, and by refraining from making constant "demands" on the authorities. Although we shall have to see how the Chung Wah issue develops, the communists have already contributed something to keeping the temperature down by their restraint on publicity about those detainees who have already been released and by their general avoidance of open clashes with the Hong Kong Government. might be prepared to make greater efforts if we were to hold out the possibility of reciprocal steps on our side.
It is in our interests to convey the thought via. Ho Yin, or any other suitable intermediary, that,`given maintenance of reasonable order in the colony, we would be prepared to consider further de-escalation, particularly on detainees and perhaps on convicted prisoners.
They
I am copying this letter to James Mužrary in FarnEastern Department.
(P. CRADOCK)