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we shall encourage the Chinese to go for higher stakes, e.g. all news-workers, or to widen the discussions in other ways. To sum up I do not consider the chance of the extra[gp. undec]s this course may produce on Chinese intentions is worth the delay and the risk of raising their sights involved in the probe.
4. As regards channels to be used if discussions were nevertheless decided on, we must balance the "deniable" nature of unofficial channel against its greater obscurity and delay. It is arguabîs that, if we are clear up to what price we will go, it would be better to put proposal officially in Peking on grounds that our chances of a quick and reliable answer would be higher there.. But I hope discussions by whatever channel can be avoided.
atter.
5. on course (c), unconditional release now would carry an obvious danger: we might find we had released two men without getting Grey out. On the other hand for reasons given above I doubt this risk can be greatly reduced however we approach the ma We know we are making relevant concessions. Whether they are decisive or not we shall only discover by making them. As regards the appearance of an "act of submission" (paragraph 12 of telegram under reference) any premature release, successful or not, or indeed any concession, might conceivably be interpreted this way. But at this interval after last year's violence and in the present more favourable political climate the risk seems slight. The earlier release of young convicted prisoners, which I understand occurred in April, June and July, has not been seen in this light. The release of Hsueh and Lo could be readily presented to the public as an act of humanity to assist Grey's release. If the Chinese failed to respond they would be much more vulnerable to publicity. [Gp. undec.] I do not agree that the possibility of helping Grey would have greatly receued (paragraph 12 of telegram under reference),
If we are
6. I should add that the immediate release of Hsueh alone, followed by the possible release of Lo if the Chinese reaction is encouraging, would not be a satisfactory compromise. prepared to release the two we should do so in one act. Instalments will encourage the Chinese to ask for more instalments: and would have the many disadvantages of course (b). Nevertheless
if it came to the choice 1 would prefer this to course (b).
7. My recommendation is strongly for course (c).
Foreign Office pass Priority to Hong Kong.
Mr. Cradock
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