SEORET

· 3-

The contact undertook however to write to Peking and enquire

about the possibility of releasing Mr. Grey. This was

agreed (Hong Kong telegrams Nos. 2000 and 2001). Matters

did not end there. At the subsequent meetings held at the

request of the contact on 21, 24 and 25 September (Hong Kong

telegrams Nos. 2007, 2008, 2030 and 2031), it became clear

that he had discussed the matter in depth with a prominent

mainland representative in the Colony (Li Cho-chih of the

Bank of China) and had also written to Peking about Mr. Grey

but in the most general terms. This meant that our original

intention of making a firm offer for the release of Mr. Grey,

but in strictly defined terms, had not been achieved. On the

one hand we were not forcing the Chinese hand; on the other

we were offering then the chance of forcing up the price for

the release of Mr. Grey.

5. At the meeting on 25 September the contact delivered a

return message in the following terms:-

(a) Chou En-lai was concerned about Mr. Grey and would act

"when the opportunity occurred".

He had asked the

contact to send an assessment of the situation regarding

Mr. Grey.

In any

(b) The mainland representative, Li Cho-chih, had received

instructions that the contact should not press ahead

with discussions about an exchange for Mr. Grey.

negotiation of this kind Peking felt they would be bound

to ask for more than the release of Hsueh probably at

least all the fiften news workers imprisoned in Hong Kong

in whom they are known to have an interest.

SECRET

1,(0) Li had

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