V
STORYT
(o) Li had said that rather than conduct an exchange, Feking
would prefer simply to release Mr. Grey, in their own
good time. The contact explained that this would be in
tùs fairly near future and in any case by the end of the
Jea7. 1 January had been set as the target date for
complete retura to normality in Sino-British relations.
The Governor of Hong Kong kao indicated that he accepts
this message at face value. The Governor holds that any
attempt to proceed with a negotiation for the release of
Mr. Grey through an exchange would constitute an
unacceptable risk to Hong Kong. He feels that the
release of Hsueh alone will achieve nothing and only put
the present channel of communication at risk. We already know that he is decply averse to the simultaneous release of Xsuch and Lo, let alone without a prior guarantee that
thie will secure Mr. Grey's freedom.
7.
They do however
have one caveat. The contacts connexions are exclusively with the "moderate" faction around Chou En-lai and the message will only represent the views of that group. Were they again edged away from power (which we do not now believe likely) the
content of the message would at once be without significance.
/ 8.
H.M. Chargé
SECRET
THIS IS A COPY ·
THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER SECTION 3(4) OF THE PUBLIC RECORDS ACT 1958