29.8
Sir D. Allen
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SINO-BRITISH RELATIONS
Hong Kong telegram No. 996 to the Commonwealth Office
reported a meeting between Mr. Cater and an intermediary of the
Chinese communists. Since there has recently been discussion,
in the context of Mr. Grey, of ways in which a dialogue might
be opened with the Chinese, you may care to be reminded how
this channel was established and of the exchanges which have
taken place to date.
2. In early March this year the Manager of the Bank of China
in Hong Kong, Li Choh-Chih, approached Mr. Jay, a British
businessman and a former manager of the same Bank, allegedly
on instructions from Chou En-Lai and proposed that there
should be discussions on an entirely confidential basis to
"settle the Hong Kong question" to the advantage of both the
United Kingdom and China. Li indicated that the basis of
the discussions should be the "demands" put forward by the
Chinese in May, 1967, but the majority of these would only be
insisted on in a token fashion. The most difficult problem
was likely to be the release of political prisoners in Hong
Kong. On the recommendation of both the Governor and the
Chargé d'Affaires in Peking, Ministers agreed that we should
respond to the Chinese initiative (my submission of 18 March).
3. It was accordingly decided that Mr. Cater, formerly
Deputy Colonial Secretary who now holds the para-governmental
appointment of Executive Director of the Trade Development
Council in Hong Kong, should be the Hong Kong Government's
/representative
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