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CYPHER/CAT A
PRIORITY HONG KONG
TELEGRAM NUMBER 387
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TO COMMONWEALTH OFFICE
29 MARCH 1968
401A
19
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ADDRESSED CO TELNO 387 OF 20TH MARCH RFI PEKING PA SINGAPORE
YOUR TELEGRAM 506 : SINO-BRITISH RELATIONS.
CATER SAW CONTACT ON THE AFTERNOON OF 27TH MARCH. THE DISCUSSION
WAS LONG COVER THREE HOURS) AND SERVED MAINLY TO CONFIRM WHAT HAS
ALREADY BEEN REPORTED IN MY TELEGRAM 331. CONTACT APPEARED NERVOUS
AT FIRST AND IN DISCUSSION WAS RAMBLING AND TORTUOUS.
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2. THE DISCUSSION ON CATER'S SIDE WAS ALONG THE LINES OF PARAGRAPH
5 OF MY TELEGRAM 330. IN ADDITION CATER STRESSED THAT THERE SHOULD
BE NO PUBLICITY WHATSOEVER FOR THESE TALKS, AND THAT IF THERE WERE
ANY THEY WOULD BE DENIED AND IMMEDIATELY CALLED OFF. CONTACT MOST
READILY AGREED WITH THIS AND INDEED EMPHASISED THAT THIS POINT WAS
OF CONSIDERABLE CONCERN TO THE CHINESE WHO WERE FEARFUL THAT WE
MIGHT ATTEMPT TO MAKE SOME CAPITAL OUT OF THIS APPROACH. WHILST
SHOWING INTEREST, CATER WAS CAREFUL NOT TO BE OVER-ANXIOUS AND HE
PUT THE VIEW THAT FROM HONG KONG'S POINT OF VIEW IT COULD WELL BE
ARGUED THAT THERE APPEARED TO BE LITTLE TO NEGOTIATE ABOUT.
3. THE FIRST HOUR OR SO OF THE DISCUSSION WAS DEVOTED ENTIRELY
TO A MONOLOGUE BY CONTACT WHO CLEARLY WAS ANXIOUS TO EXPLAIN HIS
SPECIAL POSITION AND TO EMPHASISE THAT HE HIMSELF WAS NOT A COMMUN-
IST: BUT THAT THE BANK OF CHINA AUTHORITIES AND CHOU EN LAI HAD
COME TO TRUST HIM, AND IN MANY WAYS TO RELY ON HIM, AS A RESULT
OF VARIOUS INCIDENTAL BANKING DECISIONS'S WHICH THEY INTERPRETED
AS INDICATING THAT HE WAS FRIENDLY TO THE PEKING GOVERNMENT.
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