}
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Cypher/Cat A
FLASH HONG KONG TO COMMONWEALTH OFFICE
Telno 1740 22 November, 1967
• COPY 209
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My telegram No. 1727: Hong Kong Border.
HWAY/1
In an attempt to secure quick agreement on 21 November, we adjusted figure for payment to peasants upwards to make an allowance for effects of devaluation (though we rejected Chinese arguments about devaluation in principle). We also agreed to dismantle fence between Man Kam To and Lo Wu in 5 rather than 7 days. On other matters our position remained as in our telegram No. 1699.
2.
Chinese, however, reverted to a number of issues that we believed settled. They may have been playing for time while waiting further instructions in the new situation resulting from Knight's escape. But there now seems a real risk that if we do not make it clear that what we have so far put forward is the full extent of our offer, they will be tempted to prolong the negotiations in order to wring further concessions out of us.
3. I am therefore instructing our team tomorrow to give no ground on any of the points indicated above, and to tell the Chinese that it is up to them to accept them if they sincerely want an early settlement.
40 If Chinese show genuine signs of seeking agreement on other points, however, I would (subject to your views) be inclined to go a little way to meet them on wording of the "compensation" point (paragraph 1 of my telegram under reference) to which they obviously attach great importance. The following alternative formula, which takes greater account of the farmers' "hardships" and also omits reference to Knight, might be more acceptable:
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"In view of the fact that, after the closure of the Man Kam To Bridge in consequence of actions taken by persons from the Chinese side of the border, those C.T. farmers who have farmland in the N.T. believed they were unable to come to the Man Kam To area to engage in their normal farming work, the British side are prepared etc. etc. (as in paragraph 3 of your telegram No. 2334) to relieve any hardship
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