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intermediary's initial reaction to our approach was somewhat
surprising. He made it clear that in his view any negotiation
with the Chinese about Grey would be an act of folly.
He gave
three reasonsi-
(a) The Chinese would be bound to raise their terms, probably
demanding the release of
newspaper workers imprisoned
in Hong Kong as the quid pro quo.
(b) It would encourage the Chinese to arrest more British
subjects as a means of exerting pressure on us.
(0)
It would embarrass the "moderate" elements in Peking, with
whom the intermediary was in contact, by showing that a
policy of seizing hostages produced results.
At subsequent meetings the intermediary intimated that he
had received messages from the Chinese on the following lines.
He should not go ahead with discussions with the Hong Kong
authorities about an exchange; any negotiation would embarrass
the Chinese authorities and force them to demand a high specific
price for Grey. In fact "there was no price". The Chinese
authorities would prefer simply to release Grey "in their own
time", which would in the view of the intermediary, be in the
fairly near future.
In the conduct of a cover operation of this delicacy the
difficulty is of course to decide how much reliance can be
placed on the intermediary. The Hong Kong authorities have,
however, had much experience with this intermediary. They
regard him as reliable and think that he has faithfully retailed
what the Chinese have told him.
/ We accordingly
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