to refer with some frankness to the special

circumstances of Hong Kong and the real implications

for the Colony should we concede defeat in this matter

by the Chinese.

(b) Our argument that if the Chinese were successful in

using Mr. Grey as a hostare they might well be encouraged

to try the same thing with other British subjects in

future also applies with equal validity to the release

of the Krogers. It would seem best to leave this

w.answered.

-

(c), There is no parallel between the deal made over the

Krogers and the proposed deal with the Chinese to release

the Hong Kong prisoners outside the Colony. Mr. Long's

point a subtle one - is that in agreeing to release

the Krogers to Poland we were giving the Russians what

they wanted, while in offering to release the newsworkers

to China we knew we were proposing something to which the

Chinese were strongly opposed. There is some validity

in this. But in each case we did offer what was in

and in an effort to make an exchange

effect an exchange;

Jan

more palatable to the Chinese we showed considerable

flexibility. I have thought it worth reminding Mr. Long

how far we were prepared to go in offering the Chinese

a reasonable solution. This involves setting down the

essence of the arrangements offered to the Chinese through

covert channels earlier this year. I have however

avoided any mention of the channel as such (although : 1

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