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OR BECAUSE LOCAL OPINION TURNED AGAINST THE SCHEME (AS IT WELL

NON MIGHT) AND THEY WANTED TO CLIMB ON THE BAND WAGON. LO-OPERATION BY THE COMMUNIST OWNED OR DOMINATED ENTERPRISES

COULD FACE US WITH SOME AWKWARD PROBLEMS BUT THEY WOULD BE LOCAL ONES PROVIDED THAT PEKING DID NOT WEIGH IN ON THEIR BEHALF.

8. WHEN THE GREEN PAPER PROPOSALS (1.E THE SEMI-VOLUNTARY SCHEME) WERE PUBLISHED, THE COMMUNIST PRESS REPORTED THEM FACTUALLY BUT DID NOT COMMENT. THE MANAGEMENT OF THOSE COMMUNIST CONTROLLED ORGANISATIONS WHICH WERE APPROACHED IN THE COURSE OF THE OPINION POLL CLEARLY REFERRED FOR INSTRUCTIONS AND THEN DECLINED TO COMMENT

WE THEREFORE HAVE NO INDICATION OF COMMUNIST VIEWS ELTHER WAY ON THE VOLUNTARY SCHEME. THERE HAS BEEN NO OPPORTUNITY FOR SIGNIFICANT PUBLIC DEBATE ON A COMPULSORY SCHEME, SO WE HAVE EVEN LESS EVIDENCE TO ASSESS THEIR LIKELY REACTION TO THAT.

9. MY OWN CONCLUSION IS THAT WHILE THERE ARE PLENTY OF LOCAL

QUESTIONMARKS, THE INTERNATIONAL OBJECTIONS TO A COMPULSORY SCHEME ARE TOO SMALL TO OUTWEIGHT THE ADMINISTRATIVE AND OTHER ADVANTAGES, AND I AM THEREFORE INCLINED TO RECOMMEND TO THE EXECUTIVE COUNCIL

THAT WE GO AHEAD.

10. IF APPROVED BY EXECUTIVE COUNCIL, WE WOULD PROCEED TO

PUBLISH A WHITE PAPER. AT THIS POINT, IF IT WERE CLEAR THAT WE HAD MISJUDGED THE SITUATION AND THERE WERE SERIOUS LOCAL OPPOSITION INCLUDING COMMUNIST OPPOSITION, THERE WOULD STILL BE TIME TO WITHDRAW, THOUGH NOT WITHOUT EMBARASSMENT IF THE OPPOSITION WAS OBVIOUSLY COMMUNIST INSPIRED.

11. BEFORE WE GO TO EXECUTIVE COUNCIL, I WOULD BE GRATEFUL FOR

YOUR VIEWS. ! APOLOGISE FOR TELEGRAPHING, BUT I WOULD WELCOME YOUR VIEWS BEFORE I LEAVE FOR THE U.K ON 5TH JULY.

MACLEHOSE

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MR CORTAZZI MR MURRAY

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