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4. THERE COULD BE OTHER AND LESS OBTRUSIVE WAYS OF HANDLING THIS PROBLEM IF THE CHINESE WISH TO TAKE THE INITIATIVE (OUR PROPOSAL WAS DESIGNED TO ENABLE THEM TO KEEP OUT OF IT) AND SHOULD BE SURPRISED IF SOONER OR LATER AND THROUGH ONE CHANNEL OR ANOTHER WE DO NOT GET HINTS OF WHAT POSSIBILITIES THE CHINESE HAVE IN MIND. SO I SUGGEST THAT THERE IS NO NEED TO TAKE THIS REPLY TOO TRAGICALLY, MARKET FORCES ARE ON OUR SIDE. THE IMPORTANT THING IS THAT THE PROBLEM HAS BEEN SQUARELY PUT TO THE CHINESE, I AGREE WITH THE AMBASSADOR THAT WE SHOULD NOT ARGUE ABOUT THEIR REPLY, AND I SUGGEST NO FORMAL OR INFORMAL REPLY IN PEKING IS NECESSARY,
5. HOWEVER, WE MUST PUT ON RECORD AGAIN WITH THE CHINESE THE REALITY AND IMPORTANCE OF THIS PROBLEM AND THAT SOLUTION WILL NOT WAIT INDEFINITELY, I THEREFORE SUGGEST THAT HUA SHOULD BE TACKLED DURING HIS VISIT RATHER ALONG THE LINES OF MY PARA 1 AND THAT THIS SHOULD BE AT S OF S LEVEL. SO AS NOT TO GIVE IT UNDUE PROMINENCE IT COULD BE INCLUDED IN A GENERAL TALK ABOUT HONG KONG AND MENTIONED WITH IMMIGRATION AS AN UNRESOLVED
PROBLEM.
6. IN VIEW OF THE IMPORTANCE OF SECRECY I DO SUGGEST THAT APART FROM THE APPROACH SUGGESTED ABOVE, NEITHER IN PEKING NOR IN LONDON SHOULD DISCUSSION OF THIS SUBJECT BE INITIATED WITH THE CHINESE OR ANYONE ELSE. IF THE CHINESE RAISE IT, WE SHOULD REPLY ALONG THE LINES OF MY PARAGRAPH 1
7. I WOULD PREFER NOT TO ASK THE CHINESE TO MAINTAIN SECRECY (PEKING TELNO 827 PARA 3(D)), IT WOULD LOOK WEAK AND THEY ARE GOOD AT KEEPING SECRETS. ON THE OTHER HAND WE SHOULD TAKE SPECIAL STEPS TO. GUARD CUR OWN SECURITY.
MACLPHOSE
FILES:
HEAD HKA GD HEAD FED
PS
PS/LPS
PS/MR BLAKER PS/PUS
SIR A. DUFF
SIR E. TOUDE (PERSONAT,)
MR CORTAZZI
Po 2.
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