CONFIDENTIAL

I SHOULD ALSO HAVE INCLUDED AN ASSESSMENT OF CHINESE REACTIONS. THEY ARE LIKELY, AS IN THE PAST, TO OBJECT IN PRINCIPLE TO QUOTAS AND TO EXPRESS SURPRISE THAT WE ARE TAKING THESE MEASURES WHEN THEY HAVE TOLD US AT THE HIGHEST LEVEL THAT THEY THEMSELVES WILL DO MORE TO TACKLE THE PROBLEM. SUCH A REACTION WOULD BE IRRESPECTIVE OF WHETHER OR NOT THEY BELIEVE PRIVATELY THAT ONLY CONTROLS WILL SOLVE THE PROBLEM OR FEEL RELIEF THAT THEY CAN BLAME US FOR RESTRICTING MOVEMENT. THEY WILL ALSO BE PLACED IN A DIFFICULT POSITION BECAUSE THE NATIONAL PEOPLE'S CONGRESS MAY BE ON THE POINT OF MEETING JUST AT THE TIME WE ARE TAKING ACTION.

3. AT ITS WORST AN ADVERSE CHINESE REACTION COULD BE COUPLED WITH AN ATTEMPT TO FRUSTRATE THE IMPOSITION OF A QUOTA BY TOTAL

LACK OF CO-OPERATION AT LOWU, AND EVEN BY DEMONSTRATIONS ON THE BRIDGE. WHILE THIS IS NOT IMPOSSIBLE, I THINK IT UNLIKELY AND CERTAINLY UNLIKELY FOR LONG, CONFUSION AT THE FRONTIER WOULD TERRUPT THE FLOW OF PERSONS INTO AS WELL AS OUT OF CHINA AND THE FORMER IS OF VALUE TO THEM. MOREOVER OUR ACTION WOULD HAVE

VERY SUBSTANTIAL SUPPORT FROM THE PRESS AND PUBLIC HERE AND THE CHINESE WOULD BE SENSITIVE TO THIS.

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