CONFIDENTIAL

3. IN THE CHANGED CIRCUMSTANCES FOLLOWING NORMALISATION AND PARTICULARLY IN VIEW OF THE REMARKS MADE BY THE CHINESE LEADERSHIP ABOUT OBSERVING THE PRESENT REALITIES IN TAIWAN, DO YOU THINK THAT THE CHINESE WOULD BE PREPARED TO TOLERATE OUR MAKING USE OF THE ATTC IN THIS WAY? IF YOU THINK THAT THERE IS A CHANCE, WE SHOULD HAVE NO OBJECTION TO YOU EXPLORING THE IDEA WITH THE CHINESE AUTHORITIES ON AN INFORMAL BASIS, PERHAPS NEXT TIME YOU SEE VICE MINISTER SONG.

4. A RELATED ISSUE IS DISPOSAL OF THE BUILDINGS OF THE FORMER CONSULATE. THE TAIWAN AUTHORITIES HAVE INSISTED FOR YEARS THAT OUR INTEREST CAN ONLY BE SOLD TO THE QUOTE REPUBLIC OF CHINA UNQUOTE. WE HAVE HITHERTO ASSUMED THAT THE CHINESE WOULD BE LIKELY TO TAKE SUCH ACTION AMISS EVEN IF IT WERE HELD TO BE A PRIVATE LAW TRANSACTION NECESSITATED BY THE CLOSURE OF THE POST IN 1972. DO YOU THINK THAT WE STILL NEED TO BE SO SENSITIVE?

OWEN

FILES

FED

NTD

CONS D

A & SD

M & VD

TRED

HK & GD

2

CONFIDENTIAL

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