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5. I WENT ON TO REAFFIRM OUR GREAT DESIRE TO SETTLE THIS CRISIS PEACEFULLY, BUT SAID WE RESERVED THE ULTIMATE RIGHT TO USE FORCE

IN DEFENCE OF OUR OWN TERRITORY. IF FORCE WAS USED, WE WOULD BE

''COUNTER-ATTACKING IN SELF-DEFENCE’’.

6. ZHANG OBJECTED TO MY REFERENCE TO THE SPRATLEYS AND PARACELS,

BUT OTHERWISE MADE NO COMMENTS OF SUBSTANCE. I ENDED BY ASKING

THAT CHINA'S INFLUENCE BE USED TO ENSURE THE IMPLEMENTATION OF

SCR 502.

7. I AM UNDER NO ILLUSIONS THAT THE CHINESE POSITION WILL CHANGE

AFTER THIS DEMARCHE, BUT THEY WILL HAVE REGISTERED THE POINTS

AND THIS MAY ENCOURAGE CAUTION. THE BEST WE CAN HOPE IS THAT CHINA

REMAINS NEUTRAL.

CRADOCK

THIS TELEGRAM

WAS NOT ADVANCED

FCO

S AM D

CABINET OFFICE

ADDITIONAL DISTRIBUTION

FALKLAND ISLANDS

COPIES TO

PS/CHANCELLOR

SIR K COUZENS MR LITTLLOR

MR HAWTIN

MR PERETZ

ILEM

TREASURY

MR FULLER. DIO CABINET OFFICE MISS DICKSON (EIP DIVN) D/ENERGY

SIR M PALLISER CABINET OFFICE

2

CONFIDENTIAL

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