consultation with the Folitical Adviser, it was tactfully suggested to
Mr. Barnacchi that he advise Fr. Lan to forward his proposala

Memoranda reference GEN/PC/1029 of 12th March, direct to Government.

1968 and SCR.15/67 of 21st March, 1968, refer.

3.

This Mr. Lan has apparently done and, having returned to tell Kr.
Bernacchi about it, the latter is now repeating the

Yr. Lan apparently feals information to the Colonial Secretary, strongly
that a delegation of leading Kaifong and Chinese Manufacters Association
sent to Canton with the tacit approval of the Hong Kong Government would
be able to negotiate with the mainland communists a settlement of the
confrontation by offering the release of prisoners

He is confident of being able to arrange and other concessions.

It

for this delegation to visit Canton through his personal contacts with
Hong Kong Anti-Persecution Struggle Committee member.. consider that Kr.
Ian's connections with the local communiste are not as close as he would
have us believe and I have absolutely no indication that any attempt to
use him as any form of intermediary would meet with any encouragement
from the Chinese authorities. is worth recalling that . Lan made a
similar proposal to the Waterworks Department to solve the water supply
crisis in July, 1967, offering, to arrange unlimited supplies of water
from China, and although two Watercorks officials (and a police officer
from Special Branch) gave him the opportunity to outline his proposals
in detail

He was reluctant at a meeting, he was very vague in his suggestions.
also to specify what contact he had with the APSC although he did
mention the names of two ordinary zombers, neither of whom are very

The meeting ended prominent communists, whom he claimed he knew.
inconclusively and those attending it were of the opinion that Mr. Lan
was no more than a sincere but ineffective well-wisher,

GISTRY

/4....

AFE CA

A. 2180

6.7.68

AWARDS

LETTU

CONFIDENTIAL CONFIDENTIAL

с

4.

CONFIDENTIAL

CONFIDENTIAL

Page 2.

While Mr. Lan's points regarding release of prisoners

and reinstatement concur with the current major themen of communist
propagande, I feel that there is little point in allowing the
correspondence to develop further and Mr. Lan should not be given the
slightest encouragement from Government.

(B.F. Slevin)

Director of Special Branch

for Commissioner of Police

0.0. Political Adviser (Ref. (6) in SCB.15/67) ||

GAB/mbi

CONFIDENTIAL

CONFIDENTIAL

+

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(P30 130/1)

Far Eastern Department,

21 April, 1969.

Please refer to my letter of 26 March in which I suggested that you
might like to meet Mr. Garside, the officer in Peking who deals with
consular massa and who is now on leave, to discuss the detention of Mr.
Anthony Grey. I understand from Mr. James Murray that the afternoon of
either 30 April or 1 May would be convenient to you and have accordingly
arranged your appointment for 4.30 p.m. on Wednesday, 30 April.

I shall be grateful if when you come to the Main Entrance of the Foreign
Office off Downing Street you will ask to see me rather than Nr. Garside
as he of course has no permanent office in London.

Miss 8. McGuinn,

57 York Street,

London, .1.

(E. J. Sherland)

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FEC130/1

April 15tal армия

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Far Eastern Department,

10 April, 1969.

212

I enclose a number of press cuttings about another canard by Krs. Grey.
I am afraid that she has become an easy pray for any journalist looking
for a story,

2. As far as we are aware, there is no real evidence to support Ers.
Oray's assumption that the Chinese have held up her letters to Grey.
According to Reuters, who spoke to her about her statement to the press,
hạr deductions were based on a message to her enclosed with Gray's
latest letter to Minn KoĢuinn, This letter, dated ↳ March, arrived
towards the end of the month. In this note to his mother, Grey asked
whether she had received his January letter. was the letter which caused
us some trouble. concluded that because Grey has not received her reply
to his January letter that the Chinese must therefore be holding up her
mail. However, Reuters understand that Hrs, Gray's reply

If this was the case, it was not despatched until mid-February.

This you remember Mrs. Grey has

is unlikely that Grey would have received it before he wrote his tter to
Miss McGuinn at the beginning of March, Reuters also cemented that they
feel that Mrs. Grey has a tendency to exaggerate the number of lettere
she writes.

3. Reuters telephoned the Managing ditor of the "Sketch", which was
responsible for the report in the first instance, to warn them to treat
Hre. Grey's statement with some caution. Unfortunately the story was
already out and as you can see vas

Heuters have erches tra ted by the rest of the British press. again
spoken fairly firuly to Mrs. Gray about giving interviews of this kind
but I fear that it is not likely to have much effect. I am sending a
copy of my letter to Arthur Maddocks in Hong Kong.

7. B. Densen, Esq., OBE,

FKING.

(C. Wilson)

RESTRICTED

Mr. Baker

Bayer

SECRET

2012

100 1014 pa

.

Flag A

Flag B

Mr. Anthony Grey of Reuters

I attach a copy of my submission of 28 March about future

action in the matter of Mr. Grey. In paragraph 11 I have tried

to take account of the P.U.S.'s minute on my earlier submission

of 10 March that we ought to be prepared to swallow a lot of our

pride if we could really get a liquidation of all the outstanding

cases notably Mr. Grey. But you may find it helpful if I

develop the argument at greater length.

2. I emphatically agree that if we could secure the release

of Mr. Grey and also the other detained subjects in exchange

for the release in Hong Kong of the eleven imprisoned news

workers, we should do well to consider such a bargain carefully ·

though the Governor of Hong Kong would still expect us to take

account of the risks there. But in my view the prospects of a

bargain of this kind are very remote; and I would have the

greatest reservations about attempting to put it to the Chinese.

(a) The case of Mr. Grey and the imprisoned workers is

sui generis. Mr. Grey was detained as an act of

retaliation for the "persecution" of the Communist

press in Hong Kong. The Chinese Government presumably

hoped by his detention to prevent the Hong Kong

authorities taking further action against their

important propaganda machine in Hong Kong.

The Hong

Kong authorities were not, in the event, deterred from

so doing and the eleven newsworkers at present in prison

were all arrested and convicted after Mr. Grey was

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(b)

detained. We are virtually certain of the price

for Mr.Grey 's release. Were we prepared to

pay it, we could have him out quickly. But there

are grave objections to paying this price now

(paragraph 9 of my submission of 28 March). The

Chinese would, however, firmly reject any attempt

to introduce the other British subjects into the

equation, maintaining that the latter have all

offended against Chinese law.

The cases of the other British subjects are wholly

unlike the case of Mr. Grey. They are not simply

hostages against the good behaviour of the authorities

in Hong Kong. Few or none of the persons involved

have entirely clean slates. They can be grouped

as follows:-

(1) The Vickers-Zimmer engineer (Mr. Watt)

(11)

(iii)

already sentenced to three years imprisonment

for alleged espionage and unlikely to be

released prematurely.

A ships' officer (Mr. Crouch) arrested on

similar grounds.

A Bank Manager (Mr. Johnston) who may have

committed acts of indiscretion or who may

be held as a hostage because of a financial

dispute between the Chartered Bank and the

Bank of China in Singapore.

(iv) A group of persons who have worked for the

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3.

Chinese propaganda machine in Peking and

who are known to have become too deeply

implicated in internal Chinese politics (the

Gordons, the Crooks, Mrs. Young, Mrs. Epstein).

(v) Two persons (Mr. Barrymaine, Captain Will)

who committed acts of folly which were bound

to bring trouble on them in the circumstances

of the Cultural Revolution.

(vi) Two British members of a group of yachtsmen

of various nationalities who sailed without

permission and against the advice of the

Hong Kong authorities through waters well

known to be claimed by the Chinese.

The Chinese are likely to solve these cases on their merits

and over a considerable period of time, We believe that the

settlement of the Grey case might improve the atmosphere of

Sino-British relations and might thereby contribute to the

swifter solution of some of these cases. But there is no

evidence of any direct link between the cases in the minds of

the Chinese authorities and I fear there is no practical

possibility of linking them with Mr. Grey in any successful

deal. If we persisted in trying to establish the link, we

should merely give the Chinese the satisfaction of having us

eat our words when in the final instance we released the eleven

newsworkers (as we shall have to do) without any commitment on their

part about British subjects in detention.

4.

I should add that the Chinese have in recent weeks granted

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long overdue exit visaa to members of the banking communi-

ties in Shanghai (the Croziers and Mrs. Johnston) despite

the continuing problem of Mr. Grey.

Copy to Mr. Moreton

Jann May.

(JAMES MURRAY)

1 April, 1969

Thank

you

I agree that you are

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SECRET

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Mr Wilsay full Ms Boyd.

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SECRET

Mr. Moreton

MR. ANTHONY GREY OF REUTERS

PROBLEM

Flag A

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Me Bakar

paka 1614

My submission of 28 February envisaged a review of

the problem of Mr. Grey in the latter part of this month.

In the meantime we have made no progress towards his

release.

An offer to the Chinese through covert channels

in Hong Kong to release to China for the remainder of their

sentences the eleven convicted news workers whom the Chinese

have linked with Mr. Grey, has not been taken up. We must

assume therefore that the Chinese intend to keep Mr. Grey

until the news workers have been released in Hong Kong.

Barring unforseen circumstances, all eleven should now be

out of prison by mid-September. The alternatives at

present before us are:

(a) to ask the Governor of Hong Kong to arrange the

immediate release in Hong Kong of the eleven news

workers; or

(b) to let matters take their course in Hong Kong with

the reasonably confident expectation that Mr. Grey

will be let out shortly after the release of the

news workers in September, but almost certainly

not before.

RECOMMENDATION

2.

I recommend alternative (b). Hong Kong Department

concur.

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/BACKGROUND

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BACKGROUND

3. On 28 December the New China News Agency in Peking

published a report openly linking Kr. Grey with the

communist news workers (then thirteen, now eleven) serving

prison sentences in Hong Kong. The report said that

"since the Hong Kong British authorities continue to keep

the thirteen patriotic Chinese journalists in jail, the

Chinese Government is fully justified in continuing to

restrict Mr. Grey's freedom of movement". Shortly there-

after the Chinese resumed their covert contacts with the

Hong Kong Government about Mr. Grey, describing the N.C.N.A.

statement as "the proposed swap for Grey" and indicating

that they expected a reply to their "proposal".

here concluded that the release of the news workers in Hong

Kong itself raised such difficulties as to be highly

undesirable.

Ministers

However it was decided that we should,

through the covert channel, repeat an earlier offer to the

effect that we would be ready to release the news workers

to China for the remainder of their sentences in return

for Kr. Grey.

4. Our offer has been discussed by Mr. Cater, the Hong

Kong representative, with his Chinese contact in a series

of meetings beginning on 27 January. In messages which

the contact has said he was relaying from Peking, the

Chinese have insisted on release in Hong Kong. We have

had a virtual admission that they would be unable to

persuade the news workers to return voluntarily to the

/mainland.

2

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mainland. We have modified our original proposal to the

extent of offering release in kacao. Mr. Cater, however,

has kept insisting that release in Hong Kong itself is

out of the question, in the hope that if we could convince

the Chinese of our determination on this point, they might

retreat from their intransigence. But to no avail; and

I think that we must now conclude that our offer has been

rejected.

5.

Aspects of the covert discussions are, however,

relevant to our future decisions.

In a message supposed

to emanate from Chou En-lai the Chinese offered, in return

for a settlement of the Grey case, unspecified improvements

in Sino-British relations extending both to other British

subjects in China and to trade. Balancing the benefits,

another message contained a veiled threat: if it was our

intention to release the ten of the news workers in due

course in September and then try to trade r. Grey for the

eleventh, these tactics would not work.

ARGUNENT

6. If we conclude that our offer has been rejected, we

must now proceed on the basis that the Chinese intend to

hold on to Mr. Grey until all eleven news workers have

been released. Ten of them are due for release with

remission next September. The eleventh, Wong Chak, (sentenced to five
years imprisonment in September 1967)

is not due out with full remission until February 1971.

But the Governor has now agreed to set in motion an exercise

- 3 -

ARAPET

/designed

[

i

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+

designed to ensure his release by September of this year

without appearing to bend the law in a flagrant manner.

Essentially he plans to review all the cases of prisoners

sentenced to terms longer than four years. All being

well, this should result in a reduction of Wong Chak's

sentence, though it may be some weeks before this can be

made public knowledge. We are, however, justified in

proceeding on the assumption that all eleven news workers

will now be out by mid-September.

It

7. We accept that the immediate release of all the news

workers would almost certainly result in the release of

Mr. Grey. Will this still be the case in September?

might be argued that they are a declining asset; that

their value to the Chinese diminishes as September approaches;

and that their release then would therefore be regarded by

the Chinese as of practically no value. However, our

experience of the Chinese suggests that they will not be

at a loss to present the release of the eleven, whenever

it comes, as a "victory". They will have prevailed to the

extent of having held on to Mr. Grey until we have "stopped

the persecution of patriotic news workers in Hong Kong".

While there has been some variation over numbers the Chinese

have always justified their detention of Mr. Grey exclusively

in the context of the treatment of their news workers in

Hong Kong

We think it unlikely that they would start,

after the release of the news workers, to hold him against

a wholly different category of prisoner.

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18.

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SECRET

8. I conclude therefore that the choice in practice

confronting us is:

(a) to bring the Governor to agree now to the immediate

release of all eleven news workers in Hong Kong in

(b)

return for appropriate assurances that this will

result in the release of Kr. Grey; or

to let matters take their course in Hong Kong with

the reasonable expectation that Mr. Grey will be

out in September.

9. The dangers of the first course are clear. The

Governor has throughout opposed the premature release of

convicted prisoners in Hong Kong. We agree with him that

such a move would damage public confidence in the Colony;

would be interpreted by the communists as an indication

that we lacked firmness; and, by providing a precedent

of willingness to disregard the courts in a flagrant manner

and for a political purpose, impair the future credibility

of the sanction of imprisonment. The likely encouragement to the Chinese
to adopt a similar policy again, if they now

succeed, must also be taken into account.

10. The difficulties in the way of the second course are

also formidable:

(a)

Will Mr. Grey's health stand up to this prolong-

ation of his ordeal? This is a point we continue

to watch very carefully. Though his conditions

of detention remain highly unpleasant, there has

been a slight improvement recently to the extent

/that

- 5 -

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י.

+

·

[

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(b)

that he is now allowed upstairs to his books.

Careful medical examination by Chinese doctors

in December appears to have relieved his mind

about his physical health; and his recent

letters to his mother, while critical of H.M.G.,

have been relatively cheerful and extremely

balanced.

Can we convince Parliament and the public that

our refusal to accept what is now generally

believed to be the Chinese price is justified?

Much must depend on Reuters. Mr. Long, the

General Manager, while fully sympathetic to our

difficulties in Hong Kong, has been pressing us

privately for the immediate release of the news

workers. But he has said that Reuters would not

wish to embarrass us by taking up this position

publicly. It is difficult to predict how public

opinion might move in coming weeks.

As we

approach September it should be easier to hold

the situation

-

provided that there is a reasonable

expectation that the affair will be settled by

September at the latest. (For this reason the

sooner the judicial process referred to in paragraph 6 above is
completed and it becomes.

public knowledge that all eleven news workers will

be coming out in September, the better). Meantime

we are not without ammunition to meet public

/criticism.

- 6 -

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criticism.

For tactical reasons we have not

wished to stimulate indignation against the

Chinese lest this would lead to increased

pressure for unhelpful measures against them in

this country. We have therefore refrained from

using to the full the strong arguments for refusing

to pay ransom in Hong Kong. We have, however, a

good case and could deploy it if necessary.

More-

over, if need arose, we could make public the

continuing refusal of the Chinese to entertain

the idea of a reasonable solution through deport-

ation of the news workers to China.

(c) Will continuing refusal to meet the Chinese terms

be likely to result in a hardening in their policies

towards Hong Kong? We do not know what precisely

is happening among the top leadership in Peking.

There are some indications of serious policy

differences.

However, since the beginning of

1968, even at moments of extreme internal agitation,

there has been no indication that the leaders were

prepared again to jeopardise their chances of

recovering their following in Hong Kong or, more

important, their large foreign exchange earnings

from the Colony by further radical initiatives.

We do not suppose that they would take such a risk

now.

11. Despite the difficulties therefore, my conclusion is

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/that we

*

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that we can probably hold the position until September.

If this is so, what we have to decide is whether the

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