inviting the aged Dr. CHANG Shih- chao down to Hong Kong for discussions
or (and this seemed more likely) making an approach to Government
through a former Unofficial Member of Council. Referring back to the
start of our discussion, I wondered whether the presence of Mr. Dick LEE
in the Bank of China might have something to do with this. avare, as I
has reported also to Jay in the past, that Mr. Dick LEE was keen to
renev his old contacts with the local communists and perhaps might even
be planning to panev a suggestion which he had made in May 1967 that I
personally should meet LEUNG Wai-lam and others "For a cup of tea". The
fact that Dick LEE had been seen in the Bank of China with members of
the N.C.N.A. staff
/contd.
I vas
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obviously had set my mind thinking in this direction. At first Jay was
inclined to cast serious doubts as to whether PEI would be so
ill-advised as to try and start up another channel into the H.K.G. He
also had serious doubts as to whether the local communists would be
prepared to use somebody like Dick LEE even though it was known that he
was very anxious, perhaps over- anxious, to renew his contacts with
local communists. In spite of Jay's comments, however, I said quite
firmly that it was my opinion that LI should, as a matter of some
urgency, enquire of FEI whether indeed he and others had been
considering this possibility, and if this proved to be the case, that LI
should in no uncertain fashion tell them to cease their activities. It
was important for Jay, LI and Peking to understand that the present
channel was the only channel in existence and that the H.K.G. would not
be prepared to consider the setting up of any other channel.
I said that the second point I had to make was a rather more serious one
which had caused us a great deal of concern: reports received had also
indicated that FEI was avare of at least part of the proposals which had
been made concerning the release of the 11 convicted newsvorkers. I then
proceeded to tell Jay that we had received reports that FEI had said
very recently that he was avare that the H.K.G. had approached a "senior
former member of the Bank of China" (undoubtedly, I said to Jay, a
reference to himself) with the proposal that, in exchange for the
release ofth Grey, the H.K.G. would be prepared to "deport" the 11
nevsvorkers: FEI had described the proposal as being "stupid" and
"unacceptable". And then, embroidering a little, I said that
additionally FEI had commented that the former Bank of China official
had acted incredibly stupidly in this matter and consequently had been
given a very serious rebuke by the Chinese authorities with the
admonition that he should not be so silly in future. I said that we were
seriously concerned about the security of the channel insofar as the
Chinese vere concerned: that if FEI were aware of the proposals made on
27th January then presumably a number of other minor communist
dignitaries would also be privy to the "secret discussions". Jay made no
attempt to rebut anything that I said but appeared to accept the
situation: by way of explanation and in defence of LI he said that he
was quite sure that FEI did not know of the detail of the negotiations
but it vas possible (and here he referred back to previous discussions)
that LI, in his move to "muzzle" FEI and quieten down the Ta Kung Pao,
might well have suggested that the reason for this move was that
discussions vere under way concerning the release of the 11 newsworkers:
that FEI, knowing that LI saw a great deal of Jay, might well have added
two and two together and got somewhere near the right ansver. I said
that I vas not prepared to accept this: that it was too much of a
coincidence that FEI should get so near to the truth
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H
8.
in his comments.
Knowing of Jay's dislike of FEI
I suggested that the sooner LI were told of this and our concern for the
security of the channel the better. I suggested that in these comments
of FEI's on the alleged "negotiations" I saw a specific attempt by FEI
to assassinate the good character and standing of Jay: it seemed to me
to be a question of self-protection on the part of Jay to ensure that
his channel with me
I further commented should be protected completely. that it was my
understanding that FEI was expecting to be recalled to Peking soon for
consultations and that if this vere the case then undoubtedly he would
have a further chance and this time where it mattered most to attack the
character and standing of Jay himself. By this time Jay was convinced of
the neɗd to ensure that FEI vas prevented from doing anything more to
estab- lish a channel and in particular that there was need to re-check
on the security of the channel, from the Chinese point of view.
As I vas about to leave Jay's office he asked whether I would authorise
him to speak some time to Mr. Saunders of the Hongkong & Shanghai Bank
with the request that, should somebody speak to Mr. Saunders about Jay's
activities and in particular his contact with the H.K.G., Mr. Saunders
be asked to refer such persons I said that I found this rather an odd
request and to Jay himself.
He that I really sav no good reason for Jay to act in this way.
explained that, originally when it had been suggested that a channel be
set up in Hong Kong through Jay, Saunders was proposed as a apparently
Jay had given the possible contact for the H.K.G.: impression to Peking
and to LI Cho-chih that Saunders was to a certain extent avare of the
existence of the channel and in broad
Whilst appreciating Jay's terms of what was being discussed. point I
nevertheless said that I thought it would be most unfortunate if he vere
to start sowing ideas and questions in the mind of Mr. Saunders: that I
could not envisage circumstances in which Saunders would be approached
(presumably by a local communist) with a question as to his knowledge of
Jay's part in the "secret channel". ually Jay asked whether I would have
any objection if he merely put the comment to Mr. Saunders that if
anybody ever approached Saunders with questions about Jay's activities
in Hong Kong then Saunders
I said that I saw no objection should refer that person to Jay.
Event-
to this but commented that it seemed a v ery odd thing to say to Mr.
Saunders who might well start wondering why Jay was approaching him in
this way and might even become "suspicious, say, of Jay's
Jay appeared to hoist legitimate activities in the money market.
this in, and said that he would think the matter over.
9.
+
From the beginning and throughout this long discussion,
he livened up a Jay seemed depressed, vorried and pre-occupied: little
when I taunted him with "FEI's comments", and briefly became his old
confident self when talking of the need to "do something" about FEI.
ев
!
6th February, 1969
C.C.
D.S.B. H./A.R.G. B.S.S.
(J. Cater)
SECRET
الأمان
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Political Adviser,
I.
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About noon on Friday, 31st January, Mr. K.C. Jay telephoned asking for
an early discussion: accordingly I agreed to meet him at about 5 p.m.
2.
Jay said that in discussion with LI Cho-chih the previous day (30th
January) LI had sought clarification of two points of detail in the
proposal put to him on 27th January. They were:-
3.
(i)
(ii)
referring to the need for the newsworkers to make a Formal application
for release to China, Li asked what precisely the H.K.G. had in mind: he
felt that a formal petition to the Governor would be difficult to
obtain. I suggested to Jay that there had never been any question of a
formal petition as such but that it vas essential for the Governor to
have something in writing from the prisoners evidence 'that it was
indeed their wish to be released to China. Jay then explained that he
had originally, on Tuesday, 28th January, in discussion with LI, taken
the more strict line of suggesting that a formal petition was required
so that if there were any query raised by the Chinese on this there
would be room to manoeuvre.
I said that I would consult A.E. the Governor on this and work out a
form of words to cover the situation;
LI had also raised the question of how the nevsvorkers would be released
to China would they first be released here in Hong Kong or perhaps taken
a few at a time to the border, etc., etc. I explained to Jay that we
proposed taking those news workers who had opted for release to China
under escort to Lo Wu for handing over to the Chinese authorities at the
border.
Timing, as I had already pointed out to him in previous discussions,
vas, of course, important: it was our intention that the newsworkers
should cross the border at a time when things are normally quiet and
when there is no rail traffic between China and Hong Kong.
Jay was impressed by what he termed a real change in LI's attitude:
whereas on Tuesday, 28th January, he had been rather offhand and
critical of the H.K.G. proposals, he was nov quite co-operative. By way
of example, Jay said that on the Tuesday (28th January) LI, in criticism
of the proposals, had suggested that possibly the best thing would be to
wait until September when 10 of the 11 journalists would be released in
any event: LI now took the line that the sooner this question of Grey
and the newsworkers was resolved the better and that with improving
conditions between China and Hong Kong perhaps with a little good will
on both sides the whole question could be satisfactorily cleared up.
Although Jay felt that it was far too soon for any reaction to have been
received from Peking to a proposal made only two days before,
nevertheless from the long discussion which he had had with LI he gained
the impression that somebody in authority and his guess is possibly the
Communist Party H.Q. in Peking had advised LI of the need to adopt a co-
operative attitude.
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/contd....
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4.
2
Jay said that he had that day received information from Peking that the
Croziers had been given the choice of either travelling by air from
Shanghai to Canton or by train: Jay said that this vas unusual and he
saw in it an attempt on the part of the Chinese authorities to be as
helpful as possible with the Croziers.
5.
As discussed with you, I said to Jay that he should be hearing from
Government within the next few days, probably next He vas Wednesday or
Thursday, about his appointment as a J.P. obviously pleased, but
possibly because he felt a little guilty at shoving pleasure at once
said that this vas really a matter For the H.K.G. and the Governor in
particular to decide on the merits of the case.
6.
at 12 noon.
I arranged to see Jay the following day (1st February)
·
·
II.
Meeting on Saturday, 1st February.
7.
As agreed with H.E. the Governor, I said to Jay that it was important
that H.E. should have some evidence in writing from the imprisoned
nevsvorkers to the effect that they wished to be released to China. A
formal petition was certainly not necessary: the application could be
made either on the usual prisoners request form or if that vere too
difficult it might be possible simply to have the prisoner dictate a
statement to a prison officer and then sign or chop it. I suggested that
the form of vords to be used might be along the following lines: "For
personal reasons I wish to state that I desire to go to 'X' village in
'Y' province where I intend to reside in future without returning to
Hong Kong. May I be released from prison for this purpose?" I explained
to Jay that the purpose of mentioning a village or province vas
basically to overcome any problem which might exist in requiring the
prisoner to say in writing that he wished to leave Hong Kong "for
China". Jay appreciated this point but then went on to express grave
doubts as to the advisability of requiring the prisoner to include the
After phrase "without returning to Hong Kong" in the statement. some
discussion I agreed that this was not absolutely essential although
clearly it had been included in support and in extension of the point
made in the original proposal that nevsvorkers being released to China
were not to return to Hong Kong. In the circum- stances I agreed that
this particular phrase should be deleted. Jay also suggested, and I
agreed, that he should inform LI that this form of words had been
suggested by me and not by the Governor so that here too there might be
room to manoeuvre later on.
8.
As agreed, I mentioned to Jay that a representative of the N.C.N.A. had
telephoned your office seeking a meeting to discuss prison conditions. I
said that, bearing in mind what had happened last November, ve vere
concerned lest this might be an attempt by the N.C.N.A. either to muddy
the waters on the present proposal or (and clearly as bad) an attempt by
LEUNG Wai-lam to "get back into the game" and try to restore his
battered prestige in Peking. On the other hand it vas possible that the
N.C.N.A.
SECT
/contd.
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might be acting on instructions from Peking and in these circumstances
we would not wish to snub them. Jay was confident that the local
N.C.N.A. knew nothing of the present negotiations: it was possible that
the N.C.N.A. Peking might have a vague idea that some form of discussion
or dialogue was being carried out in Hong Kong but he very much doubted
whether
He undertook to they would know or be told specific details, make
enquiries about the situation, but counselled that mean- while, if the
N.C.N.A. were to contact you again, you should insist on knowing
precisely what they wished to discuss and exactly who would be seeing
you: in'no circumstances did he think it wise that you should see such
junior persons as TAM or PUN but that you should insist on seeing either
the Director or at the very least one of the Deputy Directors.
III.
9.
Meeting on 3rd February.
During the morning of 3rd February Jay telephoned to say that he would
like to see me as soon as possible: I arranged to meet him at 12.15 p.m.
10.
Jay
Jay said that he had made enquiries locally concerning
It is, as Jay the N.C.N.A. request for an interview with you. suspected,
a local initiative and the approach is not being made on the
instructions of Peking. The subject for discussion is apparently not to
be prison conditions but rather the incident which occurred outside the
China Products Store in Kovloon which resulted in the arrest and
conviction of store employees. had ascertained that it was not in fact a
"protest" but allegedly a desire on the part of the N.C.N.A. to explain
the situation to you. Jay said that the decision whether or not to agree
to see the N.C.N.A. representatives obviously rested with you and the
H.K.G. but that he could see little advantage coming From such a
meeting: indeed, coming at this time it might be harmful although the
fact that we had advised him of the N.C.N.A. approach clearly would help
ensure that the N.C.N.A. did not cause too much trouble.
11.
Jay vent on to say that he had had further discussions with LI about the
George Brown letter of 1967. He felt that possibly there had been some
misunderstanding of what LI had meant or said about the letter when Jay
put the H.K.G. proposals to him on 28th January, Apparently.there had
been no specific Peking decision to turn down the George Brown proposal
concerning the release of Anthony Grey but that the intentions of the
Peking authorities had been made clear to LI in the contingency
instructions which he had received for the November "negotiations" which
in the event did not take place. According to LI, at that time he was
advised that if the H.K.G. had countered the request for the release of
13-1 with a suggestion that the newsworkers be "expelled" to China, then
he should reply that such a proposal was unaccept- able.
/contd..
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12.
Jay reported that LI was proposing that day to announce to the staff of
the Bank of China that CHEUNG Wan- chung had been recalled to China on
re-assignment and that
e would not be coming back to Hong Kong.
13.
Jay then, with a great deal of play-acting, said that he vas about to
tell me something of the greatest secrecy and that I must undertake to
inform nobody, not even H .E. the Governor. He had received a letter
from CHOU En Lai to the effect that for some time he had been
considering transferring LI Cho-chih from Hong Kong (not, Jay explained,
because LI had done anything wrong but simply because he was due for
transfer, possibly on promotion) but that he had been kept in Hong Kong
because of the existence of this channel. However, it had now he had in
become necessary for CHOU to reconsider this matter: mind the
possibility of transferring LI from Hong Kong and promoting him to
become Minister for Foreign Trade. Jay claims that his comments on this
possibility had been requested by CHOU, also his views as to LI's
successor.
44
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4th February, 1969.
c.c.
D.S.B.
H ./A.R.G.
E.S.S.
lla
(J. Cater)
TOP
HONG
No.
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TSX 77...
Date 54869
KONG
RNMENT
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·
COPY
2005
COPY NO. 3
CYPHER/CATNAN
ROUTINE HONG KONG
SLEGRAM NUMBER 205
TO FOREIGN AND COMMONWEALTH OFFICE
DATED 6 MARCH 1969
TOP SECRET
ADDRESSED FCO AS HYTEL NO. 205 OF 6TH MARCH RFI PEKING,
MY TELEGRAM NO. 134 # GREY.
34 0
CATER SAW CONTACT AGAIN ON 25 AND 27 FEBRUARY BUT LITTLE THAT
WAS NEW EMERGED, CONTACT SAID THAT IN LI CHO-CHIH'S NEW OUR
LATEST VARIATIONS CRELEASE TO HACAO OR AT SEA) WERE UNLIKELY
TO BE ACCEPTABLE IN PEKING.
2. FULL RECORD FOLLOWS BY BAG.
FCO PLEASE PASS ROUTINE PEKING.
SIR D TRENCH
FILES
FAR EASTERN DEPT.
HONG KONG DEPT
P.U.S.D.
MH. MORETON
SIR A. GALSWORTHY
SIR J. JOHNSTON
P.S. TO LORD SHEPHERD
PRIVATE SECRETARY.
XXXXX
REPEATED AS REQUESTED
TOP SECRET
TOP SECRET
RECEIVED IN REGISTRY No.50
31 JUL 1969
has sex.
Private Secretary
Le 130/1
404A
ANTHONY GREY OF REUTERS
Lord Shepherd is to discuss Mr. Grey with the Secretary
(Lord Shepherd
of State this afternoon, and has asked that in the meantime
a note be submitted to the Secretary of State.
discussed the problem in detail yesterday with Sir. J. Johnston
and Far Eastern Department.)
SULMARY OF THE PROBLEM
2.
Following a statement by the New China News Agency on
But
28 December, which sought to justify the continuing detention
of Mr. Grey by reference to the thirteen (now eleven) news-
workers in prison in Hong Kong, an offer was made by the Hong
Kong authorities through covert channels to release the
newsworkers to China for the remainder of their sentences.
The reaction by the Chinese has not been encouraging.
the Chinese may have regarded our offer as an indication
that we were weakening. It may be worth, therefore, holding
to a firm line in the covert exchanges for two or three weeks
more before concluding that our offer has been rejected.
Meanwhile Mr. Long of Reuters has been pressing us for the
release of all eleven newsworkers.
3.
If we are driven to conclude that our offer has been
rejected, the alternative will be:-
a) to release the eleven; OF
b)
to accept that there is practically no prospect of
Mr. Grey's release before September at the earliest.
/ 4.
To
TOP SECRET
TOP SECRET
4.
To release the eleven would almost certainly secure
Mr. Grey's release. But it would be an immediate and
serious blow to confidence in Hong Kong. And it would have
grave long term implications: it could undermine respect for
the law in Hong Kong and encourage the Chinese to future
hostage-taking.
5. Ten of the eleven journalists are due out in September.
If Mr. Grey has not been released by then, we must press the
Governor to agree simultaneously to the release of the eleventh
(not due out until February 1971). Given the link
established in the Chinese statement of 28 December, there
can be little doubt that release of all eleven in September
would secure the release of Mr. Grey. But this would mean
a further delay of six months in settling the affair.
a) Would Mr. Grey's health stand up to this prolongation
of his ordeal? The latest indications are that he
continues to bear up well.
b)
c)
Would continuing refusal to meet the Chinese terms be
likely to result in a hardening in their policies
towards Hong Kong? They seem unlikely to give up
their present policy of non-violence simply on account
of our unwillingness to settle the Grey affair on
their terms.
Could we convince Parliament, Reuters and the public
that our refusal to accept the Chinese terms is justified?
We could meet public criticism by stressing
not so far done so
-
-
as we have
the dangers in releasing the
TOP SECRET
2
/ newsworkers
TOP SECRET
newsworkers, and by revealing that we had pressed
the Chinese to agree to an exchange.
PRELIMINARY RECOMMENDATIONS
6. Far Eastern Department hope that the Secretary of State
could agree at this stage
a)
b)
that we should wait another three weeks before
concluding that our offer of a release of the
newsworkers to China (or Macao) has been rejected;
that, if we have then to conclude that it has been
rejected, we again consider whether the risks of the
premature release of the eleven newsworkers in Hong
Kong continue in our view to be such as to outweigh
the advantages of an early settlement of the Grey affair.
FURTHER BACKGROUND AND ARGUMENT
Origins of recent negotiation
7. On 28 December, 1968, the New China News Agency in Peking
published a report openly linking Mr. Grey with the communist
newsworkers (then thirteen, now eleven in number) 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 gaol, the Chinese
Government is fully justified in continuing to restrict Grey's
freedom of movement".
8. In the wake of this statement the Chinese resumed their
unofficial contacts with the Hong Kong Government on the
subject of Mr. Grey, through covert channels in the Colony.
The first such approach in the present series was made in
/ January 1969,
TOP SECRET
-3-
TOP SECRET
January 1969, when the Chinese described the N.C.N.A.
statement as "the proposed swap for Grey", and indicated
that they expected a reply to their "proposal".
9. After very careful consideration Ministers concluded
that the release of the eleven remaining imprisoned newsworkers
in Hong Kong itself raised such difficulties as to be highly
undesirable. However it was decided that we should, through
the covert channel, reactivate an earlier suggestion that the
Chinese might accept the deportation of the eleven newsworkers
if presented as "release in China", in lieu of their release
in Hong Kong. While we were not sanguine of the chances of
such an exercise succeeding we felt that it was the only
possible way of making progress towards Mr. Grey's release
and that we owed it to him to make the attempt.
Negotiations
10. Since January Mr. Cater, a Hong Kong official, has been
in touch with the contact on the Chinese side on frequent
occasions.
On 27 January Mr. Cater told the contact that
we should be content to release all the eleven remaining
newsworkers to China provided that they gave an undertaking
(in writing if possible) to go willingly. Subsequently in
the course of continuing discussions it was made clear to the
contact that we should not necessarily take a rigid stand
against the return of the newsworkers to Hong Kong upon
completion of their sentences; that we should be flexible
about the form of their undertaking to go willingly to China;
and that we should be prepared to see them go to Macao rather
/ than the
TOP SECRET
+
TOP SECRET
than the mainland itself if the Chinese so preferred.
Chinese replies
11. The contact has two channels to Peking, one through an
important Bank of China representative in Hong Kong and the
other a more personal one direct to the office of Chou En-lai
in Peking. We have had replies of a sort to our proposals
through both channels.
a)
b)
In the first week of February the contact relayed from
the Bank of China official a message, presumably
emanating from Peking in the first instance, that the
proposal to release the newsworkers to China was
unacceptable. The reason given was that the communists
would be unable to persuade the eleven newsworkers to
return willingly to China.
On 21 and 22 February the contact relayed a message
purporting to come from Chou En-lai which stated that
1) the newsworkers should be released in Hong Kong
itself;
il)
a solution of the Grey question would be followed
by a significant improvement in Sino-British
relations (no details were given but intermediaries
inferred that these benefits would include the
release of some other British subjects in China
and improved trade);
iii) an early move by the British side towards a solution
was needed.
The contact went on to comment that if a settlement were
/ not
TOP SECRET
- 5-
TOP SECRET
not found in the next few months the political balance
in Peking might shift to Chou En-lai's disadvantage
and a tougher line be adopted over Mr. Grey. The
contact also attributed to the Bank of China official
the view that if the British tactics were to wait until
the completion of the sentences of ten of the newsworkers
in September 1969 and bargain subsequently in an attempt
to exchange Grey for the eleventh, then this would be
unacceptable to the Chinese.
Views of Far Eastern Department
12.
At the outset we were not inclined to give these
negotiations a very high chance of success and it must be
conceded that the indications so far are discouraging.
Nevertheless the negotiations have not formally broken down.
It is not possible to be sure whether the Chinese have said
their last word or whether their statements hitherto represent
a negotiating position.
13. One effect of entering into these negotiations has
undoubtedly been to encourage the Chinese in the belief that
we are aoftening on the question of Mr. Grey and that they
only have to push a little harder to gain a substantial
concession. In these circumstances there would seem to be
advantage in continuing to make clear to them the limits
within which we are prepared to negotiate.
14. In the message supposed to emanate from Chou En-lai the
Chinese offered unspecified improvements in Sino-British
relations. They imply that these would extend to both other
/ British
TOP SECRET
6
TOP SECRET
British subjects in China and trade. In this respect it is
important to realise that the other British subjects in
difficulties in China do not fall into the same category as
Mr. Grey, i.e. straight political hostages.
to have infinged Chinese laws or regulations;