China, and whom the Chinese

authorities undertook to accept.

(If contact asked specifically about

repatriation only until the expiry

of sentences, Cater might reply that

this would raise grave difficulties;

but if the Chinese were to make a

firm proposal on these lines,H ho thinks yo

might be prepared to consider it.)

(c) You would expect appropriate

assurances from the Chinese that

they would in return release Grey.

6. After careful consideration we have

reluctantly decided against the inclusion in

your offer of any reference to other British

TOP SLORET

/subjects

NOTHING TO BE WRITTEN IN THIS MARGIN

WOEL 51-2406)

TOF SECRET

subjects in detention.

The Chinese

maintain a clear distinction between Grey,

who is held as a political hostage for alleged

Disdemeanours by the Hong Kong authorities,

and the other British nationals, who are

held for alleged misdemeanours of their own.

To inject the others into our offer would

not in our view help to secure their release

and would frustrate any hopes of a successful

bargain over Grey.

- 5-

TOP SECRET

And

B$241,

I

CYPHER/CAT A

ТОР

This cross

with our reply Li (287

SECRET

BOR & pazy/1 фигур

• Wilm Mr wibomis

tu umwam

TOP

327

COPY NO.Í...

.P IN

ARCIVES No.31

PRIORITY HONG KONG TO FOREIGN AND COMMONWEALTH OFFICE 4 JAN 1969

TEL NO.77

Nun Jm

24 JANUARY 1969

EC 1301

28

TOP SECRET

ADDRESSED FCO TELEGRAM 77 OF 24 JANUARY RFI PEKING,

MY TELEGRAM 28: GREY.

ALTHOUGH I HAVE NOT RECEIVED YOUR VIEWS ON TELEGRAM UNDER REFERENCE

CATER FOUND IT NECESSARY TO SEE HIS CONTACT AGAIN ON 20 JANUARY,

2. CATER SAID THAT THE POSSIBILITY THEY HAD DiscussED ON 7

JANUARY WAS STILL BEING EXAMINED AND HE HOPED TO BE ABLE TO SPEAK TO

CONTACT FAIRLY SOON, CONTACT SAID THAT HE HAD INFORMED LO CHO-CHIR

SIMPLY THAT THE GREY ISSUE APPEARED TO BE DEADLOCKED.

3. CONTACT ALSO SAID THAT HE BELIEVED CHO EN-LAI HAD GIVEN

INSTRUCTIONS TO IMPROVE THE CONDITIONS IN WHICH GREY IS HELD, FOR

EXAMPLE, BY ALLOWING HIM TO HOVE MORE FREELY AROUND HIS HOUSE.

CONTACT APPEARS TO BE CONVINCED THAT GREY'S LIVING CONDITIONS

HAVE BEEN IMPROVED AND SAID HE WOULD ENQUIRE OF PEKING TO ENSURE

THAT IT WAS SO.

FCO PLEASE PASS ROUTINE TO PEKING.

SIR D. TRENCH

[REPEATED AS REQUESTED].

FILES:

FAR EASTERN DEPT

H.K. DEPT

P.U.S.D.

P.S. TO LORD SHEPHERD

HR. HORTON

SIR A. GALSWORTHY

P.S.

TOP SECRET

CYPHER/CAT A

TATE JONG KONG

TELEGRAM NUMBER 44

TOP SECRET

TOP SECRET

Enter

Winter entorns in 16/1

TC FOREIGN AND COMMONWEALTH OFFICE

16 JANUARY 1969

COPY NO.

Jos

paparny

H.K

ADDRESSED FCO AS MYTEL 44 OF 16TH JANUARY REPEATED FOR INFORMATION

PEKING.

PEK ING TELNO. 30.

RECEIVED IN

ARCHIVES No.31

GREY.

17 JAN 1969

FeaBel

PERHAPS IT MIGHT HELP FIRST TO RESTATE TIN, KUNG""" POSITION

OVER THE RELEASING OF CONVICTED PRISONERS.

2. THE GRAVE OBJECTION TO RELEASING PRISONERS IN HONG KONG

WITH NO OBLIGATION TO LEAVE IS THAT IT DESTROYS THE CREDIBILITY

OF THE SANCTION OF IMPRISONMENT FOR CRIMINAL ACTIVITIES

AND OPENS THE WAY FOR PRESSURE TO BE APPLIED AT ANY TIME IN

THE FUTURE TO ENFORCE /NY RELEASE DESIRED. THE CONSEQUENT

DANGERS TO HONG KONG'S FUTURE SECURITY ARE SO SERIOUS AS TO BE

THE ONLY TIME WE HAVE INTIMATED THAT EARLY

UNACCEPTABLE.

RELEASE IN HONG KONG MIGHT BE POSSIBLE WAS THE TENTATIVE

SUGGESTION MADE BY CATER TO CONTACT THAT SHUEH MIGHT BE

RELEASED A MONTH OR SO EARLY, A COURSE WHICH CONTACT ADVISED

STRONGLY AGAINST CHYTEL 2001 OF 20 SEPTEL BLR 1968 REFERS);

IT MAY OR MAY NOT HAVE BEEN PASSED ON BY HIM

P13/18.

(28)

3. RELEASE TO CHINA FOR DURATION OF SENTENCE IS ONLY MARGINALLY

LESS OBJECTIONABLE.

WHILE IT PROTECTS THE PUBLIC FOR THE

PERIOD ENVISAGED BY THE COURTS, IT TOO LARGELY DESTROYS

THE CREDIBILITY OF THE SANCTION OF IMPRISONMENT AND FAILS TO

GIVE THE PUBLIC ANY ADDITIONAL PROTECTION.

4. RELEASE TO CHINA WITH NO RETURN ON THE OTHER HAND PROTECTS

THE PUBLIC FROM THE PERSONS CONCERNED PERMANANTLY AND IS

THEREFORE ACCEPTABLE IN SPITE OF THE FACT THAT IT TOO TO SOME

EXTENT ERODES THE CREDIBILITY OF THE SANCTION OF IMPRISONMENT.

5. REVERTING

TOP SECRET

TOP SECRET

-2-

5. REVERTING TO PEKING TELNO. 30, THERE ARE A NUMBER OF POINTS IN THE
FIRST TWO PARAGRAPHS I WOULD WISH TO HAVE AN OPPORTUNITY

TO HAVE OF CHALLENGING IF THE ARGUMENTS THEREIN ARE THOUGHT

FORCE, NOTABLY THE CONTINUED ASSUMPTION, WHICH I HOLD 10 BE

IN ANY UNWARRANTED THAT THE ASKING PRICE IS THE ONLY PRICE.

CASE THE EXTRACT QUOTED FROM PARA 6 OF MY TELNO 27 MUST BE

RELATED TO THE LAST TWO SENTENCES OF PARA 5 THIS EXCHANGE

RELATED TO THE POSSIBILITY OF A RELEASE FOR GREY DURING

THE COURSE OF RELEASING NEWSWORKERS IN BATCHES AND MERELY

RE-ITERATES THE ASKING PRICE.

6.

HOWEVER, SINCE CHARGE D' AFFAIRES AGREES THAT SOMETHING

304

ON THE LINES PROPOSED MIGHT BE TRIED I WILL CONFINE MY COMMENTS

TO HIS PARA 3:-

(A) SPEED IS OBVIOUSLY DESIRABLE BUT THE EARLY RELEASE OF

GREY IS NOT THE ONLY CONSIDERATION SEMI COLON

(B) IT IS IMPORTANT FOR THE FUTURE THAT I BE PROVIDED WITH

SOME DEFENSIELE JUSTIFICATION FOR USING THE PREROGATIVE

AND THIS CAN BEST BE DONE BY OBTAINING FROM THE PRISONERS

BEFORE THEIR RELEASE A REQUEST C IN WRITING IF POSSIBLE)

TO BE ALLOWED TO RETURN TO CHINA AND AN UNDERTAKING THAT

IF ESCORTED TO THE BORDER THEY WILL CROSS WILLINGLY.

(C) 1 WOULD GREATLY PREFER TO START BY SUGGESTING THAT THEY SHOULD

RETURN TO CHINA FOR GOOD, BUT I WOULD RELUCTANTLY ACCEPT THAT WE

MIGHT HAVE TO CONCEDE PERMISSION TO RETURN AFTER THE EXPIRY OF

THEIR FULL SENTENCE.

(D) IF THE OTHER CONDITIONS ARE ACCEPTABLE I SHOULD NOT OBJECT, TO

RELEASING AS MANY OF THE ELEVEN AS INDICATED WILLINGNESS TO GO, BUT

I SEE NO ADVANTAGE IN STARTING WITH THAT OFFER.

TOP SECRET

/(E) I AGREE

L

+

TOP SECRET

HONG KONG TELEGRAM NO. 44 TO FOREIGN AND COMMONWEALTH OFFICE

-3-

(E) 1 AGREE THAT WE WOULD NOT REPRESENT THE RELEASES AS DEPORT-

ATION, BUT IT MIGHT BE DIFFICULT TO CONTROL THE PRESS.

FCO PLEASE PASS IMMEDIATE TO PEKING.

4

SIR D. TRENCH

FILES

FAR EASTERN DEPT. HONG KONG DEPT. P.U.S.D.

PRIVATE SECRETARY P.S./LORD SHLPHERD SIA GALOMÄRTHY

SORSTÜN

XXXXX

/ REPEATED AS REQUESTED/

AETATICE COPIES SENT

TOP SECRET

L

1

:

+

+

127

No. 4) Sent to cleared with Frodest.

Copy of this tel (cory No Miss OL-PLE (PUSD)

Cypher/Cat A

TOP

SECRET

COPY NO..

(Mr. C. Wilson) 24/1/69. Tur cur

INMEDIATE PEKING TO FOREIGN AND COMMONWEALTH OFFICE

Telno 30 14 January, 1969

TOP SECRET

(Amended fo)

La Permal 33)

سنا

Врас

Addressed to FCO telno 30 of 14 January Repeated for information to:
Hong Kong.

(a)

Hong Kong telno 27.

(b)

4

(295)

RECEIVED IN ARCHIVES No.31

1'5 JAN 1969

FEC139/1

The following points emerge clearly from this report:

The Chinese want to get the Grey question 'settled, though naturally on
terms acceptable to then,

+

-

Their price is clear the remaining News workers. The same message comes
to us via public official channels

P1ing

(NON4 of 28 December), via shen pting (your telne 16); féc14/1

Faji

and via special channel, In fact we now have it absolutely clearly in
question and answer form, see paragraph 6 of telegram under referénce:
"Was Peking 148

saying they wanted release of all News workers before they would release
Grey. Contact confirmed that". There can now be no doubt that if we paid
this price we would get Grey.

Chinese hove

As thing with see it

(c) The Chinese have been puzzled and annoyed by our

changing line. In September we approached them and intimated that
earlier release of a prisoner was possible. When they came back with
counter proposal of release of News workers in early November we changed
our line, said we could not consider early release and at about same
time turned on publicity. Each side has mystified the other.

2. The question now is whether Chinese, while insisting on release of 11
News workmen, might settle for release to China

The and whether it would be in our interest to try this. objections are:

(a) It is a second best. We are shying away from paying

full price which we know would be effective in the case of Grey and for
which there are good arguments on general grounds. Attempts to whittle
down Chinese teras have hitherto not been successful.

(b) Experience on permanent release to China is very

discouraging (the attempt with film stars in March 1968; Lo Kuei-Po's
rejection of idea in April 1968),

(c) It could mean further devious and protracted negotiation

by a channel which over the last 6 months, has wasted precious time and
produced much mystification,

TOP SECRET

13. Nevertheless

+

.

1

1

3.

TOP

SECRET

-2-

Nevertheless since the Chinese seem to want a response and contact
reacted well to Cater's proposal it may be just worth trying subject to
strict conditions,

(4)

The need for speed, both on humanitarian grounds and in order to clear
away this major obstacle to better relations as soon as possible. We
cannot afford to waste another few months,

(b) We must be ready to release News workmen in Hong Kong (on
understanding that they seek early repatriation). (c) We must allow them
to return to Hong Kong on expiry

of sentence. This has now been suggested to Chinese by Cater. Anything
less was rejected by Lo Kuei-po in April 1968 (Peking telno 302). It
should not present difficulties to Hong Kong since even if we sat tight
the prisoners would be free in Colony on expiry of sentence.

(a)

(e)

We must be prepared to release all 11. Having gone on public record the
Chinese will not accept less. Surrender in batches may however be
possible.

We should be ready to give an assurance that we shall not represent the
releases as deportation.

4. At what stage we conceded points (b) - (e) above would be for
tactical decision; but they seem essential elements in package.

5. Finally while we do not want another all-out publicity campaign or
demands in British Press, it would be useful if during discussions the
Chinese were reminded of continuing effect of Grey's detention on world
opinion by further articles in foreign (repeat foreign) Press along
lines of recent articles

in Ceylon.

FCO pass Immediate Hong Kong.

Mr. Cradock

[Repeated as requested]

FILES

Far Eastern Dept

Hong Kong Dept

P.U.S.D.

Private Secretary

P.S. to Lord Shepherd

Sir A. Galsworthy

Kr. Moreton

bbbbb

TOP SECRET

+

ADVANCE COPIES SENT

I

+

тор сору

CYPHER/CAT A

COPY NO..2.

TOP SECRET

Mp4 1711

28

PRIORITY HONG KONG TO FOREIGN AND COMMONWEALTH OFFICE

10 JANUARY 1969

TELNO 28

TOP SECRET

ADDRESSED FCO AS MYTEL NO. 28 OF LOTI JANUARY

RFI

RECEIVED IN ARCHIVES 16.31

Not wet

Read

AND SINGAPORE.

MY TELEGRAM NO. 27 PARA I (c)

GREY.

10 JAN 1969

FEC134/1.

I FIND THESE EXCHANGES STILL CONSISTENT WITH THE VIEW THAT

PEKING ARE ONLY WILLING TO RELEASE GREY WHEN IT SUITS THEIR

OVERALL POLICY (ADDING ONLY THAT IT IS PERHAPS DEGINNING TO

LOOK RATHER HORE AS THOUGH IT WOULD`SUIT THEIR POLICY TO 00

SO SOUND, BUT THAT THEY ARE ENDEVOURING TO EXTRACT A GOOD

PRICE FIAST IF THEY CANM THEY SEEM TO BE GETTING RATHER

MORE SPECIFIC IN THEIR SUGGESTIONS WHILE STILL NOT COMMITTING

THEKSELVES FIRMLY, ON BALANCE, HOWEVER, IT NOW LOOKS AS IF

THEY PROBABLY WOULD RELEASE GREY IF THE 11 QUOTE NEWSWORKERS

UNQUOTE WERE RELEASED, AND THAT THEY WOULD BE GLAD OF THE

BARGAIN, BUT THIS DOES NOT HEAN THAT GREY WOULD ONLY BE RELEASED

Puhy ON THESE TERMS. THEY MAY WELL BE READY TO ACCEPT LESS

I AM STILL STRONGLY OPPOSED TO THE PREXATURE RELEASE OF THE

QUOTE NEZZWORKERS UNQUOTE HERE IN HONG KONG,

2. AS I SAID IN MY TELEGRAM NO. 1909 OF 26TH DECEMDEN, 1967,

IN GENERAL THE MORS COMMUNISTS WE CAN GET OUT OF THE COLONY

THE SCTTER, ALTHOUM ONCE WE AGREE TO UNIT THE DENTENCES

OF ANY CONVICTED PRISONERS WE UNDOUBTELY COML ENTO SLINGAY

ROUND, THE SUCCESS OF THE CHANGE SOLD OF COURSE D. PENJ

HAINLY ON THE GOOD FAITH OF THE MIRESE GOVERNTIENT, MOVES,

S LIKE THE IDEA O" ALLOJING ALION; ON LÄPIAY OF PUUTISICE

>IDE? IT 2014 KERSTLED THAT THEY AGD Q 2: GOOD,

OP SECRET

/3. OUR

+

TOP SECRET

2

3. OUR EFFORTS TO GET RID OF THE TWO FILM STARS (MY TELEGIAN

NO. 338 OF 16TH MARCH) PROVIDE A DISCOURAGING PRECEDENT BUT

IT MAY BE THAT THE CHINESE GOVERNMENT HAVE COME TO THE POINT.

VIERE THEY MIGHT RECONSIDER THE POSSIBILITY OF RELEASING TO CHINA.

4. ALTHOUHI THERE ARE OBVIOUS DANGERS IN ANY FORM OF NEGOTIATION,

I WOULD FOR HUMANITARIAN REASONS NOT BE TOO AVERSE TO ALLOWING

AN INDICATION TO BE GIVEN THAT WE NIGHT CONSIDER RELEASING A SMALL

NUMBER OF NEWSWORKERS PROVIDED THEY COULD BE INDUCED BY THE CHINESE

TO REQUEST REPATRIATION, WHICH WOULD PROVIDE A BASIS OF SORTS FOR

USING THE PREROGATIVE, AND LEAVE THE COLONY PERMANENTLY AND WILLINGLY

RELEASE TO CHINA VOULD BE IN LINE WITH THE STATEMENT READ OUT TO

VICE-HINISTER LO BY HOPSON ON 13TH APRIL CYOUR TELEGRAM 356 TO

PEKING OF 11TH APRIL), DUT I SEE NO REASON ON OUR FIRST APPROACH TO

MAKE ANY HORE SPECIFIC OFFERS THAN THEY ARE MAKING. I DO NOT MUCH

LIKE THE SUGGESTION THAT WE MUST MAKE PROPOSALS SEMICOLON BUT IN

CATER'S VIEW THIS NEANS MAKING PROPOSALS TO CONTACT WHO WOULD

PASS THEM ON TO PEKING AS HIS OWN IDEAS, IN THE KNOWLEDGE THAT WE

WOULD BE LIKELY TO CONCUR IF THEY FOUND FAVOUR IN PEKING,

1 5. WOULD YOU WISH CATER TO GIVE AN INDICATION ALONG. THESE LINES ?

IF THERE WAS A FAVOURABLE REACTION, WE WOULD THEN WORK OUT & MORE

SPECIFIC PROPOSAL FOR TRANSMISSION THROUGH CONTACT, WHICH COULD

MEET ANY REASONABLE ADDITIONAL POINTS THEY NADE EXCEPT THAT I

WOULD NOT BE PREPARED TO COMPROMISE ON THE PRINCIPLE OF REPATRIATION

BEING REQUESTED AND A WILLING DEPARTURE,

6. EVEN IF THIS GETS NOWHERE, IT WOULD MEET CONTACT'S POINT ABOUT

THE IMPORTANCE OF SOME COUNTER PROPOSAL COMING FROM US AND WOULD

HELP TO TEST THE EXTENT OF THEIR DESIRE TO CET RID OF GREY,

FCO PLEASE PASS PRIORITY TO PEKING.

SIR D. TRENCH

FILES

P.E.D.

F.S. TO LORD SHEPHERD

SIR A. GALSWORTHY

[REPEATED AS REQUESTED]

MR. MORETON

H.K. DEPT.

P.U.S.D.

PRIVATE SECRETARY

TOP SECRET

Pry

(45)

+

CYPHER/CAT A

PRIORITY HONG KONG

TELEGRAM NUMBER 27

ТОР

SECRET

Entity

TOP COPY

TO FOREIGN AND COMMONWEALTH OFFIC

TOP SECRET

13 JANUARY 196RECEIVED IN

B04

ARCHIVES No.31

17 JAN 1969

ры

17/1

Fecisel

ADDRESSED F.0.0. TELNO 27 OF 10TH JANUARY RFI PEKING AND

POLAD SINGAPORE.

MY TELEGRAM 2258:GREY.

CATER HAD FOUR MORE MEETINGS WITH CONTACT ON 20 DECEMRER AND

ON 2, 4 AND 7 JANUARY, THE MEETING ON 20 DECEMBER COVERED

MINOR LOCAL MATTERS ONLY.

2. AT THE MEETING ON 2 JANUARY CONTACT SAID THAT JUST BEFORE

CHRISTMAS LI CHO CHIH HAD ASKED HIM WHETHER THERE WAS ANY

REACTION FROM THE HONG KONG GOVERNMENT TO THE PROPOSED SWOP

FOR GREY. CONTACT HAD TOLD HIM THERE WAS NONE. LI HAD THEN

GONE TO CHINA, CONTACT TOLD CATER THAT ON 1 JANUARY LI HAD

COMMUNICATED WITH HIM FROM CANTON AND EVIDENTLY ON PEKING'S

BEPALF HAD ONCE AGAIN ASKED WHETHER THERE WAS ANY REACTION TO

THE CHINESE PROPOSAL FOR THE RELEASE OF GREY AND IF NOT,

WHITHER CONTACT COULD SUGGEST ANYTHING TO PEKING IN ORDER

TO OVERCOME THE PROBLEM OF GREY AND THE IMPRISONED NEWSWORKERS,

CONTACT SAID TO CATER THAT WE SHOULD NOT DELAY OUR REPLY,

THAT PEKING HAD BROUGHT THEIR PRICE FOR GREY INTO THE OPEN AND

WOULD EXPECT SOME REACTION,

3.

CATOR REPLIED THAT WE WERE RATHER BEWILDERED ABOUT THE GREY

SITUATION. THERE HAD BEEN VARIOUS STATEMENTS BY THE CHINESE

ТОР

SECRET

/THROUGH

E

TOP

SECRET

2

THROUGH VARIOUS DIFFERENT CHANNELS.

IN ADDITION, PEKING HAD

SHIFTED ITS CROUND CORSIDERABLY SINCE GREY WAS FIRST DETAINED. CATER
ALSO ARGUED THAT DURING THE LAST YEAR WE HAD DONE A GREAT

DEAL TO DI-ESCALATE BUT THERE HAD BEEN HARDLY ANY RESPONSE

FROM PEKING.

CONTACT WAS VERY UPSET AND COUNTERATTACKED BY

ALLEGING THAT IT HAD TAKEN US A LONG TIME IN FEPRUARY AND MARCH TO.
AGREE TO ESTABLISH THE PRESENT CHANNEL AND AGAIN TO RESPOND

TO THE SUGGESTIONS MADE THROUGH HIM IN NOVEMBER OVER THE EXCHANGE OF
GREY FOR THE NEWSWORKERS. CONTACT SAID THAT EARLIER IN OCTOBER

HE HAD GOOD REASON TO THINK THAT GREY'S RELEASE WAS IMMINENT BUT IT HAD
BEEN UPSET BY THE PRESS CONFERENCE GIVEN HERE BY CRADOCK, BY THE MEETING
OF CRADOCK, MUPRAY AND POLITICAL ADVISER AND BY THE DISCUSSIONS HERE
WITH NONA WHICH HAD BEEN MIS- REPORTED TO PÊKING. CATER REFUTED THE
CHARGES ABOUT DELAY. HE ADDED THAT SO FAR AS EXCHANGING GREY FOR THE
NEWSWORKERS WAS CONCERNED, HE, CATER, HAD REPEATEDLY POINTED OUT THE
SERIOUS DIFFICULTIES IT PRESENTED FOR US. CATER SUGGESTED THAT IF PEKING
REALLY WANTED TO IMPROVE RELATIONS THEY SHOULD RELEASE GREY AND

CONTACT WE WOULD RESPOND WITH FURTHER MEASURES OF DE-ESCALATION. DID NOT
THINK MUCH OF THAT IDEA AND WANTED TO KNOW PRECISELY

WHAT WE HAD IN MIND.

4.

AT THE MEETING ON 4 JANUARY CATER, WHO HAD DISCUSSED THE MATTER WITH ME,
REPEATED HIS ARGUMENTS WITH ADDITIONAL MATERIAL ON THE PEKING
GOVERNMENT'S STATEMENTS OF JULY 1967 ABOUT GREY

AND ON OUR MEASURES OF DE-ESCALATION, ESPECIALLY OVER THE RELEASE OF
DETAINEES, THE GRANTING OF PERMISSION TO REOPEN THE CHUNG WAH SCHOOL
UNDER ANOTHER NAME AND OUR RESTRAINT IN TOLERATING LIBELLOUS AND
SEDITIOUS STATEMENTS IN THE COMMUNIST PRESS. WE HAD IN FACT DE-ESCALATED
TO A CONSIDERABLE EXTENT IN VIEW OF PEKING'S ATTITUDES AS REPORTED TO US
BY HIM,

то TOP

SECRET.

/CONTACT

TOP

SECRET

HONG KONG TELEGRAM NO. 27 TO FCO

3

CONTACT APPEARED TO TAKE THESE POINTS AND CONSIDER THEM USEFUL

MATERIAL FOR HIM TO USE. CATER ALSO SUGGESTED THAT THE CHINESE

GOVERNMENT SHOULD DO SOMETHING ABOUT OTHER BRITONS WRONGLY

AINED IN CHINA AS WELL AS ABOUT GREY. HE TOLD CONTACT

THAT IT WAS ''EXTREMELY DIFFICULT, VIRTUALLY IMPOSSIBLE''

TO RELEASE THE NEWSWORKERS IN HONG KONG IN EXCHANGE FOR GREY.

THE RECENT STATEMENTS MADE BY THE COMMUNISTS HAD MADE IT EVEN

KORE DIFFICULT. CONTACT TOOK CAREFUL NOTE OF THIS LANGUAGE.

5. AT THE MEETING ON 7 JANUARY CONTACT SAID THAT HE HAD A.

VERY LONG DISCUSSION ON 6 JANUARY WITH LI CHO-SHIH. CONTACT

SAID THAT LI HAD BEEN TO PEKING. CONTACT WAS SURE THAT LI HAD

RECEIVED INSTRUCTIONS AND COMMENTS WITH THE APPROVAL OF CHOU

EN LAI.' LI HAD TOLD CONTACT THAT THE PEKING GOVERNKENT WAS NOW

RECALLING SOME OF THE LEADING COMMUNISTS. IN HONG KONG WHO HAD ORGAN-

THE TROUBLES IN 1967. LI HAD TOLD CONTACT THAT PEKING, AND

IN PARTICULAR CHOU EN LAI, WERE VERY EMBARRASSED OVER GREY AND

ANXIOUS TO SEE THE MATTER SETTLED. CONTACT CLAIMED THAT HE HAD

THEN SPOKEN TO LI ALONG THE LINES OF CATER'S REMARKS IN PARA A

ABOVE. LI SAID THAT PEKING WERE WELL AWARE OF THE DIFFICULTIES

WHICH FACED US IN RELEASING THE NEWSWORKERS BUT THAT WAS

ENTIRELY A PROBLEH FOR THE HONG KONG GOVERNMENT AND NOT SOME-

THING THAT PEKING COULD DO ANYTHING ABOUT. LI ALLEGEDLY ASKED

THAT A MESSAGE BE PASSED TO CATER TO THE EFFECT THAT PEKING HAD NO

INTENTION OF MAKING PROPAGANDA OUT OF THIS ISSUE. IF THE

NEWSWORKERS WERE RELEASED THERE WOULD FE NO QUESTION OF CROWING

OVER A VICTORY OBTAINED AT OUR EXPENSE. IT WAS SIMPLY A QUESTION

OF THE HONG KONG GOVERNMENT FINDING A WAY ROUND THE PROBLEM,

PERHAPS BY RELEASING A FEW NEWSWORKERS AT A TIME ON SOME PRETEXT

OR OTHER. WHEN THAT HAD BEEN DONE PEKING WOULD RELEASE GREY.

TOP SECRET

/6. CATER

TOP, SECRET

6. CATER THEN ASKED CONTACT WHAT PRECISELY WAS BEING SUGGESTED.

WAS PEKING SAYING THAT THEY WANTED THE RELEASE OF ALL 11

NEWSWORKERS BEFORE THEY WOULD RELEASE GREY?

GOVERNMENT

CONTACT CONFIRMED THAT.

FEIGNING SOME ANGER, CATER THEN SAID HE FOUND THIS AN INCREDIBLE
PROPOSAL. IN SPITE OF THE SUBSTANTIAL LEGAL PROBLEMS WHICH HAD

SEEN FULLY EXPLAINED, PEKING WAS STILL DEMANDING THE SAME

PRICE. CONTACT CLAIMED THAT HE HAD POINTED THAT OUT TO LI

WHO HAD REPLIED THAT THE CHINESE HAD JUST AS MUCH DIFFICULTY

IN RELEASING GREY. LI ALLEGEDLY SAID THAT THE PEKING

HAD THOUGHT OF CHARGING AND SENTENCING GREY BUT CHOU EN LAI

PERSONALLY HAD INTERVENED ON THE GROUNDS THAT TO DO SO WOULD

MAKE MATTERS WORSE SINCE IT WOULD BE IMPOSSIBLE TO RELEASE

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