CO537-3705 — Page 19

(85) (84) (86) (s)

Mr. Seel

1. A copy of the note as sent to the Chinese Ambassador is now attached (80). It has been telegraphed to Nanking, with a proposal to release the text of the Note to the press as a counterblast to the statements issued by the Central News Agency. This telegram has been repeated to Nanking. Hong Kong.

2. We also have (No.74) the Foreign Office views on the Governor's suggestions (in No.31) that the Chinese Government should be asked (a) to withdraw the "National Times" from Hong Kong, (b) to withdraw from Hong Kong the Kuomintang and the San Min Chu I Youth Corps, and (c) to regularise the position of their representative in the Colony.

3. The Foreign Office views are:

(a) that the assurances given by the Chinese

Minister for Foreign Affairs that the

National Times" had been instructed to maintain "an unprovocative attitude" should be accepted and that the paper should be judged on its future behaviour:

(b) that we should first seek to bridle the refugee personalities and organisations within the Colony and only then tackle the question of Kuomintang activities:

(c) that the title of the Chinese representative

in Hong Kong is not at present of major importance, since the Chinese Government, in concluding the recent Customs Agreement, have already acknowledged British Sovereignty over Hong Kong, and that we should accept the view of our Ambassador in Nanking that this matter should also be raised afresh at leisure and on its merits.

4.

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On (b) there seems to be a clear case for accepting the Foreign Office view, but their arguments in favour of their views on the other two points are not so convincing. However, I imagine that the implications of the foreign policy of H.M. G. as announced in the House last week make it undesirable that we should at the present moment take any action likely to embarrass the Chinese Government or weaken their position internally, and, if, as has been suggested, the present agitation has been worked up by the opponents of the present Chinese Government with that very object in view, there is clearly a strong argument, from the point of view of H.M.G.'s general foreign policy, for accepting the Foreign Office views.

5. I would accordingly recommend that we should accept the Foreign Office views on all three points, subject to anything further the Governor of Hong Kong may have to say, and also, as regards point (c), to consideration of the

suggestion