CO537-3705 — Page 92

However, we presume that these two matters

must now be considered in the light of the

implications of H.M.G.'s foreign policy as

announced last week, and that in as much as

the action proposed might weaken the position

of the present Chinese Government internally,

this constitutes an additional argument for

adopting the courses you propose.

In the circumstances, we are prepared

to agree to your views on all three points,

subject to anything further which the Gov-

ernor of Hong Kong may have to say. I

enclose a draft of a telegram which we propose

to send to Sir Alexander Grantham. Would you

very kindly let me know whether the Foreign

Office agree with it?

(87)

Obviously the most important thing is

to achieve a settlement of the vexed question

of the Chinese claim to jurisdiction within

the "Walled City of Kowloon", which will stop

the Chinese from using this as a pretext to

provoke further incidents in the future. On

this you will see from Hong Kong telegram

No.115 that the Governor is still opposed to

the suggestion made by the Chinese Government

both in Nanking and here (note enclosed with

Foreign Office compliments slip F.1320/154/10

of the 27th January) that the area should be

turned into a public garden containing the

Office of Commissioner for Foreifn Affairs.

The Governor says that any such solution

would be interpreted locally as an admission.

that the Hong Kong Government was in the wrong,

and would be regarded as a face-saving gesture

by us, and I think we must accept the Governor's

(84)

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