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[This telegram is of particular secrecy and should be retained by the authorised recipient and not passed on]

Cypher/OTP.

POLITICAL DISTRIBUTION.

FROM NANKING TO FOREIGN OFFICE.

Sir R. Stevenson. No.1416.

6th September, 1949.

Repeated to Hong Kong,

Singapore, Shanghai.

D. 1.34 p.m. 6th September, 1949.

R. 3.47 p.m. 6th September, 1949.

PRIORITY

SECRET.

Addressed to Foreign Office telegram No.1416

of 6th September, repeated for information to Hong Kong, Singapore and Shanghai.

Colonial Office telegram No.1114 to Hong Kong repeated to me in your telegram No.968.

My immediately following telegram contains text of the statement by Associated Press and by North China Daily News in connexion with the recent Shanghai ban on foreign news agencies.

2. Though the North China Daily News still continues publication, the Communist official advice that it could monitor and publish Reuters' despatches provided it were careful (see paragraph 1 of Shanghai telegram No.436 to me) in effect ensures that no (repeat no) foreign news in any way unpalatable to the Communists can be printed.

3. This denial of freedom of publication to foreign news agencies may be regarded as releasing us from the policy of restraint which we had agreed to exercise in Hong Kong for fear of retalitation against British interests in China. We need be no longer therefore prevented by such scruples from taking strong action (which is after all the only argument understandable to the Chinese) against the New China News Agency in Hong Kong or in any other member territory should such action seem feasible or appropriate.

4. At the same time we should avoid committing our- selves to any too precipitate action for the following considerations:

/(a) the difficulty