CONFIDENTIAL,
ONE
2
4.
(b) By refusing to settle we also card away the best chance of helping British Bank community in Shanghai who are ve exposed and under considerable and increasing strain. Bank of China visas were issued as part of a general setant there is no doubt that chances of Self and others to obta visas would be greatly improved.
(c) Our withholding of NCNA entry visas (which is nub of this question) is not only fatal to the chance of our staff and the Shanghai community; it does not help Grey.
As a means of achieving our objects in Grey's case denial of NCNA entry visas is ineffective and merely an irritant. As was again demonstrated on 2 March Grey's chances depend on prisoners in Hong Kong and any progress we may now be making is because of our recent offer on prison visits, Withholding NCNA entry visas has not helped. We have done this since last summer without effect. Our special attempt on 7 February to make progress via this channel got us nowhere. Indeed continuing denials of these visas, by preventing restoration of normal diplomatic conditions, which would assist Grey and other British subjects, has if anything done him harm.
(d) As I have observed before, the Chinese can sit this out for much longer than we can afford to do. The position of their staff in London probably causes them little concern and while they would no doubt like to normalize their move ment in and out of London, they are probably in no great hurry to do so. Our case is different. It is now over 6 months since our position here was frozen. While morale in most cases surviving well nervous tension is beginning to affect some and if we do not take [? grp.critted] soon to settle this problem they will all, as I have already explained, feel badly let down. The strain and personal problems increase with time. It might be arguable that we ought to sacrifice chances of an early return to normal movement for our staff (and also Shanghai community) if by so doing we were giving decisive help to Grey. But to reject the chance of a good settlement when such rejection gives no real help to Grey would be indefensible.
(e) We have tried to whittle down the Chinese promesals and we have tried to bring Grey into the deal. As predicted, it has not worked. The result has been 4 weeks stalemate and promise of more. We must now accept that Grey and visa questions are distinct. We can and must push shead with both simultaneously, but we must use different methods. Grey is linked with Hong Kong prisoners,
Our case depends on reciprocal freedom for Chinese officials in London. The more we entangle the two the greater the danger of bringing Hong Kong into all issues and make progress in any sector depend on concessions in Hong Kong.
In your telegram No.133 you referred to public opinion as principal reason for withholding NCNA entry visas. I hope I may therefore make following comments on this aspect:-
CONFIDENTIAL
(a) If public opinion
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