TNAG-0032-FCO40-68-Relations-with-China-1968 — Page 39

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CONFIDENTIAL

Their statements to us in March and April seem to be requests

in disguised form for some suitable response on our part.

They

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have not asked for their demands of 1967 to be fulfilled, but

for a "reply" and have indicated that they expect "concrete

actions" in Hong Kong as an earnest of our good intentions.

have also had through unofficial channels a strong hint that

the Chinese Government do not seek another Macao and realise

that that is out of the question. It is true that the Chinese

authorities have rejected our proposals of immediate release to

China, i.e. deportation, of the confrontation prisoners, and it

may be argued that this indicates that they are uninterested

in a settlement. But duportation to China (without permission

to return) of a large number of Hong Kong citizens who have

been active in their cause would almost certainly be seen by

Poking as a further and public defeat rather than the

concession they need to get themselves off the hook. We

have offered them so far nothing they will regard as meaningful.

To sum up, the evidence may not be conclusive but it points

strongly to the possibility of a settlement on tolerable terms.

On the most gloomy interpretation there is a considerable area

of uncertainty which it would seem greatly in our interests to

explore in order to determine the price of a settlement.

CONFIDENTIAL

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