TNAG-0032-FCO40-68-Relations-with-China-1968 — Page 45

CONFIDENTIAL

13. This argument has at first sight a certain force, though

I think that on examination it proves open to overriding

objections,

In the first place it assumes that any concessions

to the Chinese are likely to lead only to further demands and

that they will not stop short of a Macao situation. I think

this is a false assumption for the reasons given in paragraph 8

above and that, while communist intentions are by no means entirely

clear, the balance of evidence suggests that they would favour

a settlement on terms we might accept, or at the worst that there is sufficient uncertainty to justify exploration on cur

part. Nor has our experience over the last year been that

mecting Chinese terms has always led to now demands. So far

when we have come to an agreement with them the bargain has

usually been honoured (e.g. the visit to Groy). These arguments

also assume that the release of communist prisoners now would

gravely injure public morale in Hong Kong.

wonder if this is a reasonable assumption.

With respect, I

Surely it is just

as (rguable that public opinion is worried at the continu~tion

of confrontation end would welcome acts indicating a return

to normality? The border agreement of November 1967 involved

concessions to the communists but brought considerable benefits

and was broadly welcomed by Hong Kong opinion.

Special prison

visits in April this year were adroitly presented as a sign

of diminishing tension. The press reaction in Hong Kong from

both right and left to the recent release of four detainees has

been encouraging (quite apart from the possibility that it

CONFIDENTIAL

/produced

Page 45Page 46