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orderly transfer of the male staff.
The President has caused action to be taken with the Chinese but we do not yet know the result.
4. Lest our people in China be held as hostages, action has been taken to ensure that no citizen of the People's Republic of China, whether diplomatic or other, leaves the United Kingdom without permission.
5. Businessmen and shipping interests have been warned of the danger to their personnel and ships visiting China, but such visits have not been prohibited. The latest reports from shipping interests indicate that, even in the last week, British ships visiting Chinese ports have not been subjected to the harassment with which they were met a month ago.
6. The Hong Kong authorities have been instructed that, though they must continue to take whatever steps are necessary to maintain law and order, any further measures they may contemplate which could lead to reprisals against British subjects in China must be referred to London before being put into effect.
Arguments on Recommendations
7.
(a) That we do not take the initiative to break
(i)
relations
Trade
For the first half of 1967 our exports to the Chinese People's Republic amounted to £21 million and our imports from China to £16 million. How these figures fluctuate will depend not so much on anti-British feeling in China, which seems hardly to have affected trade at all, but rather on the internal political state of China. If the present chaos and anarchy continue trade is likely to drop. Nevertheless the trend over the last year has been for it to increase and for the balance to increase to our advantage. It is true that countries without diplomatic representation in Peking (e.g. Japan and the Federal German Republic) manage to trade successfully with China, but we believe that if we, who do have diplomatic relations, were to break them off our trade might well be adversely affected. In view, however, of the unsettled conditions in China we cannot say with assurance that the maintenance of our very tenuous diplomatic relations is at present a major factor in any assessment of our future trade prospects.
(ii)
British subjects still in China
If we broke off relations completely we would be publicly admitting our inability to do anything for the British subjects still resident in China. At least one of these, Mr. Grey, the Reuter representative, is held there under duress and difficulties have also been put in the way of the departure of others. The total number of British subjects in China is small, and some, who sympathise with Mao's policies, would not wish for our protection or assis- tance in any case; nevertheless H.M.G. might meet with adverse criticism if they appeared to be more concerned with
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