TNAG-0064-FCO40-100-Commonwealth-Ministers--Defence-discussions-1967 — Page 30

THE SECRET

Australian Government to do what they could to doing the

deal, since some uncertainty on this score might bring home

to the Chinese the possible economic consequences of their

actions in Hong Kong. If the deal had gone through quickly

at that juncture it might well have encouraged the Chinese

to believo that it was "business as usual", despite what

they were doing in Hong Kong.

5. Although reluctant to interfere with the purely

commercial operations of the Australian heat Board, the

Australian Govéruzent arranged postponement of the conclusion

of the deal until after disturbances had ceased in long song.

In addition, it was arranged that the delegation sould say

to the Chinese when the contracts were signed that the

Australian Government was concerned about developments in the

area and, if threats to security and stability persisted,

would wish to review their total export policies in relation to

China. In our view this action was most helpful and could have

a salutary effect. Se bad no large deals of our om at that

time through which we could have brought pressure to bear.

6. The Australians wanted to know what we ourselves were

proposing to do about our trade with China, e explained that

we had not asked them to deny wheat to Chine but only to slow

čown negotiations to help us over the insediate crisis in

Hong Song. We told them that we were studying the question

of our trade with China. Kr. Holt may enquire further about

this. He might be told that this is one of the matters being

studied by officials who are reviewing future policy on Hong

Kong and that we will keep in touch with him on this subject.

Situation in Hong Kong

7.

bat began za minor disturbances on the 6th lay, arising

out of a labour dispute, was on the 11th May taken up and

701 SECREA

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