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meet their share of the costs. The Council have found the money for the expanded programme by deferring the proposed strengthening of activities in Japan, Scandinavia, Australia, Canada and in certain information services.
5. Ferhaps due to the absence of Chinese Ministers on visits abroad, the change in the Minister of Education and the greatly increased responsibilities of that Ministry, it has been difficult to extract a firm commitment from the Chinese on finance. After various exchanges, we sent FCC telegram No 84 of 25 January, urging our Embassy in Feking to press for firm replies. We have now received the Chinese response (Peking telegrams nos 204 and 206 of 14 February) indicating that the Chinese are unable to meet the administrative costs of managing the programme in the United Kingdom, including placing of students here and the recruitment of British teachers to work in China; and the costs of the English Language Teaching Institute, their earlier assurances to Mrs Williams notwithstanding.
6. We have always recognised that although we should aim to preserve the principle that the Chinese should pay the full going rate for the services they need, if it should become clear that the sums involved were greater than the Chinese can afford, we should be prepared to consider the matter again in the light of the available facts political, commercial and educational.
7.
8.
The possibilities are:
(a)
We accept the position and allow the Chinese to take the consequences of their inability to pay the full
market rates.
(b) We provide a subsidy for the programme.
We too would lose substantially if we followed course (a). Although it is the Chinese, not we, who have resiled from assurances given earlier, we have given commitments to help them to modernise, and an expanded educational and cultural programme is a part of the many-stranded relationship we seek with the Chinese. Our political
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