TNAG-1877-FCO40-2668-Student-demonstrations-and-internal-political-situation-in-C-1989 — Page 14

CONFIDENTIAL

important for us to maintain a channel of communications through Sir Alan Donald. however need to keep the situation under

We shall

review.

If violence escalates to an unacceptable level, it may well be appropriate to recall the Ambassador. Such a decision would best be coordinated with partners in the Twelve and other close allies including the Americans;

b) Breaking Diplomatic Relations

President Bush said there were

Americans to break diplomatic relations.

no plans for the

This is

reasons as at

a viable option for the same Anot

a) above.

c) Breaking Off Commercial Relations

to cut off

We could however

President Bush said he did not want

all commercial ties with China: "I don't want to

hurt the Chinese people“. I believe that we

should take the same position. take the measured step of withholding ATP support for projects under the Soft Loan Agreement, and believe this would be appropriate in respect of future projects (though not those already agreed). I believe it would be wrong to draw attention to this option in the Secretary of State's statement itself but the supplementaries

will include language to the effect that we shall be reviewing as a matter of urgency the question

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CONFIDENTIAL