CAB129-45 — Page 441

Page 441 basis of such information as they have at present, are by no means con-

vinced that it is in the power of the Chinese to launch heavy and repeated

air attacks.

I understand that at the "briefing meetings" in the State Depart-

ment your views on the necessity for retaliatory air action have been

made known to certain Governments. If you would be so good as to

let us know with which Governments this question has been discussed, I

shall consider what we should do. I have in mind particularly the

Governments of France, Canada, Australia, New Zealand and South

Africa. I consider that His Majesty's Government should inform at least

these Governments of the decision taken by us. In order that we may do

so it would be desirable that they should first be informed of your views.

I would therefore hope that you would feel able to consult them now as

fully as you have consulted us.

Air attacks from bases in Soviet territory would raise separate

and even graver problems, and our present decision does not cover this

We should therefore wish to be consulted fully before we

contingency.

could agree to retaliatory action against these bases also.

It would be helpful to us to have your assessment of the military

and political consequences which you consider might follow any attack on

Chinese bases, and in particular, your estimate of the Soviet attitude to

such an attack.

You refer to sanctions against China. As you know, we are

opposed to political sanctions.

They would not influence the course of

the campaign in Korea and indeed would have little effect on China except

to strengthen the hands of the Chinese Government against those sections

of Chinese opinion who still look to the west. These sections of opinion

are not politically important in China today, but there is nothing to gain by

alloping the Russians to point to futile political sanctions 1asffingther

evidence of the implacable hostility of the west to the new China.

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Page 449nomic sanctions I view differently. For a long time we have

kept an eye on trade with China to ensure that no goods of direct military

value reached her from British sources. The system has worked well

so far as concerns most of the goods that could directly assist the Chinese

war effort in Korea, except in the case of rubber, and there we had to take

steps last month to check the increasing exports of rubber from Malaya

and Singapore to China even though the restrictions cannot be fully effective

without the co-operation of other producers and purchasers.

There has

been so much misunderstanding of our policy in the matter of trade with

China that we have considered it necessary to make public what the policy

has been.

In this we

May I say a word about Hong Kong? It is simply not possible to

cut off Hong Kong from China without giving rise to the gravest internal

problems of unemployment, starvation and unrest in other words, with-

out creating for Communism the ideal conditions in which it can flourish.

What we have been trying to do is to ensure, with as little publicity as

possible (in order to minimise repercussions in Hong Kong) that exports

from Hong Kong do not contribute to the Chinese war effort.

have been much more successful than your or our own Press gives us

credit for. To go to the extreme limit of cutting off trade between Hong

Kong and the mainland in ordinary consumer goods and in foodstuffs would

make no difference whatsoever to the fighting in Korea, and would on the

other hand risk the loss of an important centre of free speech and western

ideas. Everyone (Chinese included) who goes to Hong Kong from China

breathes more freely and senses the contrast. Is this of no value in

the world wide war of ideas? With its fine harbour Hong Kong, in wrong

hands, would be a menace to the South China seas. I am sure you would

not wish to give it to China.