FCO 21/831 Political relations between China and UK relating to Hong Kong

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1971

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CONFIDENTIAL

CLOSED UNTIL 2007

Registry Address

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พ

King Charles Street.

YEAR STAMP

1971

INTEDIANS

CYPHER/CAT A

COFLJEKTIAL

FOREIGN AND COMMONWEALTH OFFICE #81510Z

(FED)

YOP CC

CONFIDENTIAL.

TO IMMEDIATE HONG KONG TELNO. 24 OF 8 JANUARY INFO PRIORITY TO PEKING (PERSONAL FOR DENSON).

PERSONAL FOR GOVERNOR FROM SECRETARY OF STATE.

I HAVE BEEN GIVING THOUGHT TO OUR RELATIONS WITH CHINA AND THEIR

IMPLICATIONS FOR HONG KONG. THE CHINESE HAVE NOW MADE IT ABUNDANTLY

CLEAR THAT THEY WISH TO NORMALISE AND IMPROVE CONTACTS: BY RELEASING JOHNSTON, THEY HAVE REMOVED THE ONLY SERIOUS OBSTACLE REMAINING FROM THE STRICTLY BRITISH POINT OF VIEW.

2. THEY NOW SEE US AS HAVING A MORAL RESPONSIBILITY TO RESPOND.

THEY HAVE MADE IT CLEAR WHAT FORM THEY CONSIDER THE RESPONSE SHOULD TAKE THE RELEASE OF THE REMAINING CONFRONTATION PRISONERS, 3. 1 AND HY PREDECESSORS HAVE ALWAYS RECOGNISED THE NEED TO ENSURE THAT RELEASES DO NOT LEAD TO A REDUCTION IN CONFIDENCE IN THE FIRMRESS OF THE GOVERNMENT OF HONG KONG AND ITS ABILITY TO WITHSTAND CHINESE PRESSURE. ON THE OTHER HAND THE SITUATION IS NOW CALM, THREE YEARS HAVE PASSED AND THE COMMUNISTS IN HONG KONG ARE AT PRESENT AVOIDING CLASHES WITH YOUR GOVERNMENT. WE ARE THEREFORE AT THE MOMENT IN A POSITION OF COMPARATIVE STRENGTH, BUT IF, AFTER THE CHINESE HAVE PLAYED THEIR BEST REMAINING BARGAINING CARD IN RELEASING MR. JOHNSTON, WE MAKE NO RESPONSE, THEY MAY FEEL THE NEED TO RESORT TO MORE HOSTILE MEASURES. THEY

HAVE ALREADY HINTED TO US HERE THAT THEY INTENDED TO DEMONSTRATE THE INDIGNATION OF RELATIVES IN HONG KONG, AND I SEE THAT THIS CAMPAIGN HAS NOW STARTED. THE CHINESE HAVE LINKED THE CONTINUED

DETENTION OF CONFRONTATION PRISONERS WITH BRITISH SUBJECTS DETAINED IN CHINA, AND MIGHT CONCEIVABLY BE EVENTUALLY TEMPTED TO TAKE FURTHER HOSTAGES, THEY HAVE RECENTLY ALSO LINKED THEM WITH

THE FUTURE OF BRANCHES OF BRITISH BANKS IN SHANGHAI. THERE ARE UNFORTUNATELY MANY WAYS IN WHICH THEY COULD EXTEND THEIR PRESSURES AND THEIR OBVIOUS TARGET FOR PRESSURE IS HONG KONG WHICH IS

MUCH MORE VULNERABLE.THAN THE U.K. INDEED IT IS ONLY BY

MAINTAINING FRIENDLY AND PRACTICAL CONTACTS WITH THE CHINESE THAT

THE COLONY CAN MAINTAIN ITS PROSPERITY.

CAST

CONFIDENTX.J.

CONFIDENTIAL

4. I SHOULD THEREFORE BE GRATEFUL IF YOU COULD TAKE THESE

CONSIDERATIONS INTO ACCOUNT IN YOUR REVIEW OF THE POSITION (YOUR TELNO, 883). I SEE FROM YOUR TELEGRAM NO. 183 OF 21 MARCH THAT AT THAT TIME 5 WERE CONVICTED OF CRIMES OF VIOLENCE, 87 OF POSSESSION OF OFFENSIVE WEAPONS (EITHER PERSONAL POSSESSION OR BEING ON PREMISES WHERE SUCH WEAPONS WERE FOUND), AND 23 OF POSSESSION OR USE OF EXPLOSIVES. I IMAGINE THE PROPORTION REMAINS MUCH THE SAME. IT WOULD CLEARLY BE PREFERABLE FROM THE POINT

OF FUTURE SINO-BRITISH RELATIONS IF WE COULD REMOVE THIS OBSTACLE COMPLETELY. I FULLY UNDERSTAND THE DIFFICULTIES IN ANY REMISSION

TO THE 5 ACTUALLY COMMITTED FOR VIOLENCE AND THERE MAY WELL BE OTHERS THAT WOULD PRESENT DIFFICULTIES TO YOU. I WOULD HOPE NEVERTHELESS THAT YOU WOULD BE ABLE TO RELEASE UNDER YOUR LETTERS PATENT WILL OVER HALF OF THOSE STILL DETAINED. THEREAFTER AND IN THE I IGHT OF THE REACTIONS WE COULD CONSIDER A TIME-TABLE FOR THE RELEASE OF THE REST. IF IT WOULD HELP PUBLIC PRESENTATION IN THE COLONY, YOU MAY LIKE TO CONSIDER PARALLEL REMISSIONS IN RESPECT OF PERSONS SERVING SENTENCES FOR OTHER CRIMES NOT CONNECTED WITH THE DISTURBANCES, ALTHOUGH THIS WOULD MAKE IT DIFFICULT TO EXPLAIN THE REMISSIONS IN THE CASE OF THE CONFRONTATION SENTENCES BY

REFERENCE TO THEIR ORIGINAL EXEMPLARY CHARACTER.

5. I AM VERY MUCH AWARE OF THE DIFFICULTIES OF CONSCIENCE INVOLVED IN THIS MATTER FOR YOU AND THOSE WHO SERVE ON YOUR BOARD OF REVIEW. NEVERTHELESS WE HERE AND IN HONG KONG HAVE REACHED A MOST IMPORTANT STAGE IN OUR RELATIONS WITH CHINA AND IN THESE CIRCUMSTANCES I AM ASKING YOU TO CONSIDER WHETHER THE INTERESTS OF THE LONG-TERM FUTURE OF THE COLONY WOULD NOT BEST BE SERVED BY MAKING THE MOST OF THIS OPPORTUNITY TO ESTABLISH MORE CORDIAL AND WORKMANLIKE CONTACTS. THE CHINESE TIMED JOHNSTON'S RELEASE FOR CHRISTMAS - IT WOULD BE PARTICULARLY PELICITOUS IF YOU WERE ABLE TO TIME RELEASES FOR THE SPRING FESTIVAL.

DOUGLAS-HOME

FILAS

RED

SING HONG D

SIR S TA LIKSON

GIAL KUNSCH

I HALFORD

TEMI ROYLE

-2-

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Draft Telegram to:-

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And to:-

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* Date and time (G.M.T.) telegram should

reach addressco(t)...

Despatched

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CONFIDENTIAL OPCZO z

IL.

.---..-~~-‒‒‒‒‒‒‒‒‒ -------

(Personal-for Governor from

Secretary of Stater

HONG KONG

Addressed to

telegram No...

..(date)

And to

தி

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----

·PRIORITY···

repeated for information to PEKING (Personal for Denson)

-IL.

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... ‒‒

NOTHING TO BE WRITTEN IN THIS MARGIN

Repeat to:

Peking

Saving to:-

Distribution:-

Files

FED

Saving to

PERSONAL for GOVERNOR fun brevetary of

I have been giving thought to our relations with

China and their implications for Hong Kong. The

Chinese have now made it abundantly clear that they

wish to normalise and improve contacts; by

releasing Johnston, they have removed the only serious

obstacle remaining from the strictly British point of

view.

They now see us as having a moral responsibility

to respond. They have made it clear what form they

consider the response should take the release of

the remaining confrontation prisoners.

Hong Kong Dept. 3. I and my predecessors have always recognised the Sir S. Tomlinson

Sir L. Monson

Mr. Wilford

Miss Deas

Private Office

need to ensure that releases do not lead to a

reduction in confidence in the firmness of the

Government of Hong Kong and its ability to withstand

Chinese pressure.

On the other hand the situation

is now calm, three years have passed and the

/Communista

CONFIDENTIAL

Communists in Hong Kong are at present avoiding

clashes with your Government.

We are therefore at

the moment in a position of comparative strength.

But if, after the Chinese have played their best

remaining bargaining card in releasing Fr. Johnston,

we make no response, they may feel the need to r esort

to more hostile measures. They have already hinted

to us here that they intended to demonstrate the

indignation of relatives in Hong Kong, and I see that

this campaign has now started. The Chinese have

linked the continued detention of confrontation

prisoners with British subjects detained in China,

and might conceivably be eventually tempted to take

further hostages. They have recently also linked

them with the future of branches of British banks in

There are unfortunately many ways in

Shanghai.

which they could extend their pressures and their

obvious target for pressure is Hong Kong which is

much more vulnerable than the U.K. Indeed it is

only by maintaining friendly and practical contacts

with the Chinese that the Colony can maintain its

prosperity.

4. I should therefore be grateful if you could take

these considerations into account in your review of

the position (your tel. no. 8837). I see from your

telegram no. 183 of 21 March that at that time 5 were

convicted of crimes of violence, 87 of possession of

offensive weapons (either personal possession or being

on premises where such weapons were found), and 23 of

possession or use of explosives. I imagine the

/proportion

CONFIDENTIAL

#18382), DN 392005"154m (77 sorta) 1,7

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THIS MARGIN

WOOL 51-7406

CONFIDENTIAL

Theraufster and in the light of the

reactions we could commishear

a time-table for

the walked of

the rest.

proportion remains much the same, It would

clearly be preferable from the point of future

Sino-British relations if we could remove this

obstacle completely. I fully understand the

difficulties in any remission to the 5 actually

committed for violence and there may well be

others that would present difficulties to you.

I would hope nevertheless that you would be

able to release under your Letters Patent well

detained over half of those still detered and that the

ramainder be released within the next 12 months

If it would help public presentation in the

Colony, you may like to consider parallel

remissions in respect of persons serving

sentences for other crimes not connected with

the disturbances, although this would make it

difficult to explain the remissions in the case

of the confrontation sentences by reference to

their original exemplary character.

I am very much aware of the difficulties

of conscience involved in this matter for you

and those who serve on your Board of Review,

Nevertheless we here and in Hong Kong have

reached a most important stage in our relations

with China and in these circumstances I am ask-

ing you to consider whether the interests of

the long-term future of the Colony would not

best be served by making the most of this

opportunity to establish more cordial and

workmanlike contacts. The Chinese timed

Johnston's release for Christmas

it would be

/particularly

CONFIDENTIAL

particularly felicitous if you were able to time releases for the Spring Festival.

CONFIDENTIAL

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CONFIDENTIAL

TEL 1/500

5 January, 1971

You will recall that the Prime Minister asked for a note about our China policy and scope for initiatives. This I now enclose.

It has been seen by the Foreign and

Commonwealth Secretary, who, in approving the paper has commented that it is possible to over stress the new Chinese friendliness - they are very certain of their own superiority to other inferior peoples.

A Cabinet paper on the future of Hong Kong is in preparation.

[Sd.) J. A. N. GRAHAM

P. J. S. Moon, Esq.,

10 Downing Street.

CONFIDENTIAL

pola

CONFIDENTIAL

SINO-BRITISH RELATIONS

POLICY AND SCOPE FOR INITIATIVES

The Prime Minister has asked for a Note setting out broadly our policy towards China and what scope for initiatives on our part we see for the future He has also enquired what ti Chinese regard as their outstanding problems relating to Hong Xig, and, in particular, whether these are primarily the imprisoned Communists.

Policy and Objectives

Our present objectives towards China are:-

(a) To normalise and improve our bilateral contacts.

(b) To increase our share of the Chinese market, in particular, in capital goods.

(i) to useful membership of the United Nations, and (ii) to participate in international agreements, such as the Nuclear Test Ban Treaty, which are of limited meaning without her.

(d) To maintain the peace and prosperity of Hong Kong. (e) To maintain and improve our presence in Peking, which gives us an exceptionally high level of specialist Chinese expertise. This is of outstanding use in the context

of intelligence exchanges with our allies.

Background

However erratic China's development

with its vast populati n

and nuclear capability it is bound to occupy a commanding position in the Far East and considerable influence throughout the world. Sino-British relations in the longer term should be

/seen in

CONFIDENTIAL

טן

seen in the context of the Sino-Soviet dispute.

The best

The

prediction is that Sino-Soviet hostility will continue.

Chinese are likely to be increasingly interested in improving

Western contacts and learning of political and military

developments in Western Europe.

They have shown an interest in i

health of NATO, and, while they may go through the motions of denouncing the EEC, they may also have an interest in its development. There is also our and Europe's long-term interest

in improving contacts with China and assisting in her eventual

emergence. The Soviet Union and the United States may be

disqualified from doing so. There is, therefore, a valuable

political role we could play in Peking. At present it is the

French who reap the benefits of acting as the European interlocu!

of the Chinese.

Scope for Initiatives

4. All our policy objectives are facilitated in varying degree

by expanding contacts. Our initiatives should take the fora of

Leaving the Chinese in no doubt that we are prepared to normali:

and improve relations. During the last few years the Chinese

have contracted virtually all their foreign policy activities.

We should be ready to respond when they are prepared to take

moves towards expansion in any direction of use to us. In the

last year we have taken modest steps in such things as agreeme

in principle on a direct telephone link betwr an Peking and I

and issuing invitations to scientific congrees (net acce

The Chinese, for their part, hi

rubjects detained in Ch

2 I

•

*hos? Dr

CONFIDENTIAL

At the

in various capacities for the Chinese Government and had lived

We should nevertheless continue to ask there for many years. the Chinese about their whereabouts, but without regarding their detention as a serious obstacle to improving relations. initiative of our Mission in Peking, the Chinese agreed to a BBC We should encourage fur: There have been two delegations of British

Panorama team paying a visit to China.

press contacts.

businessmen in the last few months.

The Chinese Government now

play a full part in the formal functions of diplomatic life in London and have increased social relations with FCO officials.

Our role in Peking is limited as the Chinese regard us as

One option open to us is to send back being in semi-relations.

a Minister to head our Mission as Charge d'Affaires en titre. This we could do at any time and the Chinese are likely to reciprocate. (Both Missions are now headed by officers of Counsellor rank). A British Ambassador would be received at higher level in Peking and could have a greater influence on Chinese thinking. We have more than once offered to appoint a Ambassador so the Chinese are in no doubt that we should be pr. ared. to raise the level of our representation if they chose to wait preconditions. These, in the past, have/that we should change

our policy on three points:-

been

their

(a) our support for the Important Item Resolution on Chin e representation in the United Nations;

(b) our maintenance of a Consulate on Taiwan; and

island to be un 't zrained.

are

CONFIDENTIAL

We are considering a change in (a) (see paragraph 6 below). Nevertheless, the Chinese have been told that we are not prepared at present to change our policies on all three point. indeed to change our position on (c) involves tricky legal issues and it is not easy to see who in the future can "deter e1

the sovereignty over Taiwan. The time could conceivably co.c

when the importance of good relations with China, for example,

over the future of Hong Kong, would be over-riding and sufiic at

to justify at least closing our small office at Tamsui.

6. As regards the United Nations, since 1961 we have voted

in favour of Peking's occupancy of the China seat and the

exclusion of the present occupants. Since then, we have also

supported the American-sponsored resolution saying that this

vote required a two-thirds majority. For the first time, thi-

year, the substantive vote obtained a simple majority, and

the Important Item Resolution therefore, for the first time, effectively barred Peking's admission. We are discussing witn the

Americans whether we should now change our stand on the Import at

Item Resolution. This would almost certainly have the effect

of admitting Peking at the next Assembly. Our relations with

Peking would be disproportionately harmed if we were to mainte a our support for the Important Item Resolution when that

resolution was defeated. The American attitude is now more

relaxed and they may well see a change by s as helping on

a "soft-fall". It is important that, before the next auf

should ensure has ShareL SITE

west rn tez_s

CONFIDENTIAL

in foreign affairs, it could be that the inevitably

disruptive effect of her entry will be less than while she was

pursuing more polemical and violent policies.

7. We must, however, remember that the three precondition.

set out above are by no means the only things which the Chinese hold against us. Support for the US on a host of

issues, including Vietnam, has been quoted in the past also.

the Chinese wish an exchange of Ambassadors to take place, they could prevaricate endlessly for a variety of reasons.

Hong Kong

.ess

8. The importance of our relations with China is greater than

for other Western European countries because of the existnece

of Hong Kong. Although the Chinese have repudiated what they regard as the "unequal treaties", they have not specifically

questioned the special status of Hong Kong, preferring to say

that this is a matter which will be resoved at the appropriate

moment. Nevertheless, it remains under British rule because

China finds it convenient and profitable. Over one-third of

The China's foreign exchange earnings come via Hong Kong. Chinese will always have it in their power to make trouble for Hong Kong, in varying degrees, at any time of their choosin,. Over the past twenty years they have complained about a wic? range of subjects, from the presence of Nationalist agents 10 so-called "oppression" of Communist schocls. Of late, the :

repeated complaint relates to no concimed i

2. stel oUT"

2n. 7.

ad on nf

[

CONFIDENTIAL

China. They have recently also linked them with the future of

branches of British banks in Shanghai. They could conceivably connect them to our export possibilities even aircraft. There has also recently been some evidence that they intend to demonstrate the indignation of relatives in Hong Kong.

played their best remaining bargaining card in releasing Mr. Johnston, they may feel they need to resort to expressions

of popular concern.

The attitude of the Governor (who has statutory powers

to grant full remission) is that releasing these prisoners

Hlav

now could lead to a reduction in confidence in the firmness of

the Government of Hong Kong and be a sign of submitting to

Chinese pressure. All but 7 will be released in the normal or rse

of events by 1974. On the other hand, the situation is now

If calm, three years have passed, and pressures are muted.

the Chinese see themselves as forced to mount a full campaign

for their release, tension could increase disproportionately.

We are in touch with the Government of Hong Kong about the possibility of further releases, and have suggested that th Prison Board of Review might look particularly at the possibi y

of changes in sentences which were of an exemplary nature.

10. The Communists are under instructions from Peking to

derive as much economic benefit as they can from the Colony

and not to engage in disruptive political activity. They are at present avoiding clashes with the Government and the Chinese authorities are being fully co-operative in the previ

/of food

CONFIDENTIAL

of food and water. It is possible, within the ambit of

Chinese policy, to improve links in modest fields where they

are of advantage to us. The Chinese have recently reinstated

the Canton/Hong Kong parcel post. We may wish to discuss with

them direct railway and telecommunications links.

It is only

if friendly and workmanlike contacts can be developed that the

future of the colony can eventually be discussed. The lease of

the New Territories expires in 1997 - these comprise of 365 sq.

miles of the total land area of 400. Hong Kong Island without

the Territories would not be economically viable.

Commercial Prospects

11. The figures for our exports for January-November, 1970,

are approximately £41 million, as compared to £47 million for

the same period in 1969. The outlook for trade is nevertheles

encouraging. We should be able to hold our share of the China

market. We have told the Chinese of our readiness to sell ther

any British civil aircraft in current production, and they are

now assessing the findings of their expert mission which

visited the U.K. in September 1970. They are, in particular,

deciding about B.U.A.'s offer of four secondhand VC 10s and,

possibly, additional Tridents to supplement those already

bought from Pakistan. If we succeed in further sales, it coul.

give a good opportunity for B.0.A.C. to consider routes inte

China (Pakistan International Airlines and Air France already

operate). The Chinese would probably be interested in recipr

/rights

CONFIDENTIAL

rights involving Hong Kong or other areas such as the Persian

Gulf.

We have We are encouraging trade missions from China. considered the possibility of suggesting to the Chinese a visit by a Department of Trade and Industry nister, but believe that such a suggestion would meet with a rebuff while

substantial numbers of confrontation prisoners remain detained

in Hong Kong. There would be more advantage in inviting a

senior official, possible a Vice Minister of Foreign Trade to visit London. We are also considering trade exhibitions in

China. Our regular shipping services to China were withdrawn

at the time of the Cultural Revolution. Discussions are taking

place between commercial interests and the Chinese Mission

about resumption. This will depend on the views of our

shipping lines on the economic viability. We will ensure that

our commercial representation in Peking will be equal to any

increase in work.

Future Prospects

12.

We have now reached a crucial point in our relations with

China. Since the end of the Cultural Revolution the Chinese

have adopted a more conciliatory foreign policy in some

respects even more conciliatory than before the Cultural

Revolution. They are increasingly confident of admission to th

United Nations, and are showing a more co-operative face to the

world. We may well have to wait a long time for a more favoure e

moment to develop our relations.

Conclusions

13. (1) We should exploit the present more conciliatory 1

to expand trade and cortects wit' the Chine› in all

Fields co help so on. Chun. 1

步

eith

CONFIDENTIAL

with the rest of the world.

(2) We should develop friendly and workmanlike contacts.

over subjects of interest to Hong Kong.

(3) We should pursue with the Government of Hong Kong

the possibility of further leniency towards the remaining

Chinese confrontation prisoners.

(4) We should pursue more actively the possibility of

raising the level of our diplomatic representation

to that of Ambassadors.

eventually

(5) We should consider inviting senior Chinese officials

to the United Kingdom, possibly in the first instance a

Vice Min ister of Foreign Trade.

January 1971

FOREIGN & COLIMONWEALTH OFFICE

Registry No.

DRAFT

Letter

Type 1 +

SECURITY CLASSIFICATION

Top Secret, JAIM

Secret. 23/12

Confidential.

RETİC. Unclassified.

PRIVACY MARKING

In Confidence

To:-

P. S. Moon, Bq.,

No. 10 Downing Street.

From

Private Secretary

Telephone No. & Ext.

Department

ند مال

Afroving fafer, has

carmentad that it

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Letter despatched by Private Secretary's Dept.

£ 5 JAN 1971

You will recall that the Prime Minister asked for

a note about our China policy and scope for initiatives.

This I now enclose. Ií has been seen by the foreign & Communiweath

A Cabinet paper on the future of Hong Kong is in

preparation.

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(11181) DA. 391999 - 1,200 2/0 H".

NOTHING TO BE WRITTEN IN THIS MARGIN

(034392) ING. 737115 7504 470 Kv.

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

SECURITY CLASSIFICATION

Top Secret.

Secret.

Confidential.

Restricted. Unclassified,

PRIVACY MARKING

In Confidence.

CONFIDENTIAL

DRAFT

Type 1 +

To:-

From

Telephone No. & Ext.

Department

SINO-BRITISH RELATIONS

POLICY AND SCOPE FOR INITIATIVES

The Prime Minister has asked for a Note setting

out broadly our policy towards China and what acope for

initiatives on our part we see for the future. He has

also enquired what the Chinese regard as their out-

atanding problems relating to Hong Kong, and, in

particular, whether these are primarily the imprisoned

Communists.

Policy and Objectives

Our present objectives towards China are:-

(a) To normalise and improve our

bilateral contacts.

(b) To increase our share of the

Chinese market, in particular, in

capital goods.

healthier relationship with the rest of

the world, and, in particular:

(1) to useful membership

of the United Nations, and

CONFIDENTIAL

/(11)

NOTHING TO BE WRITTEN IN THIS MARGIN

WOBIL S1-7406

CONFIDENTIAL

(11) to participate in

international agreements, such

as the Nuclear Test Ban Treaty,

which are of limited meaning

without her.

(d) To maintain the peace and

prosperity of Hong Kong.

) To maintain and improve our

presence in Peking, which gives us an

exceptionally high level of specialist

Chinese expertise. This is of

outstanding use in the context of

intelligence exchanges with our allies.

(5) 26 increase our shaze of the

Chinese market, la particular, in

-capital goods.

Background

However erratic China's development, with

its vast population and nuclear capability it

is bound to occupy a commanding position in the

Far East and considerable influence throughout

the world. Sino-British relations in the

longer term should be seen in the context of

the Sino-Soviet dispute. The best prediction

is that Sino-Soviet hostility will continue.

The Chinese are likely to be increasingly

interested in improving Western contacts and

learning of political and military developments.

in Western Europe. They have shown an interest

in the health of NATO, and, while they may go

CONFIDENTIAI

/through

NOTHING TO BE WRITTEN IN THIS MARGIN

WTBOL ZAPOSL

CONFIDENTIAL

through the motions of denouncing the E.E.C.,

they may also have an interest in its develop-

ment. There is also our and Europe's long-term

interest in improving contacts with China and

assisting in her eventual emergence.

The

Soviet Union and the U.S. may be disqualified

from doing so. There is, therefore, a valuable

political role we could play in Peking. At

present it is the French who reap the benefits

of acting as the European interlocutor of the

Chinese.

Scope for Initiatives

Our

4. All our policy objectives are facilitated

in varying degrees by expanding contacts.

initiatives should take the form of leaving the

Chinese in no doubt that we are prepared to

normalise and improve relations. During the

last few years the Chinese have contracted

virtually all their foreign policy activities.

We should be ready to respond when they are

prepared to take moves towards expansion in any

irection of use to us. In the last year wê

have taken modest steps in such things as agres-

ing in principle on a direct telephone link

between Peking and London, and issuing invit- ations to scientific congresses (not accepted).

The Chinese, for their part, have released all

those British subjects detained in China about

whom we had expressed particular concern. The

remaining 4 believed to be still detained worked

in various capacities for the Chinese Government

and had lived there for many years. e should

hevertheless continue to ask the Chinese about

their whereabouts, but without regarding their

detention as a serious obstacle to improving

CONFIDENTIAL

3 -

/relations.

NOTHING TO BE WRITTEN IN THIS MARGIN

WIEL 51-7406

CONFIDENTIAL

relations. At the initiative of our Mission

in Peking, the Chinese agreed to a BBC Panorama

team paying a visit to China. We should

There havE

encourage further press contacts.

been two delegations of British businessmen in

the last few months. The Chinese Government

now play a full part in the formal functions of

diplomatic life in London and have increased

social relations with FCO officials.

5. Our role in Peking is limited as the

Chinese regard us as being in semi-relations.

One option open to us is to send back a

Minister to head our Mission as Chargé

d'Affaires en titre. This we could do at any

time and the Chinese are likely to reciprocata.

(Both Missions are now headed by officers of Counsellor rank ▲ British Ambassador would

be received at a higher level in Peking and

could have a greater influence on Chinese

thinking. We have more than once offered to

appoint an Ambassador so the Chinese are in no

doubt that we should be prepared to raise the

level of our representation if they chose to

These, in the

waive their preconditions.

that we should change our policy

past, have been:-

(a) our support for the

Important Item Resolution on

Chinese representation in the

United Nations;

(b) our maintenance of a

Consulate on Taiwan; and

we consider sovereignty over

on three points

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the island to be undetermined.

We are considering a change in (a) (see para-

graph 6 below). Nevertheless, the Chinese

have been told that we are not prepared at

present to change our policies on all thres

points, indeed to change our position on (c)

involves tricky legal issues and it is not easy

to see who in the future can "determine* the

sovereignty over Taiwan. The time could conceivably come when the importance of good

relations with China, for example, over the

future of Hong Kong, would be over-riding and

sufficient to justify at least closing our

small office at Tamsui.

6. As regards the United Nations, since 1961

we have voted in favour of Peking's occupancy

of the China seat and the exclusion of the

present occupanta. supported the American-sponsored resolution

Since then, we have also

saying that this vote required a two-thirda

majority. For the first time, this year, the

substantive vote obtained a simple majority,

and the Important Item Resolution therefore, fa

the first time, effectively barred Peking's

admission. We are discussing with the

Americans whether we should now change our

stand on the Important Item Resolution. would almost certainly have the effect of

admitting Peking at the next Assembly.

This

Our

relations with Peking would be disproportion-

ately harmed if we were to maintain our support,

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when that

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for the Important Item Resolution at

the motio

The American

attitude is now more relaxed and they may well

see a change by us as helping them to a

"soft-fall".

It is important that, before

the next Assembly, we should ensure that

Chinese entry is not seen as a defeat for

Western interesta. In China's present, more

conciliatory, mood in foreign affairs, it could

be that the inevitably disruptive effect of

her entry will be less than while she was

ет

pursuing more polemical and violent policies.

7. We must, however, rember that the three

preconditions set out above are by no means the

only things which the Chinese hold against us.

Support for the U.S. on a host of issues,

including Vietnam, has been quoted in the past

also. Unless the Chinese vish an exchange of

Ambassadors to take place, they could prevaricat

endlessly for a variety of reasons,

Hong Kong

The importance of our relations with China

is greater than for other Western European

countries because of the existence of Hong Kong.

Although the Chinese have repudiated what they

regard as the "unequal treaties", they have not

specifically questioned the special status of

Hong Kong, preferring to say that this is a

matter which will be resolved at the appropriate

moment.

Nevertheless, it remains under

British rule because China finds it convenient

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and profitable.

Over one-third of China's

|foreign exchange earnings come via Hong Kong.

The Chinese will always have it in their pover

to make trouble for Hong Kong, in varying

degrees, at any time of their choosing. Over

the past twenty years they have complained about

a wide range of subjects, from the presence of

Nationalist agents to so-called "oppression" of

Communist schools.

Of late, their most

repeated complaint relates to the continued

detention of 74 Chinese arrested during the

rioting in 1967. At the time, 1,832 were

arrested, and those remaining in prison are the

hard-core committed for acts of violence.

Chinese have linked their detention with that

of the 4 British subjects detained in China.

They have recently also linked them with the

future of branches of British banks in

Shanghai.

The

They could conceivably connect them

to our export possibilities even aircraft,

There has also recently been some evidence that

they intend to demonstrate the indignation of

relatives in Hong Kong. Having played their

best remaining bargaining card in releasing

Mr. Johnston, they may feel they need to resort

to expressions of popular concern.

9. The attitude of the Governor (who has

statutory powers to grant full remission) is that releasing these prisoners now could lead

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derive as much

economic benefit

as they can from the Colony and not to engage in dis- ruptive political activity.

to a reduction in confidence in the firmness of

the Government of Hong Kong and be a sign of

submitting to Chinese pressure. All but 7 will

be released in the normal course of events by

1974. On the other hand, the situation is now

calm, three years have passed, and pressures

are mited. If the Chinese see themselves as

forced to mount a full campaign for their

release, tension could increase disproportion-

ately. We are in touch with the Government of

Hong Kong about the possibility of further

releases, and have suggested that the Prison

Board of Review might look particularly at the

possibility of changes in sentences which were

of an exemplary nature.

10. The Communists are under instructions from

Peking to observe the law, but to "exploit"

Hong Kong,- They are at present avoiding

clashes with the Government and the Chinese

authorities are being fully co-operative in the

provision of food and water. It is possible,

within the ambit of Chinese policy, to improve

links in modest fielda where they are of

advantage to us. The Chinese have recently

reinstated the Canton/Hong Kong parcel post.

We may wish to discuss with them direct railway

and telecommunications links. It is only if

friendly and workmanlike contacts can be

developed that the future of the colony can

eventually be discussed.

The lease of the

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New Territories expires in 1997 these comprise

of 365 sq. miles of the total land area of 400.

Hong Kong Island without the Territories would

not be economically viable.

Commercial Prospects

11. The figures for our exports for January-

November, 1970, are approximately £41 million,

as compared to £47 million for the same period

in 1969. The outlook for trade is nevertheles

encouraging. We should be able to hold our

share of the China market. We have told the

Chinese of our readiness to sell them any

British civil aircraft in current production,

and they are now assessing the findings of their

expert mission which visited the U.K. in

September 1970. They are, in particular,

deciding about B.U.A.'s offer of four second-

hand VC 108 and, possibly, additional Tridenta

to supplement those already bought from Pakistan If we succeed in further sales, it could give a

good opportunity for B.0.A.C. to consider

routes into China (Pakistan International Air- lines and Air France already operate). The

Chinese would probably be interested in recip- rocal rights involving Hong Kong or other areas

such as the Persian Gulf. We are encouraging

trade missions from China. We have considered

the possibility of suggesting to the Chinese &

visit by a Department of Trade and Industry

but believe

Minister, la consider that such a suggestion

would meet with a rebuff while substantial

numbers of omfrontation prisoners remain

detained in Hong Kong. There would be more

advantage in new-oefeidering inviting a senior

official, possibly a Vice Minister of Foreign

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Trade to visit London,

We are also considering

trade exhibitions in China. Our regular ship-

ping services to China were withdrawn at the

time of the Cultural Revolution. Discussions

This

are taking place between commercial interests

and the Chinese Mission about resumption.

will depend on the views of our shipping lines

We will ensure that

on the economic viability.

our commercial representation in Peking keeps up

will be aqual to

the

requirementé-

Future Prospects

incntare in wolz.

work-load.

12. We have now reached a crucial point in our

relations with China. Since the end of the

Cultural Revolution the Chinese have adopted a

more conciliatory foreign policy in some

respects even more conciliatory than before the

Cultural Revolution.

confident of admission to the United Nations

and are showing a more co-operative face to the

world. We may well have to wait a long time

for a more favourable moment to develop our

relations.

Conclusions

13.

They are increasingly

(1) We should exploit the present more

conciliatory line to expand trade and

contacts with the Chinese in all

appropriate fields to help to bring

China into a healthier relationship

with the rest of the world.

(2) We should develop friendly and

workmanlike contacte over subjects

of interest to Hong Kong.

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(3) We should pursue with the Government

of Hong Kong the possibility of further

leniency towards the remaining Chinese

confrontation prisoners.

(4) We should pursue more actively the

possibility of raising the level of our

eventually

diplomatic representation

to that of Ambassadors.

(5) We should consider inviting senior

Chinese officials to the United

Kingdom, possibly in the first instance

a Vice Minister of Foreign Trade.

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PRIME MINISTER

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Fec 3/5281

Jem Johms,

FED

10 Downing Street Whitehall

4 January 1971

I wrote to you on 7 December 1970 to ask for a note on Foreign and Commonwealth office policy towards China and the Chinese attitude to Hong Kong.

I should be grateful if you could let me know where this stands.

теля

your micr

belmom

This crossed with his like to 2010.

Mr. Mugan bosce

ем

It is in type

LANC

76%

J.A.N. Graham, Esq.

1 Foreign and Commonwealth Office.

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