My telegram 168  and immediately preceding 220  and paragraph 7 of my despatch 19. 
2. It seems probable in the near future that (a) Canton will be occupied by the Communist forces and fugitive Nationalist Government set up at Chungking.
(b) The provincial Communist Government will be at Peking, and (c) Soviet and probably Polish and Czecho-Slovak Governments at once will grant recognition to the new Government.
3. By the end of the month in addition, the United States Ambassador, Canadian, Siamese, Brazilian and Argentine Ambassadors will have left and the French and Netherlands Ambassadors will be on the point of leaving. The United Kingdom Ambassador has instructions to leave just before the formation of the new Government and the Indian, Egyptian and Italian Ambassadors and Portuguese Minister will almost certainly do the same. I assume that you will wish me to take similar action.
4. Such withdrawal appears to be necessary unless we intend to give immediate recognition to the new Government. This involves, I understand, problems regarding China's seat on the Security Council as well as the withdrawal of de jure recognition from the Nationalist Government. To remain here would be to be in embarrassing position outwardly in territory of the Government to which we had not extended recognition. We would not be at the capital of the new Government and it is almost certain that we would not be permitted to go to the new capital prior to recognition. We would not be in a position to have even informal relations and might find our activities closely confined and even be asked to leave with consequent embarrassment to our Government.
5. I suggest, therefore, that as soon as Canton is occupied you announce that I am being either withdrawn for consultation or permitted to take leave, at the same time repeating your statement of June 21st as to future relations with the new Government.  I would then arrange to go to Japan or Hong Kong from where I could make a short visit to Australia if you approve and then return to watch the situation in China from close at hand.
6. It would be for the person left in charge of the Embassy to advise formal recognition when the time came when he would become Charge d'Affairs and presumably ask for facilities to move the Embassy to Peking if that was the new capital. He would ask in due course for Agreement for the new Ambassador.