289 McIntyre to Massey

Letter CANBERRA, 15 July 1949

PERSONAL AND CONFIDENTIAL

Many thanks for your letters of 5th July about Hongkong and about Indo-China. It is useful for us to have these items of information and background about neighbouring territories on which our regular sources of information are meagre.

Your letter about Hongkong raises a point on which it might be just as wen for you to bear in mind the true facts in case any mistaken impression should grow up in Singapore. You say that the Commissioner General, in reporting on recent meetings of the United Kingdom Chiefs of Staff which he attended, has stated that the decisions of the Chiefs of Staff to prepare for the defence of Hongkong, and to publicise this to the world, have been favourably commented on by the Commonwealth Governments and by the United States Secretary of State. Whether Acheson in fact went so far as to comment favourably on the plans we cannot be sure; our understanding has been that he was completely non-committal when Bevin told him about them. So far as the Australian Government is concerned, it is hardly true to say that we have commented favourably. Our line has been rather that too much emphasis and publicity should not be laid upon the defensibility of Hongkong.

We have recognised that if it comes to a showdown with the Communists the United Kingdom Government will of course have to defend Hongkong against attack. But we have urged that the emphasis should be placed rather on the capacity of Hongkong to carry on its normal functions of a trade entrepot, and try to establish its continued usefulness to China under any Government.

This may of course be without effect; the Communists may already have made up their mind that when they are in a position to do so they will renounce the 1842 and 1898 treaties and set about securing the rendition of Hongkong. But we do not think this possibility should be accepted fatalistically. By all means let the United Kingdom Government put Hongkong's defences in order in so far as this is possible. But let it be done without too much fuss. To publicise the supposed strength of Hongkong is in our view to irritate the Chinese unnecessarily. We are not much impressed with the United Kingdom arguments about the virtue of 'negotiating from strength', especially in the case of Hongkong.

A related point arises in the Commissioner General's Political Summary for May, 1949, where in paragraph 7, page 4, it is said that 'representatives of the Atlantic powers and of the Commonwealth countries agreed to follow a common economic policy towards the Communists', as a result of which no assistance should be offered spontaneously to the Communists, no advice should be offered to them in economic matters, and Communist requests should be dealt with on a practical business basis. The summary does not specify who these Commonwealth representatives were, and it accordingly tends to give the impression that all the Commonwealth Governments have approved of this economic approach to the Communists. This account is not strictly true; and it would do no harm to make sure that the Commissioner General and his staff see this matter in proper perspective. It is true that Officer agreed with other British Commonwealth representatives at Nanking in recommending the adoption of this attitude, but the Australian Government subsequently pointed out to the United Kingdom Government that the emphasis was wrong and might lead to the adoption of a standoffish attitude. So far from helping to establish reasonable working relationships with the Communists, it would tend to restrict commercial dealings with them and merely serve to feed their suspicions. We did not dispute that such commercial dealings should be on a strictly business basis, but rather deprecated the suggestion of sitting back and waiting to be approached.

It may be that the Commissioner General is fully aware of the Government's attitude on these questions. But there is as you know a tendency in Whitehall to magnify passive acceptance of a course by Commonwealth countries into active support; and this is a tendency we have been trying to correct. The Commissioner General should be left under no impression that we are accepting the United Kingdom Government's views about China and Hongkong without question.

This does not mean that we are critical of what the United Kingdom Ambassador and his Commonwealth colleagues have been trying to do.

I believe myself that they have been making earnest and sincere efforts to establish a basis of understanding and practical co- operation with the Communists. I know also that this is not easy;

but I believe it is worth persevering in the attempt.

[AA:A1838/2, 494/30/1, i]