Paris, 20 July 1971

3422. Secret Austeo Priority

Dialogue No. 17

Your telegram 3424.¹

I believe the P.R.C. remains interested in establishing diplomatic relations with Australia. I also believe that our present policy will not lead to anything and requires urgent re–examination in the light of what the United States has done.

2. In the circumstances, I believe too that there should not be any more discussion with the Chinese on the basis of our present policy. They rejected this approach before: they can only be expected now to be even less receptive.

3. It seems to me that leaving aside political considerations within Australia, the development of the United States' policy represented by President Nixon's announcement opens up 'a whole new ball–game' and in particular, affords us a greater degree of freedom of movement than we previously had.² Moreover, Formosa is strategically less important to us than it is to the United States and Japan and as distinct from the U.S., we have no treaty ties with Formosa. Finally, it is desirable, I submit, that we should on this issue try to avoid any impression of awaiting patiently the development of United States' policy (without prior
consultation) and then following along behind.

4. As seen from the necessarily limited perspectives of this Embassy, the main question to be considered in any policy re–examination is, I suggest; that given the profound implications of the Nixon announcement and after ascertaining and weighing what lies behind it, what are now the pros (underlined) and cons (underlined) of discussing diplomatic relations with the Chinese on the basis of the Canadian-Italian formula.³

[NAA: A1838, 3107/381182]

18 July. Addressed to Belgrade and repeated to Paris, it commented that the account of the conversation between Fernandez and the PRC Ambassador to Yugoslavia (see Document 208) had been read with 'great interest'. It added that 'we assume that, despite the visit of the ALP delegation and the negative outcome of Renouf's second meeting with the PRC Ambassador in Paris, they remain interested in establishing diplomatic relations with Australia'. Fernandez was asked if he believed the PRC Ambassador had more to say and whether there would be further opportunity for contact. Renouf was invited to comment on the contents of the cablegram.

2 In marginalia, McMahon queried this assertion, writing 'Why?'

3 Below this, McMahon wrote 'ask for more ... is this being examined[?]'.