258 Officer to Department of External Affairs

Cablegram 165 NANKING, 5 June 1949, 12.51 p.m.

IMMEDIATE SECRET

Your telegram No.62 [1] is complete confirmation of our views here.

2. As regards your query in paragraph 3 and your paragraph 4 I think that there is some confusion between (a) seeking relations, and (b) encouraging Communist efforts to secure them. We are against (a) because we think that it will encourage the Communists to try and seek concessions in return for recognition. We are in favour of (b) for the reasons you state in paragraph 4 and do not support any 'holding back' or 'standoffishness'. We have emphasized to the United States Embassy that there can be no question of holding back British private interests.

3. Your paragraph 5. The Civil Authority will not as yet accept telegrams in cypher.

Until they will I am confined to very restricted use of overworked United Kingdom Embassy wireless link. Hence we have to use agreed statements when possible and be satisfied with brief comment.

[matter omitted]

1 Document 256.

[AA:A1838/278, 494/2/10, i]