Authorities have authorised heads of Missions to send one telegram
in cypher following meeting reported in my telegram 245. [1]
Please acknowledge en clair by 'understood'.

2. As soon as I have received the formal letter referred to in the
above-mentioned telegram I will telegraph text en clair but I
anticipate that it will be no more than restatement of what I have
reported in paragraph 2 of my telegram 244. [2]

3. I advised in my telegram 224 [3] my view that recognition
should be accorded the new Government at a very early date. Seen
from here everything seems to support this opinion. Union of
Soviet Socialist Republics has given recognition and its Embassy
in Peking if not already open, will open shortly. Until some of us
recognise the new Government, the Soviet will have the field to
themselves. It was made clear to me in Shanghai and again
yesterday by Huang Hua that we will not be permitted to function
outside the barest Consular matters until we grant recognition.

Huang clearly expects our Embassy here to close, and confirmed
that Nanking will cease to be regarded as the diplomatic centre.

Peking will be the centre of all political activity.

4. It seems from here that, for future relations and the interests
of our trade and Nationals here, early recognition is most
important. I found recently in Shanghai that all the British
community hold this view. As soon as it is done we will be able to
open an Embassy in Peking and be in a position to report and try
and influence. Though I shall try next week in Shanghai to secure
an assurance for permit for Phillips to go to Peking at an early
date 'to secure premises for our Embassy' I am not very hopeful.

5. I appreciate that there are many other factors to be considered
such as the position of the United Nations, our relations with the
United States of America etc. But I had assumed from your telegram
number 664 and more especially from your 62 [5] that you would
favour early recognition, and did not read your statement to
Parliament on September 28th as contrary to this. [6]

6. I would be glad to have any information you can give me on the
subject. This morning our 'Communist contact' in Shanghai has
advised that Loveday picked up a broadcast reporting statement
that Australia would follow the United States-United Kingdom
policy and asked informally if this meant we are opposing early
recognition.

Clearly they are watching events closely.

After interview yesterday I took leave of Huang when he talked on
lines following paragraph 3 above. He agreed that after my
departure from Embassy, premises would continue to be respected.