(ii) the renewal of the lease of the New Territories at Hong Kong when it expires in (?) 1985;
(iii) the possible grant of the mandate of Formosa to the United Kingdom provided the U.K. would maintain a sizeable Pacific Fleet;
(iv) settlement of the Indo-China question.
Colonel Carne's account of this was rather confused but from what he said I deduced that the Chinese would use their good offices, together with the United Kingdom and perhaps some other countries, for a negotiated settlement between the Associated States and the Viet Minh.
Colonel Carne went on to say that if we did all these things the Chinese were prepared to put a lot of trade in our way, and he mentioned Centurion tanks, jet aircraft, naval craft and the equipment of 6 armoured divisions to the tune of some £300 million.
When asked whether any mention was made of Russia, Colonel Carne was unable to say that it was, and nor was he able to explain why, since Russia is hand-in-glove with the Chinese in Korea, the Chinese Communists should wish such a considerable role to be played by the United Kingdom. He was asked how, assuming that the Chinese really wanted him to communicate all this to H.M.G. [Her Majesty's Government], they expected to get a reaction from us. Colonel Carne said that the Chinese had urged the early appointment of a fully-accredited Ambassador to China with whom they could discuss matters. (This does not make sense).
Questions elicited the fact that while the Communists were, as Colonel Carne put it, making a sponge of his mind over many months, it was not until March of this year (i.e. at about the time when they showed signs of seriously wanting an Armistice) that they put the above thoughts into his mind. He then recalled that they had given their reasons for not wanting an Armistice before. These were that they wanted to show the world that America could not fight, could not look after prisoners and was not fit for world leadership.
As far as Colonel Carne is aware, no other British officer was singled out for treatment of the kind given to him.