Canberra, 14 January 1972
Secret
Australian Relations With China—
Representations By The Kibels
Two members of the Kibel family, through whom the Chinese authorities in September last made the suggestion that visits by an Australian Minister and a trade mission would be welcomed, have been in Hong Kong again this month and have again had discussions with their contacts in the China Resources Company.
2. The Department’s advice to you in October, when the question of the trade mission was under discussion, was that the Chinese could be expected to interpret any further Australian enquiries about the acceptability or timing of a trade mission as evidence of anxiety, and hence of weakness. It was noted that in their dealings with us, as with others, the Chinese had displayed a tendency to stiffen and withdraw whenever we appeared eager or hasty, and a corresponding tendency to come half–way when we had been firm and patient. As we had done all that could be done to demonstrate our good will—as well as to test Chinese intentions—it was considered that our best course was to leave it to the Chinese to make the next move.
3. In submitting this advice we had not taken full account of the zeal of the Kibels. On their most recent visit to Hong Kong from 6–11 January they decided, on their own initiative, to pursue further with their contacts at China Resources Company the proposal for a visit to China by an Australian trade mission. The Kibels have informed our representative in Hong Kong that at a meeting on 8 January they had told their contacts of the embarrassment the cancellation of the visit had caused them, and had formed the strong impression that the Chinese, at least those in Hong Kong, were disappointed that the visit had not eventuated and were still interested in seeing it take place. These officials have undertaken to report this latest meeting to Peking and to write to the Kibels on their return to Australia in about three weeks’ time. At subsequent meetings on 11 January, the Kibels formed the impression that the Hong Kong officials would recommend that the visit of the trade mission go forward. In the course of these talks Mr kibel Snr. apparently told the Chinese a deliberate untruth, so as to make a recent administrative ruling of Customs appear as a ’significant Australian gesture’. 1
4. No doubt the Chinese will interpret these latest approaches of the Kibels as reflecting continued official Australian interest in the visit of a trade mission. This is the more likely in view of the letter given to the Kibels by the Secretary of the Department of Trade, which was to be shown to the Chinese, and which indicates that their involvement in the negotiations has been officially recognized. In their latest contacts, the Kibels have made no secret that they have been in touch with the Trade Commission, and this must reinforce Chinese impressions that their activities have our blessing. Thus, as long as the Kibels continue their enquiries, the Chinese will continue to receive the impression that we are actively, if indirectly, soliciting them to reverse their earlier decision. The tactic we had proposed of keeping the matter in low key and of appearing patient and firm is, of course, being frustrated. We believe that, should the Kibels be allowed to continue to appear to be acting as the Government’s agents, the impression they convey of eagerness to reach an accommodation, could seriously weaken our overall negotiating position with the Chinese, particularly if it should be decided that other more direct steps be taken towards normalizing relations. The rather unprincipled way in which Mr Kibel Snr. is performing these representations adds yet another complication.
5. In these circumstances it seems to us that the Kibels should be asked to desist from pursuing any further the proposal for a trade mission. Clearly, in view of the general interest of the Australian commercial world in trading prospects with China, and as the Kibels are under no legal constraints not to talk to the Press of their activities, notification of our wish to close the episode will be a delicate exercise calling for tactful handling. We will need to convince the Kibels that there are sound (if unspecifiable) reasons why their activities, ostensibly on our behalf, should cease. Unfortunately, an approach to the Kibels can hardly be made until they return to Australia, which will not be until after Mr kibel Jnr. has again visited Hong Kong for further talks with his contacts.
6. If the promised letter from the China Resources Company eventuates and, as we expect, is negative, the best course might be for a Minister (possibly Mr Peacock because of his personal friendship) or a senior official to talk to the Kibels. Whoever does this might take the line that while the Government is most appreciative of their past efforts and respects the ‘discreet’ manner in which they have conducted themselves throughout (even though we have sound misgivings to the contrary), the Government believes that it would be tactically unwise to seem to show continued interest, however vicarious, in the prospect of a visit to China, either by a trade mission or a Minister. We believe, instead, that our interests would best be served by other means which, for reasons of confidentiality, as they will appreciate from their own part in the recent exercise, cannot be disclosed.
7. If, on the other hand, the letter from Peking (via the China Resources Company) arrives and unexpectedly reveals indications of a real change of heart, the question of the continued use of the Kibels could be looked at again. But on what we know now, we are of the firm view that the Kibels’ part as gobetweens should be brought to a speedy end, even if Peking allowed a trade mission to proceed to China. It should then be our aim to transfer full responsibility for further discussions with the Chinese to Mr Bareham at the earliest possible moment.
8. We propose to re–submit this matter to you when the promised letter from Peking arrives, or it is clear that it will not be forthcoming. In the meantime, an additional copy of this submission is attached in case you wish to pass it to the Prime Minister, who, in a telephone discussion with me this morning, expressed considerable disquiet at the continued activities of the Kibels which he regarded as having no official status whatsoever.2
[NAA: A1838, 3107/38/18/2/1, i]
1 Cablegram 40 (11 January) from Hong Kong reported that kibel (Sr) ’said he had told the Chinese a “white lie” by portraying a recent Australian Customs administrative ruling to admit new categories of machine tools as “tool room lathes” (which he believes will let in some Chinese machines under the present tariff) as a significant Australian gesture. The Chinese had pricked up their ears at this. When we said we did not know how you would feel about this he observed that he had no official standing and had put the view forward in a purely private capacity’.
2 On 14 January, Shann noted that McMahon had read Cablegram 40 and commented: ‘Kibel was being too energetic. He had no connection with the Government and no official link. Departments should be warned that he has no official status’.