that the US side is not sincere. If the matter stands as it is now, there is no way to find a solution. I thought you would make a new proposal.
Habib noted that Lin had said we should understand the Chinese position. We hope they will understand ours.
Lin said that to settle the matter we must follow the spirit of the Shanghai Communique and the February 1973 agreement in principle. We must think about a political package settlement. If the US insists on using the term "designated nationals," it would not be in accord with the Shanghai Communique and the February 1973 agreement.
Habib said each side could study the matter and come back to it later.
Lin noted the question of the $17 million involved in third country banks and said he would like to hear Habib's comments. Habib said we agree that we should look at the settlement as a package. When we get to the package, all the items will be in it.
Lin said he fully agreed regarding the package settlement and the Chinese side is trying to solve the matter in the spirit of a package settlement. Habib said we are approaching the matter in the same spirit.
Lin said that it was in the spirit of a package settlement the Chinese side put forward its November 1973 proposals. Since Habib has made no new comment he would reiterate their position. The US side has no right to ask for the $17 million withdrawn from third country banks. This concerns our relations with third countries, and the banks have also raised the matter. This is why we cannot give back the $17 million.
Habib said that we had accepted Premier Chou En-lai's proposal as part of the package and we still consider it as part of the package. Lin said that the Chinese side had made its position clear in the past, but the US side had created side issues and made unreasonable demands. Therefore the Chinese side had withdrawn the offer regarding the $17 million. Habib responded that when we find the package, it will cover everything. Lin said that his understanding of a package settlement is different. The package is a political package; it need not contain every small item.
SECRET/NODIS
