Time: 18 June 1954, 12:00 p.m. to 12:45 p.m.
Attendees on the Chinese side: Zhou Enlai, [PRC Foreign Ministry American and Australian Affairs Department Director] Ke Bainian, Pu Shouchang (interpreter)
Attendees on the Australian side: Casey, Lauren (staff of the Australian legation at Saigon)

1. Regarding the Korean issue:
Casey first assured us that he had never thought about excluding China in the future from the discussions on the Korean issue. He then said that the Korean issue is currently a mess. It therefore proved difficult for such a big conference as this one to solve the problem. He said that he originally thought that even if North and South Korea could not be unified shortly, at least some temporary measures could be taken. For example, [measures on the issues of] trade, communication, and so on between the North and the South. However, now the North and the South are like oil and water [and] do not mix.
Foreign Minister Zhou said we also hope that the North and South will not continue fighting each other. Instead, we want them to get closer. However, as Mr. Casey knows, South Korea's attitude is very unreasonable on these issues. After the sixteen countries published the joint declaration, the South Korean delegation immediately made a statement saying that it would no longer be restrained by the Korean War Armistice Agreement. This statement not only embarrassed the other members of the sixteen countries but even Smith.
Casey said that that was right and they were very angry about that, too.
2. Regarding the issues of the recognition of China and the United Nations
Casey said that currently there were still various difficulties to overcome. Therefore, it was still too early to discuss the issues of recognition and the United Nations. He said that he believes that Foreign Minister Zhou understands political issues and other issues in the world.
Foreign Minister Zhou said: It does not matter. However, Mr. Casey should know that we have complaints about these issues.
Casey asked, what did you mean by "complaint ?
Foreign Minister Zhou said that China was deprived of the authority and status to which it was entitled at the United Nations.
Casey said that, nevertheless, the improvement of Sino-British relations achieved at this time was very profitable. If [we] take a little bit longer, and use time to heal,' [I] believe that the situation will get better. He said, he understands that the Chinese people know about the time cure.
Foreign Minister Zhou said that the improvement of Sino-British relations was an achievement. I believe that it can also help to deepen the understanding of the countries of the British Commonwealth toward China through the improvement of Sino-British relations. Mr. Casey just said that the Chinese people know about the time cure,' this means that Mr. Casey has some understanding of the Chinese people.
Casey said that he believes that the improvement of Sino-British relations will deepen the understanding of the countries of the British Commonwealth toward China as well.
3. The Indochina issue.
Casey said that as far as he knows the discussion on the Indochina issue made progress because of Foreign Minister Zhou's proposals.
Foreign Minister Zhou briefly repeated to Casey what he had discussed with Eden. For example, [we] hope that Laos and Cambodia become countries of the Southeast Asian type; the two [different] situations of Laos and Cambodia should be recognized; although [Laos and Cambodia] should keep their own defense forces, foreign troops must be withdrawn; and no foreign countries should establish military bases in Laos and Cambodia, and so on.
Casey asked whether holding elections in Laos and Cambodia would be the best way to test the size of the local defense forces. Since a war is ongoing in the region, and the situation is confusing, the elections should therefore probably be held a while after the armistice. He then asked, [ ]what do you think about holding an election within twelve months after the armistice?[ ]
Foreign Minister Zhou said that elections should eventually be held in the three countries of Vietnam, Laos and Cambodia. Although the elections would probably need to be held a while after the armistice, we hope that the shorter this period of time is the better. However, the current problem is to end the war.
Casey asked whether Foreign Minister Zhou had met with the two foreign ministers of Laos and Cambodia. They would be glad to know about what Foreign Minister Zhou had discussed with Eden.
Foreign Minister Zhou said that he had not yet had a chance to talk with the foreign ministers of Laos and Cambodia.
4. Issue of the military bases.
Casey said that if a certain arrangement could be made in Indochina, Australia would definitely respect and not sabotage it. He also said that Foreign Minister Zhou did not have to be afraid of anything. They [the Western countries?], including Australia, will not conduct an invasion. He said he believed that international communism can peacefully coexist with international democratic countries.
Foreign Minister Zhou said China is willing to coexist peacefully with all the countries of Southeast Asia and the western Pacific Ocean. This certainly includes Australia and New Zealand. This is China's policy toward India. However, China also applies this policy to all other countries. These are not empty words. It is the policy that we have been following for the last five years. The People's Republic of China will not conduct an invasion, nor should Mr. Casey have any doubts about that.
Casey said that he was glad to hear that. He also said that he believed that it will not be difficult for both sides to reach an agreement as long as China does not establish military bases.
Foreign Minister Zhou asked: Did you mean that if China establishes military bases in Indochina? How could China go to Indochina and establish military bases there? We believe that no foreign countries should establish military bases in Indochina.
Casey said that what he just meant was that China should not establish military bases inside the Chinese territory near Indochina. Then he said, they [the Western nations], including Australia, establish military bases for the purpose of defense, not aggression. However, it was probably difficult for Foreign Minister Zhou to accept this explanation.
Foreign Minister Zhou said, it will be difficult for us to imagine that Australia would go and establish military bases everywhere alone if the United States had not established military bases in the western Pacific Ocean and all over Asia. We believe that only the military bases established in our own countries can be called defensive ones. Military bases established in other countries' territories are for aggressive reasons. This is our definition.
Casey said, you should not think that the United States is
that bad.
Foreign Minister Zhou said, it is the United States that has been taking a hostile attitude towards us for the past five years. Foreign Minister Zhou continued, although Mr. Casey and I can discuss all other issues, we have different understandings of the United States. However, this will not affect relations between China and Australia.P