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SENT DEPARTMENT SECTO 578; REPEATED INFORMATION PARIS 28, SAIGON 19.

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PARIS EYES ONLY AMBASSADOR

SAIGON EYES ONLY AMBASSADOR

I called on Chauvel following restricted meeting today. He has just returned from Paris. His impression is that Mendes-France position unchanged and that he does not intend make further concessions to secure agreement with Communists. Mendes-France anticipates active week of discussions followed possibly by last minute agreement on evening July 19. Mendes-France arrives here tomorrow afternoon. He will see Molotov tomorrow evening.

Chauvel dined last night with Communist Chinese. Li Konung and Chang Wen-tien, Vice Minister for Foreign Affairs and Ambassador to USSR who has just returned here, were present. Atmosphere was "very cordial". Chauvel informed Chinese that military discussions with Viet Minh not going well and that latter had made both for Vietnam and for Laos unacceptable proposals wholly out of harmony with what Chauvel had understood Chou En-lai's position to be. Chinese expressed surprise but did not go into details of situation. He told Chauvel that Chou En-lai would probably return here early next week saying it takes three to four days to fly here from Peking depending on weather. Vice Minister stated Chou En-lai had had "very good meeting" with Ho Chi Minh and results "would be helpful to French". Vice Minister has spent last two weeks in Moscow and Chauvel believes Communist Chinese and Soviet positions regarding problem have been coordinated, with Chinese views on Asian problem being given major weight.

There was an "underground" meeting between French Colonel Brebisson and Viet Minh military representative yesterday. At this meeting Viet Minh made two proposals (1) A demarcation line Rh