The importance to the Chinese of European countries as a source of supply has clearly increased during recent months. Hence the increased activity of the Chinese Commercial Office in London. It is partly true that
brobably the Chinese realise that they can pocket the commercial benefits without making any political
concessions to us. We must therefore not exaggerate Chinese dependence on U.K. suppliers or our leverage
over them. Nevertheless commercial contact is the one aspect of our relations with the Chinese which remains fairly cordial and we should therefore build on this. I referred in paragraph 6(b) to the dangers of appearing too forthcoming to the Chinese in commercial matters, but this should not prevent us from continuing to be helpful and provide facilities in commercial matters in the hope that some of the goodwill generated by actions will rub off on our political relations.
*
Wilson
(C. Wilson)
13 February, 1970.
I agree with Mr. Wilson's assessment of the possibilities of improving Sino-British relations. It is clear that Sino-British trade is the only feasible azea in which we can take significant positive steps to achieve better relations with China.
2. I think it is important that we should realise the difficulties which an approach to the Chinese to release Hong Kong confrontation prisoners over the border would entail. This proposal has already been put to the Chinese at least once during the confrontation period. The Chinese rejected the suggestion out of hand and were obviously annoyed that we had suggested it in the first place. They clearly assumed that we would realise that the idea was completely unaccept- able, and seemed convinced that we were simply trying [score to debate points off them. If we were to resurrect
this proposal at the present time the Chinese would be deeply annoyed, having made their views abundantly clear in the past. Moreover, discussions on the release of prisoners inside China would raise all the old long-term problems of Chinese sovereignty over Hong Kong as well as bringing up once again the con- tentious issues which occurred during the confrontation period.
3.
A gesture such as the premature release of some
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/prisoners