24 4173
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CONFIDENTIAL
Reference
PA
26-16
Milton
Be subback
Сс
Сс
THE MINISTER'S VISIT TO THE FAR EAST
PS/Secretary of State PS/Secretary A & 9 PS/PUSS A & S
Mr Archer MAR
Mr Jones - Air
Mr P Jones - Concorde Mr Rogers - CA2
30/€
While he was in the Far East, the Minister held discussions with:-
(a) The Governor of Hong Kong and officials of the Hong Kong
Government. These covered air services between Hong Kong. and Europe; and (with leading Hong Kong shipowners also present) the proposed Hong Kong register of shipping.
(b) Ministers and officials in the Chinese People's Republic.
These covered potential sales of UK civil and military
aircraft to China; and air services between China and the UK.
2. Records of these meetings are attached.* The Minister also had
a good many informal contacts with Chinese ministers during social occasions connected with the British Industrial Technology Exhibition, and he joined the Secretary of State in discussion with the Chinese Prime Minister, Chou En-Lai. The following were the main points or importance to emerge from these discussions, in aerospace and shipping
fields.
Aircraft Sales
the
3. The Chinese still have a lively interest in the VC 10 in spita of its uncompetitiveness in price and delivery. (They said that they had been offered VC 10s at £6m, Boeing 7078 at £4m, and Ilyushin 62s at £1.2m.) But Chinese spokesmen repeatedly express their determination to remain self-sufficient and (in Chairman Mao's terms) "to keep the initiative in their own hands", They made clear their intention of building up their own manufacturing capability, and of choosing foreign suppliers who would enable them to do this most quickly. They said they had held no discussions with Boeing about local manufacture.
4.
They were candid about their wish for military as well as civil aerospace technology . They were especially interested in the military Spey engine and the larrier. They claimed, predictably cnough, that the UK was more scrupulous about its "other involvements and commitments" (ie COCOM) than other countries.
5.
The
There were signs of serious dissension within the Chinese Government about whether to go ahead with their Concorde order. Deputy Minister of Foreign Trado, Li Chiang, said the only obstacle was securing supersonic overflying rights between China and Europe. But Chou En-Lai (apparently only partly in jest) said Li was "fighting for the Concorde, and eo far still winning".
/Air Services