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Civil Exports
32. In the commercial field our prospects are likely to be limited by China's lack of foreign exchange, as well as by her wish to diversify trade among suppliers and partners. We shall gain some orders simply because we are a sophisticated power which, unlike Japan or the United States, can help China without coming unduly to influence any particular industrial sector or her external relations. In order to get our full share of the business, we shall need to impress on the Chinese that Britain is a reliable trading partner capable of meeting their require- ments for advanced technology. The conclusion of an Air Services Agreement and
a Shipping Agreement will help to further our interests in these areas; but we should also try to diversify our exports to China. There might be advantage in securing a consular agreement to protect British technicians who are likely to be stationed in China in increasing numbers.
Political Relations
33. In our political relations our aim should be to encourage China in her present friendly stance. Our policies can be most effectively pursued in concert with our EEC partners, who all stand in much the same relationship with China as we do. This will avoid giving the Chinese the occasion to profit from divergencies over such questions as Taiwan. Other wider questions, especially strategic, will require consultations with the US and we shall have to keep the Japanese interest constantly in mind.
34. While robustly justifying Western détente policies to China, we should show ourselves alert to the threat of Soviet expansion and determined to make a full contribution to the defence of Western Europe. Where China's encouragement of more extreme Third World demands on the developed countries clearly conflicts with her professed interest in the strengthening of Europe, we should be prepared to point this out. On the Sino-Soviet dispute we should take the line that, while we cannot remain indifferent to it, we do not intend to interfere. We should make it clear that we regard China as an important and influential country in her own right, properly a permanent member of the Security Council and a major factor in the policies of the US, USSR and Japan; and that in turn we expect to matter to China, both bilaterally and as a power with influence in European and world councils.
35.
Finally, where we can we should encourage the Chinese to take a realistic view of the world. Many of the new generation of China's leaders have never been abroad. This makes it of great importance to continue to expand high-level contacts with the Chinese so that they do not base their calculations on an ideological picture which they paint for themselves. In practical terms we should encourage Chinese Ministerial and official (including military) visits to the West; give continuing support to student and other cultural and scientific exchanges between Britain and China; and seek to formalize our access to the Chinese by negotiating some form of political consultations agreement.
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