CONFIDENTIAL
DSR 11C
21. Of other friendly countries, Japan is the most
important. She is largely dependent on the US for her
defence and so long as she can rely on this, she will
be unhappy about defence sales (she expressed considerable
concern over the Spey deals in 1975) but will be
unlikely to make a major fuss. In COCOM she will in
the end acquiesce in anything the Americans acquiesce in.
22. The other countries most likely to be sensitive to
defence sales to China South Korea and Taiwan - also
depend on the US for their defence, although by 1980 there
will be no major American ground forces left in Korea.
Neither will be happy about any British defence sales,
but British interests will be little affected. In both
cases if we can persuade the Americans, South Korea and
Taiwan can be largely ignored for the purposes of this
paper though there might be adverse trade effects.
23. Of other regional powers, India would object to the
sale of defence equipment which significantly increased
China's offensive capability, but would otherwise
probably not make much of a fuss. The same goes for
the ASEAN countries, Australia and New Zealand.
24. The Soviet Union would dislike military sales to
China and would probably complain about the sale of
complete weapons systems. But it is highly improbable
that such sales would have any effect on détente or
other aspects of East/West relations, although they might
affect British commercial interests (see paragraph 32
below).
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