CONFIDENTIAL
DSR 11C
The UK cannot hope to compete on an equal footing with
the Japanese, with their super-competitive economy,
their geographical proximity, their ready market for
Chinese oil and raw materials and their political
requirement to get on terms with their large neighbour.
There is, however, no reason why we should not be able
to match the performance of our major West European
competitors, and possibly double or treble our exports
over the next few years, particularly perhaps in the
aircraft, mining and steel industries, and possibly also
in electronics and oil technology. To the extent that
we are prepared to sell arms, we have an advantage over
both Germany and Japan though (except in some sectors)
not France. We may join with our European partners in
some sales eg the next generation of civil aircraft.
Consultancy services, eg in engineering, is also a
possible field, given the current scarcity of skilled
There will not be a market in China
Chinese personnel.
foreign
for consumer goods.
A
are
31. The Chinese have not made any open or even implied
link between civil and military sales. A successful
conclusion to one or more military deals could however
be expected to promote civil exports. It would convince
the Chinese that the UK was serious in its intension to
become one of their most important Western trading
partners, and would increase their knowledge of British
industry (and vice versa). There could also be a negative
CONFIDENTIAL
/effect
107991 400,000 7/76 904 £53