CONFIDENTIAL
DSR 11C
33.
British firms involved in sales of defence
technology to China might also in certain circumstances
incur difficulties with US customers or component
suppliers. This would generally apply only in cases
which were "swing" cases in a COCOM context. Much would
depend on the attitude of the US Administration.
In
general, the British firms concerned are as well placed
as anybody to weigh the balance of commercial advantage.
SECTION V:
OPTIONS AND CONCLUSIONS FOR ARMS SALES
AND CIVIL SALES
34. Over the next twenty years, China will be preoccupied
with her internal industrial development. Under her new
leaders, she wishes to modernise her backward industry
and defence capability, and plans to seek Western equipment
and technology. This will offer considerable
opportunities for British industry. The scale of this
should, however, not be exaggerated, given the constraints
of China's foreign currency earnings, her unwillingness
to accept long-term credit (although the credit picture
may change) and the fact that Japan will continue to
get the lion's share of the Chinese civil market. But
the UK could also secure a significant share, and
certainly a better ore than she now does, both in the
civil and particularly in the military field, in which
France is likely to be our only major competitor.
CONFIDENTIAL
135.
D 107991 400,000 7/76 904 953