CONFIDENTIAL
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strategic terms; to press for COCOM agreement to such sales; and to abide by the result. An alternative option might be kept in reserve, to be used subject to Ministerial judgment in specific cases namely that in the case of sales of particularly high commercial or industrial value to the UK we might go ahead despite opposition in COCOM and from our partners unless the general political or commercial objections appear to outweigh the advantages of the sale.
Within this general framework each case will have to
be considered on its merits. The attitude of the Americans
will be crucial, not only because the UK has far more at stake in the United States than could be outweighed by any possible gain in China, but also because the American attitude would determine the chances of a successful applica-
tion to COCOM. The Americans have not yet determined their policy on arms sales to China. But officials have indicated that although the US themselves would not sell military equipment to the Chinese there might not be the same object- ions to sales at certain levels of technology by third countries. The area which is likely to be vetoed altogether is that which covers equipment and technology which would upset the strategic balance: this is basically nuclear and missile technology • Marine equipment poses fewer problems for the Americans than aircraft but there would still be difficulties, eg over Taiwan.
5. The Spey aero engine deal concluded in December 1975 went through outside COCOM: inside COCOM several countries, including the US, raised reservations. But Dr Kissinger had given a private assurance that the American administration would acquiesce in the sale. There is virtually no chance that a similar understanding could be reached with the present American administration. The decision to sell the Spey to China was an exceptional case which does not constitute a precedent. The principles relating to the sale of defence equipment remained unchanged by it.
6. General Chinese interest in British military equipment has been expressed in various ways. They requested, and were given, a copy of the British Defence Equipment Catalogue
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