China (eg marine turbines, communications equipment or
Harriers), of raising the matter with the Americans
before we necessarily knew Chinese intentions in detail,
but nonetheless with some idea of what they had in mind,
gained by exploratory and non-committal contacts between
the industry and the Chinese. Such a discussion with
the Americans on a limited number of items would set
parameters for future sales even if the sale in question
fell through (or was not pursued by the UK as a result of
the discussion). There might also be a case for early
and very high-level consultations with the French, as the
other major potential arms supplier to China, for an
exchange of views on the political and strategic
implications. We should be in a much stronger position
talking to the Americans if we were confident of the
French attitude; though we risk making it easier for the
French to steal a march on us. Once the Government had
a clearer ricture of US views on the whole question of
arms sales to China it might be possible to identify a
range of less sensitive military equipment which would
fall within the guidelines we set ourselves (ie that it
should not increase significantly Chinese offensive
capability) and in which it would be safe to seek to
stimulave Chinese interest. A preliminary list of such
equipment is at Annex II [not yet ready]
60. With regard to civil sales, while there need be no
inhibitions on the active promotion of any kind of normal
industrial equipment, for certain items (eg computers)
with possible military applications the equipment may need
to be treated as a defence sale or be subject to general
consideration.
CONFIDENTIAL
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