CONFIDENTIAL
DSR 11C
SECTION VII:
CONCLUSIONS
61.
In the years ahead, two constants in the development
of China are likely to be the emphasis on the speedy
modernisation of the economy, and the continuation, with
some variations of intensity, of the Sino-Soviet split.
China will present the United Kingdom with opportunities
for closer relations and for the expansion of British
exports to China, in the defence as well as civil fields.
To accept these opportunities will bring advantages, in
economic terms and for British political interests.
These include both Hong Kong and the more general
desirability of increasing China's links with the West
and hence her own interest in policies which do not
destroy these links. Accordingly, these opportunities
should be taken up, and contacts with China's leaders
should be maintained.
62.
As part of this general policy, British civil exports
to China should be pursued vigorously. The Chinese,
however, are also interested in buying military technology.
This raises important strategic and political issues for
the United Kingdom and our allies. Strategically, the
only general objection is to sales which directly increase
China's offensive capacity. Politically, the views of the
United States and of other members of COCOM must be taken
into account. The recommended course of action is to
promote arms sales within the limit of what the British
Government believe to be strategically acceptable, to
press for COCOM agreement, and to abide by the result, while
retaining the possibility of going ahead against opposition
with a particularly important sale if we could get away
with it.
CONFIDENTIAL D 107991 400,000 7/76 904 953