a very good prospect for the sale of sophisticated medical equipment from the UK. The Chinese are particularly interested in rosearch knowledge and high technology equipment in the fields of non-invasive diagnosis, biomedical engineering, molecular biology and immunology.

China's interest in improving her medicine is of course part of her renewed modernisation drive that dates from the death of Mao and the fall of the "gang of four" (including Mao's widow). Keng Piao informed me that China would also be interested to investigatė British equipment for its oil and coal industries and rail transport.

For the most part Vice-Premier Keng was concerned to reiterate

He concentrated China's familiar anti-Soviet, anti-detente line. a good deal on Soviet/Cuban involvement in Africa. He emphasised China's interest in strengthening her forces, and with British

help.

He commented favourably on the Chief of Staff's recent visit

and remarks.

I would suggest that if Her Majesty's Government is in principle interested in selling arms to China, then a firm decision needs to be taken soon and the Chinese so informed. In her present mood, Britain's China seeks trade and friendship with Western Europe. main advantage is the English language, but this will be discounted if we seem unforthcoming as compared with France and Germany.

HONG KONG

I was extremely impressed by the dynamism of the people of Hong Kong, and by the commitment and enthusiasm of many of its public servants. The achievements of the colony are considerable, especially in my own fields of interest, and the tempo of improvement has been greatly. speeded up under the 'present Governor.

.The success of public health measures, particularly against T5,

Cholera, polio and diptheria, is evidenced by an infant mortality rate which is slightly lower than the United Kingdom's and a life

The former expectancy at birth of 70 for men and 77 for women.

TB hospital is now being converted for use for heart patients.

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