CONFIDENTIAL

3

DSR 11C

6. In view of the restrictions on Government expenditure,

the prospect in present circumstances of our meeting

these costs by the provision of new money for the FCC's

grant-in-aid is unlikely. In response to my request the

British Council have been able to find £320,000 a year

for China by redeploying its FCO funds. There is however

a limit to what can be done in this way and I am satisfied

that the bulk of the money will have to come from

elsewhere.

7. I feel sure that we must go ahead with the programme

for China. The total cost is set out in the attached

table. In the light of what the British Council have been

able to find, we will require an additional £380,000 in

1979/80 and £900,000 in 1980/81, with rather more required

in the later years. I should be grateful for an

indication as to how far you think the ODM would feel able

to help.

CONFIDENTIAL

Dd 0532000 400M 5|78 HMSQ Bracknell

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