CONFIDENTIAL

3.

DSR 11C

role in the "Three Worlds system" on lines prescribed by

the Chinese.

Misunderstanding and conflicts of perception

may thus well persist, and as you made clear much will

depend on the extent to which the new leadership keep to the

paths they have so recently embarked upon.

4.

Nevertheless, the contacts my colleagues and I have

recently had with the Chinese bear out your view that there

is now hope for much improved understanding and scope for

a good measure of practical cooperation. Other Western

countries, notably the United States, Canada and the major

powers of Western Europe have clearly come to the same

conclusion.

So too have the Japanese and a growing number

of countries in S E Asia and the Pacific. We do not want

to be behind anyone else in seizing the opportunities which

the new situation may create for us.

5. We also have to take proper account of Soviet

apprehensions about China. Some kind of reconciliation

in the long term cannot be excluded, and we must watch out

for signs of it; but their antagonism is deep rooted and

seems likely to persist for the foreseeable future.

Soviet strength is at present more than adequate to cope with

any Chinese threat, real or imagined; Russian worries

relate to what China may ultimately become with massive

injections of Western technology. This raises the

delicate question of the form in which the complex

relationship between the West, including the US, China and

the Soviet Union will evolve.

The Chinese may be right to

regard Soviet professions of adherence to détente as a

/subterfuge,

Dd 0532000 400 M 5/78 HMSO Bracknell

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