CONFIDENTIAL
5.
DSR 11C
I
prosperity and well-being of its people are as much in
the interests of China as they are of this country.
have welcomed the growing practical cooperation between
Hong Kong and China, and the many indications which the
Chinese have given that their intentions towards the
territory are benevolent.
Territories lease in 1997 is casting a long shadow forward
and it will not be long before it begins to create problems
of confidence in Hong Kong. The understanding and
cooperation of the Chinese authorities will be required if
satisfactory solutions are to be found.
But the expiry of the New
'
8. In the trade field, China's modernisation plans offer
scope for substantial contracts and I see no reason why
Britain should get less of these than our European
partners; competition from the US will now be much greater.
1979 is a key year for China's future development plans,
and our own prospects in China will call for a lot of
tough and flexible bargaining. I need not rehease the
background to the Government's acceptance that our exports
should include some defensive equipment.
But I am
determined that the Chinese should not see us only or even
primarily as arms suppliers; we must continue in dealing
with the Chinese to draw their attention to the need that
our trading relations be balanced and include a high civil
element.
9. I also believe it right to respond to China's
enthusiasm for modernisation by exploiting the educational,
scientific and cultural fields.
I want to see us well
/into English
Dd 0532000 400 M 5178 HMSO Bracknell