CONFIDENTIAL

4.

nothing in our relationship with China must divert us

from the need to pursue it, though in our own terms

and not in those perceived by the Soviet Union itself.

It will not be easy to convince the Soviet Union that

improving Sino/British relations is not specifically

directed against Soviet interests, but we must continue

to make the effort.

5. In the UN context, China's special position creates

both problems and opportunities. The longer term

issues of security, disarmament and non-proliferation

and world poverty cannot be solved without Chinese

involvement; and it is essential that the Chinese should

come to see that their own interests also require it.

The internationalisation of China's policies is an

interest which Britain shares with the West as a whole.

6. Our own narrower interests are also clear enough

in the two specific areas of Hong Kong and trade. I

have welcomed the growing practical cooperation between

Hong Kong and China and believe that it is in the interests

both of Hong Kong and of this country that we should

work with the Chinese as closely as possible to maintain

confidence and to provide for a growing level of

prosperity and well being in the Colony. Nor shall

we achieve a satisfactory solution to the longer term

problem of Hong Kong's status without close understanding

and cooperation with the Chinese authorities.

17.

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