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therefore to us in 10 years' time than today. The fact that
English is China's second language, and our shared interest
in Hong Kong, gives us some advantages, but these should not
be over-estimated. On the commercial side there are some
signs that the Chinese are beginning to place orders again
after their immediate period of readjustment. But our long-
term commercial prospects will depend on the progress of
China's modernisation programme and as usual on the
competitiveness of British firms. We are better placed for
defence sales, because of the self-denying ordinance of
several major competitors.
But contracts in general are
likely to remain modest until at least the early 1980s.
Thereafter China should become an increasingly important
market to us.
15. On the political side we must continue to demonstrate
chat we wish China well, that we are eager to help China
levelop its economy, and that we expect China to assume its
esponsibilities as a major world power. Premier Hua's visit
vas a useful first step. We must now establish the habit of
egular and where necessary hard-nosed discussions of
nternational issues with the Chinese Government, principally
hrough more Ministerial visits but also through official
xchanges in Peking, New York, Geneva and capitals round the
'orld. Given these conditions, and stability and economic
strength in China and the UK, we should be able to establish
reasonable and mutually advantageous relationship with China
ver the next 20 years and beyond. The next step should be for
s to propose a visit by the Prime Minister in response to
'remier Hua's invitation. The Department will be pursuing this
nd you will be informe in due co rse of the decision.
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