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3.
2.
President Carter has made it clear that he will be looking
to the Japanese for a special contribution to the Tokyo Summit
by adopting further measures to reduce the Japanese trade surplus
with other Western countries. In 1978 Japan had a trade surplus
of $24 billion of which 814 billion was with the US and $5 billion
with the Community.
The surplus on Current account was $16.8
billion.
Although the Japanese surplus has declined sharply
in the first half of this year owing to higher oil prices and
emergency imports, all the forecasts are that the surplus will
be sharply up again next year, particularly if the sudden
depreciation of the Yen is not reversed.
RHODESIA
4.
Japan is likely to
is likely to support the Government's approach to
The Japanese Government have in the past taken
Rhodesia.
a sympathetic attitude to the internal agreement signed at
Salisbury on 3 March 1978 which
3 March 1978 which has now led to Bishop Muzorewa's
assumption of the office of Prime Minister. Japan's principal
interest in Rhodesia (as elsewhere in Southern Africa) is in the
country's natural resources and trade potential. The Japanese
would therefore welcome the ending of UN sanctions: they have
expressed irritation in the past at the reporting by the British
Government to the United Nations of cases of suspected Japanese
sanctions-breaking (involving the importation of Rhodesian
chrome).
CHINA
Sino-Japanese Relations
5.
Japan is China's principal trading partner.
Japanese
exports to China for the first nine months of 1978 were worth
$2,000 million (as compated with British exports of £91 million
for the whole year). Some Japanese firms have had contracts
suspended by the Chinese following the recent trimming of China's
CONFIDENTIAL
/modernisation