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CONFIDENTIAL

3.

modernisation and import programmes.

Friendship between China and Japan was

during Deng Xiaoping's visit to Tokyo.

Defence Sales to China

A Treaty of Peace and

ratified in October 1978

6. The Japanese have been relaxed about the prospect of British

defence sales to China, but they are concerned about the way in

which we process them with our COCOM partners.

They do not

wish to see COCOM restrictions for defence sales to China relaxed,

or suspended, while the restrictions on civil sales to China,

and on all sales to other communist countries remain in full

force, as they are interested in facilitating the sale to China

and the Soviet Union of advanced technology (eg computers)

which is also caught by COCOM rules.

7.

But

The Americans wish us to process defence sales to China

outside COCOM, through high level bilateral consultations.

the Japanese were very displeased when we did this in the case

of marine gas turbines last autumn.

It appears therefore that

however we process defence sales to China with our COCOM

partners, some of them will be unhappy over the procedures

adopted.

(A paper will be submitted to Ministers shortly.)

Proposed Visit by Premier Hua Guofeng, 29 October - 5 November

-

8.

The Japanese have shown keen interest in press reporting of

the proposed visit of Hua Guofeng to London in late October.

They have been told that the possibility of a visit has been

raised, but that no firm arrangements have been made. The

Chinese Government have indicated that they do not want the

proposal to be given any further publicity at this stage.

CONFIDENTIAL

/INDO-CHINA

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