CONFIDENTIAL 4.

12. Mr Phan Wannamethee said that the Communist Party of Thailand

was Peking-orientated but that they used to receive training and

aid from Vietnam. The Soviets were, however, a strong element in

Laos, The Soviet effort in the Third World was largely concentrated

on cultural affairs and intelligence. The Soviet diplomatic mission

in Bangkok, for instance, contained some of the top men in Soviet intelligence (they claimed that this was not to watch the Thais but

to observe China). However, they were known to make visits to

Southern Thailand rather than the North. As for ASEAN, the Thai

Prime Minister had been told in Moscow earlier this year that the

USSR did not support any regional grouping.

:

13. Mr Saleh said that Indonesia was against communism whether of

the Soviet or Chinese variety. If the Soviet aim was to delay the

development of China and contain her, this was promising. How far

the Russians could do it, however, was an open question. They might

endanger the stability of South East Asia in the process. In his

view, there was a danger to the region not from Soviet warships but

from the growth of the Soviet merchant marine. Mr Mallaby said that

the USSR could not prevent China becoming a world power; they

probably did not even think they could. But they would do all they

could to slow down the process. The development of the Soviet

merchant and fishing fleets was part of the policy of enhancing the

USSR's world-wide presence and influence. It also had an economic

objective to undercut free market prices for merchant shipping.

14.

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Mr Cortazzi then gave a brief description of his recent visits to Bangkok, Hong Kong, Kuala Lumpur and Delhi, emphasizing in particular the plight of the refugees in Hong Kong where he visited four camps.

In Delhi the Secretary of State had spoken strongly about the refugee

situation and had urged the Indian Government to take a stronger

line with Vietnam.

CONFIDENTIAL

/15.

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