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As you know I spent last week in China, visiting Peking and Canton, as the guest of their Minister of Railways, Guo Weicheng. I also had three days in Hongkong as the guest of the Governor, Sir Murray MacLehose.

The Chinese visit was I think successful in terms

of improving relations between the two countries and paving

the way for orders for British firms. The Minister of Railways had obviously been impressed by his reception here last year and he and his Ministry were friendly and helpful throughout. The Minister himself accompanied me on several of the visits and his Vice-Minister, Mr Liao, came specially to Canton to see me, at some inconvenience to his arrangements. I was also received by Wang Chen, the Vice-Premier who visited

Britain in 1978, and who talked in enthusiastic terms of the

importance they attached to developing closer ties with

America and Western Europe, particularly the United Kingdom.

The main purpose of my visit was to assess the market for railway equipment and expertise in China and to see what could be done to help British manufacturers and

consultants with their efforts in this field. My general conclusion is that there are real opportunities for British exports here.

The competition will be fierce, and China's

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