CONFIDENTIAL
involvement of overseas
entrepreneurs.
US/China Relations
5.
-3-
particularly Hong Kong
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Mr Haig said he was looking forward to the visit although he had been surprised at some of the negative comments put out by the Chinese concerning American intentions. Two-way trade was now worth around US$6 billion annually, up 60% since normalization of relations. China was now sixth in the trading partner table when previously it was only eleventh. H E said that he saw normalization as the most important event of the decade. He asked how Mr Haig expected talks with the Chinese to go.
6.
Mr Haig said that he hoped the Taiwanese question could be dispensed with fairly quickly. Unfortunately the Carter administration's foreign policy had created real nervousness which was difficult immediately to dispel. HE pointed out that Deng's personal prestige was at stake and this made it especially sensitive. Mr Haig recognised this but felt that things would become easier as Deng established himself.
7.
On trade restraints, there was room for flexibility similarly with transfer of technology. He felt there would be a pragmatic rather than a theological improvement in relations. He had however been disappointed by a report from Mr Rockefeller after the Tri-Lateral Commission's meeting in Peking that the Chinese system of capital investment was primitive in the extreme, working year by year rather than on a long-term planned funding basis.
Multi-Fibre Arrangement
8.
In response to the Secretary of State, H E said that a subject of common concern on which he would be grateful for assistance was the MFA. He understood that the US was as
concerned as HK to avoid the chaos which would follow on a failure to renew. There would be problems if the EEC took too harsh a line with the developing countries.
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/the
He understood