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CONFIDENTIAL

INDO-BRITISH POLITICAL TALKS: 3-4 FEBRUARY 1983

BRIEF NO 5: CHINA (AND HONG KONG)

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14 FFR 1983

POINTS TO MAKE

China Internal

122

1. Deng and his group did well in 1982 in laying down foundations

of future stable collective leadership committed to continuing

current policies. Some problems remain (eg in armed forces)

but Hu Yaobang and Zhao Ziyang are gradually establishing

their authority.

policies.

Much may depend on economic results of current

UK/China

2. Relations good. Prime Minister's visit (September 1982)

the culmination of series of high-level exchanges.

India/China

3.

What progress at latest round of talks? Prospects? Do

Chinese seem sincere about wanting to improve relations?

Any

sign of willingness to compromise?

Soviet Union/China

4. Pace of Sino/Soviet development of relations has slowed

since flurry in October/November. Chinese have deferred next

round of consultations until March, after Shultz's visit. No

signs of substantial Soviet concessions insisted upon by Chinese.

Chinese expect talks to be a marathon. No sudden breakthrough likely. Formidable obstacles - Cambodia, Afghanistan, troops

on frontier and disputed territory.

Hong Kong (defensive)

5 a.

Prime Minister reached agreement with Chinese leaders in Peking in September to enter talks through diplomatic

channels with the common aim of maintaining the stability

CONFIDENTIAL

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