CONFIDENTIAL

INTERNATIONAL ISSUES

8. After discussion on Hong Kong, the Prime Minister asked Chairman Deng for his views on Sino-Soviet relations and on the recent Soviet-US decision to resume arms control talks.

9. Chairman Deng said that China hoped to see progress at the

He asked the Prime Minister to persuade

Soviet-US talks. President Reagan not to develop weapons in outer space as would mean escalation in the arms race and an even more tense international situation. Of course China understood that the intention of the US in developing space weapons was to force the Soviet Union to make concessions on nuclear missiles. But space weapons should nevertheless not be developed. Throughout the 1970s and the first two years of the 1980s China's view had been that the danger of another world war existed. Now this view had changed somewhat because the forces for peace were growing fast. The British Government and the Prime Minister had exerted effective efforts in this respect. China was all for breaking the existing Soviet-American deadlock. She was making efforts to increase her own contacts with the Soviet Union. But China's situation was different from Britain's. China was faced with a direct Soviet threat. She had therefore consistently tried to normalise relations by removing the

'three obstacles" (Soviet troops on her border, Afghanistan and Cambodia). Up to now, the Soviet Union had refused to remove even one, so there was no normalisation of Sino-Soviet relations to speak of at present. Some development of economic and cultural relations had taken place and contacts of this kind could serve the interests of peace and detente. Confrontation was not the way out.

10. The Prime Minister said that Chaiman Deng's views accorded in many respects with hers. Some people, but not herself, believed that wars were caused by the existence of arms. The real danger however was not when two countries were strong enough to deter attack but when one was stronger and possessed territorial ambitions and the other was weak. Britain would like security at a lower level of weaponry. But this had to be balanced security. We had only deployed Cruise and Pershing in Europe because SS20s were targetted on us. If the Soviet Union was to destroy some SS20s in the period over which US missiles were to be deployed it would be possible to halt their deployment. We had to watch the Soviet Union closely however to ensure that she did not simply move SS20s beyond the Urals, because that would not be real disarmament. There were two other sources of imbalance which had to be dealt with in disarmament talks: first, the Soviet Union possessed enormous stocks of chemical weapons and, secondly, the Soviet Union had an anti-satellite satellite capability. It was only when the Ameircans had shown that they could develop an even more sophisticated capability in this second area that the Soviet Union had been persuaded to return to the negotiating table.

11. Chairman Deng asked for the Prime Minister's view of

Mr Gorbachev.

The Prime Minister said that she had enjoyed

CONFIDENTIAL

/meeting

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