CONFIDENTIAL
PRIME MINISTER'S CALL ON GENERAL SECRETARY HU YAOBANG: 19 DECEMBER
POINTS TO MAKE
1. Signature of Joint Declaration a landmark in UK-China
relations.
BRIEF NO 4
2. Time ripe for rapid expansion of cooperation. Political momentum important. Have discussed visits by HM The Queen (1986 likely) and Premier Zhao. Also delighted to welcome you to Britain at mutually convenient time. Much scope for greater economic cooperation. British experience matches. Chinese priorities (energy, transport, communications).
3. Have followed with interest development of open door
policy. Understand need for foreign investment. Glad to see improvement in investment climate. Legal infrastructure and taxation measures particularly important for investors in Special Economic Zones and 14 open coastal cities. Plans to
extend similar policies to interior?
4. Foreign enterprises still see difficulties: bureaucratic obstacles; high rents; short life of joint ventures. British companies also alarmed at rocketing costs of maintaining offices in China. Solution of these problems would encourage investment
and trade.
5. Admire Chinese economic reforms. My government facing different challenges but also reformist, tackling problems ignored for decades. Specific plans and timing envisaged for price and wage reforms announced by Central Committee in October?
5.
Open door also promotes international stability. Welcome emerging Chinese role in world economy. How will this develop? Objectives for balance between trade with eg US, Japan, Western Europe? Welcome wish to increase Western Europe's share.
/ 7. Predictions
CONFIDENTIAL