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Soviet escalation. They face well over 100,000 Soviet troops. They carry the offensive into Kabul with repeated rocket attacks.

Refugees

14. There are up to 3 million refugees in Pakistan.

1980 over £24 million.

UK aid since

China/Afghanistan

15. A long-standing ally of Pakistan, China has given unswerving support, both moral and material (including arms and possibly training) to Afghan resistance. China voted for all six UNGA

resolutions.

d) Korea

16. Bilateral inter-Korean trade and economic talks began in

The second round may take place in the New Year.

November.

17. North and South Korea differ fundamentally in their approach to any talks on the future of the peninsula. The South prefers direct bilateral contacts; North wants tripartite talks including the US. The South would accept 4-sided talks which included China.

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18. The Chinese have consistently supported the North Korean position in public. In private they have indicated agreement with the Western view that direct bilateral talks are a necessary preliminary to further progress. They may be adopting a long-term gradualist approach to Korea on the lines of the "one country two systems" formula. There is evidence that the Chinese are

This may prepared to impress their views on the North Koreans. have led to some friction between Pyongyang and Peking. But China remains North Korea's closest partner and historically a pro-

Kim found source of cultural and social values in the peninsula. Il Sung made a "private" visit to China in November when he was no doubt briefed on China's planned industrial reforms (the North recently adopted a Joint Venture law which seemed modelled on Chinese attempts to attract overseas investors).

/19.

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