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CONFIDENTIAL
42377
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MR RENTON STRESSED THAT BRITAIN WAS AT THE FORE-
FRONT OF THOSE PRESSING FOR FURTHER RELAXATION OF THE COCOM
FROM BRITAIN.
RULES. HE HOPED THAT BRITISH FIRMS WOULD NOW WIN FIBRE OPTICS
CONTRACTS IN THE WAKE OF THE AGREEMENT WE HAD OBTAINED FROM OUR
COCOM PARTNERS. ZHOU NAN COMMENTED THAT THE CHINESE GOVERNMENT
APPRECIATED THE EFFORTS OF THE BRITISH GOVERNMENT IN HELPING TO
RELAX RESTRICTIONS ON EXPORTS TO CHINA SEMI COLON HE HOPED THAT
THESE WOULD CONTINUE UNTIL THE RESTRICTIONS WERE WHOLLY LIFTED.
ON TRADE GENERALLY, HE SAID THAT THE 20 PER CENT INCREASE IN TWO
WAY TRADE IN THE PAST YEAR WAS ENCOURAGING BUT NOT ENOUGH.
MR RENTON SAID THAT BRITAIN UNDERSTOOD THE NEED FOR THE CHINESE
TO GENERATE EXPORT REVENUE. WE WOULD BE GLAD TO CONSIDER WAYS
OF INCREASING KNOWLEDGE IN BRITISH MARKETS OF WHAT CHINA HAD
TO OFFER.
4.
MR RENTON REFERRED BRIEFLY TO AIR SERVICES AND BRITISH
AIRWAYS' HOPES THAT THEY COULD CONTINUE TO PICK UP PASSENGERS
BETWEEN HONG KONG AND PEKING. HE HOPED THAT THE MATTER WOULD BE
RESOLVED IN THE FORTHCOMING PEKING TALKS. ZHOU NAN'S ONLY
RESPONSE WAS TO SAY THAT THE MATTER WAS BEING DISCUSSED BETWEEN
THOSE RESPONSIBLE.
5. MR RENTON REFERRED TO THE RECENT NEGOTIATIONS ON CLAIMS
SAYING THAT IT WAS ANACHRONISTIC THAT THESE WERE STILL OUT-
STANDING WHEN SINO/BRITISH RELATIONS WERE SO GOOD. HE UNDERSTOOD
THAT GOOD PROGRESS HAD BEEN MADE IN MAY IN PEKING, AND HOPED
THERE WOULD NOW BE SUBSTANTIAL PROGRESS IN THE TALKS IN LONDON
IN THE VERY NEAR FUTURE. THERE WAS MUCH INTEREST IN THE TALKS
IN THE CITY, WHERE BANKERS WERE STRESSING THE NEED FOR CHINA TO
HAVE ACCESS TO THE LONDON BOND MARKET. ZHOU NAN SAID THAT THE
ISSUE WAS ONE LEFT OVER FROM THE PAST, AS THE HONG KONG PROBLEM
HAD BEEN. THE HONG KONG ISSUE HAD BEEN FAR MORE COMPLICATED BUT
HAD BEEN SOLVED. IT SHOULD BE POSSIBLE TO DO THE SAME WITH
CLAIMS, IF THE TWO SIDES LOOKED TO THEIR OVERALL INTERESTS AND
DID NOT QUIBBLE OVER ISSUES FROM THE PAST. THE CHINESE HAD
ADOPTED AN APPROACH BASED ON AN OVERALL PACKAGE. HE HOPED THE
BRITISH WOULD TAKE A FLEXIBLE ATTITUDE. WHEN CHALLENGED BY
MR RENTON SAYING THAT THIS SEEMED TO BE A FORMULA FOR THE UK TO
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CONFIDENTIAL