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Britain was also concerned about such issues as the serious

imbalance in chemical weapons and conventional forces in the

European theatre.

3. After a further question, Mr Hung explained that problems on the Vietnamese/Chinese border were not new. It was normal for clashes

to intensify from time to time. The aim of Vietnam's "Chinese

friends" was to remind the world that these problems still existed. But, long-term, both Vietnam and China needed peace in order to develop their respective economies. This need for peace was more important than frictions across the border.

Mr

4. Mr Adams observed that there were some signs that the Soviet Union was willing to consider talking to China about Cambodia. Hung took a different view. The Soviet Union and China needed to

improve relations. In their manoeuvrings, each side had certain

cards to play (for example, China's "3 obstacles"). Vietnam's understanding with the Soviet Union was close and of long-standing; the Soviet Union would therefore not pressure Vietnam on Cambodia, even though the Chinese might try to exploit this.

5. Mr Adams stressed that the issue of Cambodia hampered the development of Vietnam's relations with countries who otherwise

wished to be its friends. The UN would continue to condemn Vietnam

until she withdrew. Vietnamese occupation had also created a serious refugee problem. Mr Hung referred to the frequently stated policies of Vietnam; no change should be expected.

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even the USA

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There was,

however, a mutual interest for the UK and Vietnam in finding a framework to improve their bilateral relations despite disagreements

over Cambodia. Indeed, Vietnam would seek peace and co-operation

with all countries

despite disagreements on this issue. Mr Martin stressed a point made by Sir P Wright during the

Ambassador's preceding call that the presence of Vietnamese troops in Cambodia effectively ruled out improved relations. Mr Adams reinforced this point. Trade between the UK and Vietnam was at a

risible level (£3.7m in 1985). In theory, both countries were ready

to seek an increase in this level of trade despite their political

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