CONFIDENTIAL
Chinese market is worth the initial effort of penetration.
То
counter this, HMG should encourage British firms to give due weight to the long-term export potential to China.
6. The current trade balance is in our favour. We should adopt as
liberal a position as we
can (consistent with safeguarding the vital interests of UK industry) in EC discussion on the regime governing imports from China and we should seek to avoid being wrongly perceived by the Chinese as any less liberal than our EC partners. In consultation with the Sino British Trade Council and 48 Group, we should do what we can to help the Chinese find markets in the UK for non-sensitive goods. The scope for undertaking more market research on China, and the ground it might cover, should also be discussed with the Sino British Trade Council and 48 Group. The possibility of the BOTB's export marketing research scheme (EMRS) funding further market research might be considered, provided there is enough interest on the part of the industry. In any event, closer co-operation between the 48 Group and the Sino British Trade Council should be encouraged with a view to their eventual merger.
AID (Commercial, Educational, and Scientific)
7.
British aid to China at present consists of a modest technical cooperation programme costing £4m per annum in 1987/88, and a soft loan facility under the ATP Scheme worth £300 million (which will cost the aid programme approximately £90m over 20 years). The soft loan facility has already been provisionally allocated to 5 industrial projects, all of which are still being negotiated commercially. The technical cooperation programme funds technical consultancies, about 100 exchange programmes between British and Chinese Universities, 30 English Language Training posts in China, and the training of Chinese students in the UK (about 800 out of a total of 1900 students, compared with a total of almost 20,000 Chinese students in the US). China is also eligible for ATP Mixed Credit, and offers for 3 projects have already been approved. 8. HMG should continue to look sympathetically at requests for ATP support in order to achieve our primary objective of encouraging the growth of exports on normal commercial terms. In the longer term, ATP resources should be directed towards projects relevant to the
FC3AAU
CONFIDENTIAL