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strategy to be developed from the market research effort described above. HMG should also aim to sustain a steady growth in the technical cooperation programme, particularly for technical consultancies. On both political and developmental grounds there is a case for increasing the percentage of our overall bilateral aid which goes to China.
COCOM
9. The UK was instrumental in securing recent relaxations within COCOM, so that China is now treated more liberally than Warsaw Pact countries. But there is scope for continuing liberalisation, and perhaps the complete removal of China from the scope of COCOM. Ministers have approved the MOD's conclusion that China no longer poses a strategic threat to the UK or to UK interests overseas. China's gradual economic rapprochement with the USSR. has not changed this. If COCOM were to be established today, there would arguably be no more reason for the UK to want to include China than say India. A further round of COCOM talks will take place in April 1987. The United States administration is also reviewing its
which most of our policy, with the aim of further liberalisation, European partners also support with the aim of encouraging the Chinese into a greater degree of dependence on the West.
DEFENCE SALES
10. Sales of defence equipment are covered by the guidelines of the 1985 China Review of Defence Trade Policy. These state that sales of defence and militarily significant equipment to China should be no less favourable than that to other strategically non-aligned countries with expanding defence industries, other than the continuing need to consult COCOM. In practice the Chinese are sending large numbers of PLA personnel to the UK to look at British equipment, but they have not recently made any major purchases and sales nave dropped from £44 m in 1985 to £8 m in 1986. Mr Lamont signed a MOU on defence procurement during his visit to China in 1986, bur again we have yet to see the results from this or from a Vickers/Norinco agreement. There is clearly a need for sustained pressure on the Chinese to demonstrate their sincerity and to
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