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9. The Chinese response was adroit. It was given by Deng Xiaoping during an interview with a correspondent from CBS which was broadcast in the United States on 8 September. Deng made two main points: that China wished to see an improvement in Sino-Soviet relations; but that such an improvement could not take place unless and until the Soviet Union removed the principal obstacle of support for Vietnam in Cambodia. To dramatise what he had said, Deng offered to meet

Gorbachev in the Soviet Union if the latter could indicate readiness to remove this obstacle. By responding in this way, Deng successfully retransferred responsibility

for action to the Soviet

Union. The situation did not change significantly during the remainder of the year, though it was announced in October that border talks, broken off in 1979, would resume in Moscow in February.

10. There were no important developments in relations with the United States or Japan. The Chinese would undoubtedly like the Americans to do more to prevent a movement in favour of indpendence from developing in Taiwan and to encourage the authorities there to develop commercial and other links with the mainland. But the judgement seems to have been made that too open a display of enthusiasm or anxiety could be counter-productive. As to Japan, there is still dissatisfaction over a range of political and economic

issues. In recent months, the Chinese have not spoken out over sensitive issues, such as increased military expenditure by Japan, as much as they were inclined to do at the beginning of the year. It has become clear, too, that the Chinese have reduced their expectations about the rate at which China's large deficit on trade account with Japan ($6 billion in 1985) is likely to be reduced.

11. China established closer relations with the countries in

Eastern Europe which are politically nearest to the Soviet Union. The highlights were the visits to China of Jaruzelski in September and Honecker in October. Chinese motives were probably to loosen

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