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are mainly large ones who perhaps are able to take the longer view of what is now and is likely to remain for some time a difficult market: to name the more prominent, BP, BP Coal, British Telecom, Cable and Wireless, Metal Box, ICI and Tootal Thread. They have been encouraged to look at Vietnam in part by the appearance finally on the statute books of the law on foreign investment. During 1988, the loose ends and gaps in this very liberal piece of legislation were tackled slowly and piecemeal. Much remains to be done and there is much frustration ahead for British companies as they attempt to cope with Vietnamese ignorance of what business is all about, inefficiency, lack of communications and a touching faith that it will all come right in the end.
10. This faith, I suggest, is not fundamental to the Vietnamese psyche but a reflection of the fact that during the various wars they have fought over the last forty years or so, there has always been a substantial sponsor in the wings providing most of the wherewithal. The Soviet Union is of course still there but is now not responding very readily to all Vietnam's requests. This has been the case for two years or more and has helped to create the climate in which the Vietnamese leaders came to understand that the implications of Vietnam's occupation of Cambodia were of vital importance to Vietnam's economy. Hence their decision to withdraw by the end of 1990 at the latest and earlier if a suitable political package could be agreed with the other parties concerned.
11. During the course of the year the Cambodian problem progressed towards a solution. There is not room enough here to describe the Byzantine goings on between the Cambodian parties and the other nations more or less directly concerned in various fora. Suffice perhaps to say that by the end of the year it was no longer absurdly optimistic to envisage a solution before the end of 1989. The keys to this change of situation lie, I believe, with the Russians, the Thais and the Chinese. The Russians and the Chinese both became clearly more interested in an improvement of their bilateral relations. The Russians put more pressure on the Vietnamese and in return the Chinese accepted that solution of the problem should no longer be a pre-condition for a summit. The Chinese also found themselves forced by what can only be described as "world opinion" to soften their hard attitude in support of the Khmer Rouge who had become a questionable asset.
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12. The most startling change, however, took place in Bangkok, where the new Prime Minister earned plaudits from the Vietnamese by expressing the wish to turn the battlefields of Indo China into market places and talked of visiting Hanoi. But it was the hardline Thai Foreign Minister who made the first concrete plans to come to Vietnam early in the New Year. All this was a far cry from the strident invective of the UN debate on Cambodia and the overwhelming vote against Vietnam. The Cambodian kaleidoscope was being shaken. All the more reason for those not major players to step back and quietly watch the manoeuvrings of friends and enemies alike. Our own policy was not immune to the wind of change. In August the Prime Minister /visited
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