Background
References
A. Peking telno 1234
B. Peking telno 1262
CHINA: IRAQ/KUWAIT
1.
Chinese interests
Political
China
Good but not particularly close relations with Iraq. has recently established diplomatic relations with Saudi Arabia which it will not want to jeopardise.
political/military links with Egypt.
Nationals
Close
5,000 in Kuwait, 5-7,000 in Iraq (mostly engineering and construction workers). Now evacuating from Kuwait. Suspended air services to Iraq.
Trade
Chinese exports to Iraq: $68m (to Kuwait $134m) Chinese imports from Iraq: $85m (from Kuwat $58m) Iraq's debt to China believed to be around $500m.
Military Trade
Substantial military sales to Iraq (including F7 fighters, tanks, small arms). Continuing minilary equipment
technology transfer/cooperation.
aproximately US$500-750m pa.
Military trade valued at
2.
Bilateral Action
Secretary of State called in Chinese Ambassador on 20 August
(President Bush has written to Chinese President).
BUSAIL/2