dti
the department for Enterprise
7. The Japanese asked what Britain had gained from Hong Kong. Mr Howell said it was the wrong question; the British Parliament saw Hong Kong as a responsibility not something to be exploited. I explained the differing philosophies of French and British colonialism and our belief that in the final analysis Britain gained more from Hong Kong (foothold in Pacific Rim, launch pad for China, invisible earnings of £1 billion pa and investments of £20 billion) than our paltry 4% of Hong Kong's visible imports would suggest.
8. Mr Akimoto of C Itoh argued forcibly that Japan was too weak in its general policy posture towards China. As the major aid donor Japan should use its massive aid leverage to force China to become a more respectable member of the world community. The other participants agreed with this in principle but we all saw difficulties in practice. I find it significant and encouraging nevertheless that a more reflective Japanese businessman should see the need to press for "good Government" in the aid relationship with so large and powerful a neighbour as China.
The Soviet Union and Eastern Europe
9. David Howell painted a sombre picture of an Eastern Europe where Comecon trade had virtually collapsed and democratic Governments were under serious strain. On the USSR Nico Colchester of The Economist saw a long difficult haul to stable frontiers, a market economy and a common market in good and services.
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10. Mr Ishihara, focusing on East Germany, said that it would shortly become the most efficient manufacturing centre in the world (I tend to agree). Of the East European countries, Czechoslovakia would emerge first Japan and the West could help most by investment rather than aid. Mr Akimoto said that C Itoh were very cautious about investment. They were pessimistic about Poland. Eastern European lay well down the list of Japanese world priorities.
11.
Allan Gormly stuck a more positive note on the Soviet Union. It had colossal potential in oil and gas, good engineers and infrastructure. What it lacked was the work ethic and stable Government. We agreed that oil and gas presented a major opportunity - foreign exchange for the USSR, exports for Britain, Japan etc and a lessening of dependence for oil on the troubled Middle East. Pipelines from Siberia and the West were major projects well worth pursuing.
C.C.W. Adams
CCW ADAMS