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The blueprints for the "sea dragon" submarine are physically on Taiwan in any case. This would avoid breaking the letter of the agreement "not to grant a permit for further export of arms to Taiwan" but would be commercially less interesting for the Dutch and would take longer as China Shipbuilding will be heavily occupied with work on the frigate order.

3.

Not necessarily (and certainly not publicly) connected with the above you might also like to be aware that the Dutch Minister for Foreign Trade, Yvonne van Rooy, has decided to take a "holiday" in Taiwan in April in a "private capacity". She is nevertheless expected to pick up a few tourist brochures about the US $320 billion national development programme, and might find that some senior Dutch industrialists have chosen the same dates to visit the island. The Director-General for Foreign Economic Relations, Frans Engering, paid a similar private visit on 14-18 October of last year. According to the NRC Handelsblad newspaper the Netherlands is the largest European investor in Taiwan (although total investment of US $50 billion in 1990 was second to the UK), Phillips is the largest European employer on the island and ABN/AMRO is the largest European bank.

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T A Jones

Political Section, Peking

RAD,

FCO

PUSD, FCO

Miss S Morton, WED, FCO

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