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7. We have discussed this with DESO officials, including the Head of the MOD's Defence Export Services Secretariat. They are as much aware of the situation as we are, although they, like us, would like to see the revised guidelines come into effect to the benefit of British companies in the Defence sales sector.
Sir R McLaren has also been consulted. He does not think that now is the right time to contemplate relaxation because of current Chinese sensitivity about foreign arms supplies to Taiwan, the delicate state of our relations with China over Hong Kong, and the slightly higher profile we are already adapting over links with Taiwan.
8. The subject was flagged up at Mr Goodlad's forward planning meeting last month where Under-Secretaries and Special Advisers felt a priori that it was worth exploring the exploring the scope for some relaxation of our restrictions.
H L1 Davies
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