Mr. Huang "en-chun
Fr. Li nen-chun
Board of Tride
+
H
Chinese Commercial .ttache
Interpreter
Kr. Huang Wen-chun called at the Gourd of Trade in Tuesday, 21st Februar, 1967, at the request of Mr. Kaclewith. The purpose of the meeting was to give .r. Huang -dvance notification of the quotas set for importa China gis in 1967.
I
f
2. Dr. MactaVÍS. thanked kr. Huang for coming and said that the Board of Trade wad, ut continue the praction of giving the Chinese authorities "dvance jetaila of the arrangements for imports into the United nudom of those Chim, se commodities au.ject t licensing control. Mr. MacTavish thon ran through the at of goo a and indicated the asin changes which had buên cate and which afforded the Chinese Trading Corporat ns opportunities fur increasing their trade with the United Kingdom.
+
3. Xr. Huang said that Chine had always been opposed t. the quɔta system
p rated by the British Government as it constitute? a hindrance to the natural development of Sino-Pritish trade. is ccntinued in this vein it soms length and expressed the hope that the Tritish Govern nt would to steps to change the method. He also alleged that Chine s:t no limitations on British exports to China but that Pritish firms were unable to buy all they wanted from China and were also prevented from selling certain red-3.
4. Kr. KacTavish
thanked Mr. Huang for explaining again the Chinese attitude arul amid that he would ensure that his remarks were unde known to his nuthorities. He thought it unnecessary to have a long discussion on our differing views which were already well knwn both in London and in Peking. He accepted that we were not at the pint to which the Chinese would like us to go in our trading relations, but we were nevertheless travelling in the right direction and had made consirable progress last year and again this year.
he hoped to maintain this progress. The "nited Kingdom was no longer the sain exporter to China mong the countries of estern Europe, and both est German and Prench exports in 1966 were higher than ours. it the same time the United Kingdom reained China's biggost importer in
astem durope. He hoped that we would regain our position as the biggest ast Buropean exporter to Chins and that he would also ountinue to be the principal importer of Chinese goons, There were may opportunities to be grasped to our mutual
Trade had increased in both directions in 1966 and we hoped to see a further rise in 1567. He asked that what he hid said in this connection should be brought to the attention of the authorities in leking.
dvantage.
5. Kr. Huang agreed that there had been an increase in Sino-British trade in 1966 and said that the increase in China's imports resulted from the further development of the Chinese national economy and also "t'a response to the call of Chairman Mao Tse-tung of "rasping revolution and stimulating production". He then repeated China's objctions to british artificial barriers to trade, ato.
/6.
AL
6. Kr. Huang spoke in Chinese throughout and it was obvious that he was under instructions to play te usual gramophone record about barriers to trade, etc. He did so however in a more friendly manner than Kr. Li Meng-nou, thanked Mr. MacTorish for the information and accepted the draft botics to Importers and the seperate detail relating to textiles. He undertook to inform his authorities in .eking of the changes and of what Mr. 'MacTavish had said about H.K.G.'s hopes for increased trade in both directions in 1967.
(A. K. R gora)
Board of Trade
Commercial Helations and Exports
Department
2nd March, 1967
COFFI
ป
KTI
طاب
Noted
Sino-British Trade Council
SB
TC
中央貿易协会
President: Mr. John Keswick C.M.O.
32
Sponsors: The Association of British Chambers of Commerce
The Federation of British Industries
Our Ref: NFW/FEC
The China Association
The London Chamber of Commerce
21 Tothill Street, London S.W.1 Whitehall 6711
All Members of the Council
1st March, 1967
Dear
fur kioss,
I am sending you herewith a list of the Executive Council as at February 1967.
Yours sincerely
Enter + B.u. on
3 April ( for meril Council meeting).
том зро
3/ü
N.F. Webb Secretary General
Pa.
RECEIVED IN
ARCHIVES No.31
- 3 MAR 1967
FC6/1
SB
Sino - British Trade Council
TC
中英貿易协会
RECEIVED IN ARCHIVES No.31
- 3 MAR 1967
President: Mr. John Keswick cu
FC6/:.
The Association of British Chambers of Commerce
The Confederation of British Industry
The China Association
The London Chamber of Commerce
February 1967
21 Tothill Street, London S.W.I
Whitehall 67||
COMPOSITION OF THE "EXECUTIVE COUNCIL"
President:
Mr. John Keswick, C.M.G.
r. II.F. Bibby,
Director,
Associated Electrical Industries
International Ltd
33 Grosvenor Place,
London S.W.1.
Kr. J.F. Bramley,
Managing Director,
British lotor Corporation
Export Sales Ltd.,
Longbridge,
Birmingham,
Mr.
J. Brereton,
Local Director and Assistant
to l'arketing Director,
Vickers Engineering Group Ltd.,
P.C. Box 177.
'Vickers House'
Millbank Tower,
Millbank,
London S.W.1.
Ir. K.J. Collar, C.8.E.
1
1
Chairman of
atheson & Co.Ltd. 3 Lombard Street London E.C.3.
MANsion House 6555
Representing
The London Chamber
of Commerce.
BELæravia 1234
Representing
The Association of
British Chambera
of Commerce.
BIRningham Priory 2101
Representing
The Confederation of British Industry.
TATe Gallery 7777
Mr. Eliot Hodgkin,
Oversean General Manager,
Imperial Chemical Industries Ltd., 'Imperial Chemical House',
#111bank
London S.V.1.
Representing
The China Association
LONdon Wall 1160
Representing
The Confederation of British Industry.
VICtoria 4444
2
+
Mr. A.E. Marker, Director,
Arnhold Trading Co.Ltd.
'Creechurch House', Greechurch Lane,
London E.c.3.
Mr. W.H. McNeill, C.B.E. Chairman & Hanaging Director. The Glen Line Ltd.,
16 St. Helens Place, London E.0.3.
Mr. S.C. Seward, 0.3.E. Chairman,
Platt Bros. (Sales) Ltd.,
'Oceanic House',
La Cockspur Street, London S.W.1.
Mr. J.A. Stafford,
Joint Managing Director,
Rank Taylor Hobson Division of the Rank Organisation, P.0. Box 36.
Leicester House,
Lee Circle, Leicester.
1. H.S. Stebbing
Managing Director,
Barrow, lepburn & Gale
(Machinery) Ltd.,
19 Grange Road,
London S.E.1.
Mr. N., Waite,
Export Manager,
British Insulated Callender':
Cables Ltd..
P.0. Box No. 5.
21 Bloomsbury Street, London W.0.1.
1
Representing
The China Association.
AVenue 1122
Representing
The China Association.
LOYdon Wall 2333
Representing
"The Association of British Chambers of Commerce.
TRAfalgar 4023
Representing
The Confederation
of British Industry.
Leicester 23801
Representing
The London Chamber
of Commerce,
BERmondsey 4525
Representing
The London Chamber
of Commerce.
MUSeum 1600
3
WORKING COMMITTEE
Mr. E.S. Taylor
(Chairman)
Mr. H., Williamson
Mr. A.S. Gilbert, C.D.E.
Kr. H.H. Bullard
Head of E. European & N.
Asian Department, Confederation of British Industry,
21 Tothill Street, London S.W.1.
(Tel: WHItehall 6711)
Secretary,
The China Association,
'Broad Street House' 54 Old Broad Street, London E.C.2.
(Tel: LONdon Wall 1160)
Assistant Secretary
The Association of British
Chambers of Commerce. 68 Queen Street, London E.C.4.
(Tel CITY 7211)
Head of Overseas Dept., The London Chamber of
Commerce,
69 Cannon Street, London E.c.4. (Tel: CITY 4444)
Secretariat:
r. N.F. Webb
Mr. P.S. Harshal1
Secretary-General
Chinese-Secretary
14. I.
MacTavish
Mr. D.J, Moss
Er. R. Reid-Adam, C.).E.
4
OBSERVERS
E
Representing
The Board of Trade.
Representing
The Foreign Office.
Representing
The British National Export Council.
RESTRICTED
D.J. Moss, Esq. Far Eastern Department.
With the compliments of
COMMERCIAL SECTION
(A.J. Hunter)
THE OFFICE OF
THE BRITISH CHARGÉ D'AFFAIRES
PEKING
21 February, 1967
Enter and
fa
Дом зай
(1121/67)
RESTRICTED
office of the British
Charge d'Affaires,
PEKING.
21 February, 1967
31
RECEIVED IN ARCHIVES No.31 |
An article on page 10 of the Financial Times of
14 February sayai-
- 3 MAR 1967
FC6|1
"Two important contracts involving the export of British plant to China are expected to be signed soon. One of the firms involved is ready to send a small mission to Paking to negotiate final details."
2. This is news to us we had indeed been tending to discount the possibility of any further complete plant contracts while the present political situation lasts. The only British firm who we know to be actively interested in a complete plant contract here is Humphreys and Glasgow (for a further fertiliser plant), but although we are half expecting a further visit from them before long we had not heard that this contract was anywhere near completion. Have you any idea what companies this article night be referring to? Or could you possibly find out?
I am copying this letter to Moss in the Foreign Office.
(A. J. Hunter)
First Secretary (Commercial)
A.K. Rogora, Esq.,
Commercial Relations and Exports Department, BOARD OF TRADE.
RESTRICTED
B (2029)
CONFIDENTIAL
Reference
יהו--וייי
Be
Mr. Wilson
Mr. Derson
Mr, Bolland
RECEIVED IN |ARCHIVES No.31
SINO BRITISH TRADE
1 5 FEB 1967
FC6/1
이
I attended a luncheon today given by the Sino British Trade Council in honour of the Chinese Commercial office and Bank of China. Six officials from the Commercial Office led by Mr. Huang Wen-chun attended together with four officals from the Bank of China.
2. We were treated to a long and boring account by Mr. Huang of recent developments in China. He repeated the Party line on the Cultural Revolution and complained in standard terms of the obstacles to Sino-British trade raised by the British Govern- ment, namely, the COCOM embargo and quota restrictions The only new development was that Mr. Huang com- plained bitterly that the British Government had afforded Mr. Kosygin every possible opportunity to slander China. He added that such unfriendly actions could not fail to affect relations between Britain and China and would also harm the growth of Sino British trade.
3. The only amusing event during the whole luncheon was that Mr. Wu from the Bank of China who by his
dress and manner had already manifested certain bourgeois tendencies, managed to fall asleep during the singing of Chairman Mao's praises. Such obvious indifference was a source of considerable dismay to some of his blue-suited colleagues.
FatalA
S
денон
(D. J. MOSS)
(FC 6/1)
CONFIDENTIAL
10 February, 1967
Te recently sent Donald Hopson in Paking a copy of our paper on Sino-British trade, together with a copy of de la Kare's letter of 17 January to Mackahon.
2. Hopson has now written to let us know that he agrees generally with the paper, even though he feels that with the way things are going at present, the effect of the Cultural Revolution on the Chinese economy and therefore on trade in 1967 may be rather greater than we anticipated. He feels, however, that our proposals to try to incresse trade are, in general, still valid. He also agrees with the suggestions which de la Bere rode to Keolishon in his letter of 17 January that we should contime with our preliminary preparations so that when the right moment comes we are well prepared to take advantage of it.
an i
3. In the meantime, Hopson stresses that there is no point in one of your officials trying to go to Canton in the spring. He agrees that we should hold over this idea
until the autumn.
1. 1. P. MacTavish, Baq....
Board of Trade,
London, S.7.1.
CONFIL
بھل
(E. Bolland)
com to/ii
desp 10/2
Mre
(83126) 88
NOTHING TO BE WRITTEN IN THIS MARGIN
Registry No.
29
FC 6/1
DRAFT letter
Type 1 +
To:-
Top-Secret.
Sporet.
Confidential.
Restricted.
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M. B.E.P. MacTavish
From
Mr. Bolland
Telephone No. & Ext.
B.O.T.
Department
Wa
recently
Hopson
Peking
paper
together
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NOTHING TO BE WRITTEN IN THIS MARGIN
Enie DAM
Sino-British Trade Council
28
SB
TC
中央貿易协会
President: Mr. John Keswick C.M.G,
Sponsors: The Association of British Chambers of Commerce
The Federation of British Industries
Our Ref: NFW/FEC
The China Association
The London Chamber of Commerce
21 Tothill Street, London S.W.1 Whitehall 6711
9th February, 1967
President and Members of the Executive Committee.
Dear
Lunch on Tuesday 14th February.
I am sending you herewith a list of those attending the lunch next Tuesday. Would you kindly wear your badges if you have them.
+
RECEIVED IN ARCHIVES No.31
1 0 FEB 1967
FC6/1
Yours sincerely,
N.F. Webs Secretary General
pa
:
Luncheon at the Connaught Rooms, Great Queen Street, London W.C.2.
at 12.45 p.n. on Tuesday, 14th February, 1967
Host Mr. John Keswick, C.M.G. President of the Sino-British Trade Council.
Office of the Commercial
Counsellor of the Peoples' Republic of China.
Mr. Huang Wen-chun, Commercial Secretary.
Mr. Sun Shih-wei, Commercial Section.
M*.
Jen Ju-tai, Commercial Section.
Mr.
Shih Sung-shen, Commercial Section.
Mr. Chen Yuan-shen, Commercial Section.
Hr. Li Wen-chun, Commercial Section
The Bank of China
Mr. Wang Wei-tsai Manager.
Mr. Li Yu-Min, Assistant Manager.
Mr. Wu Kung-chao,
Direct Trade Promotion Division.
Mr. Joe Wu-Fu,
Direct Inward Bills Division.
Mr. H.F. Bibby
Mr. J. Brereton
Mr.
Sino-British Trade Council
H.J. Collar, C.D.E.
Mr. A.S. Gilbert, C.B.E.
Mr. 1..3. Grant
ir. D. FacTavish
Secretariat
Mr. H.F. Vebb
I. P.S. Marshall
Mr. A.E. Marker
1. D.J. Nosa
I. R. Reid-Adam, C.B.E.
一
Mr. S.C. Seward, 0.0.E.
Mr. H.S. Stebbing
Mr. E.S. Taylor
Mr. N.V. Waite
r. H.B. Williamson
RECEIVED IN ARCHIVES No.31
- 8 FEB 1967
| FC6||
(1121/67)
CONFIDENTIAL
27
Office of the British Chargé d'Affaires,
PEKING.
30 January, 1967.
Mr Bolland.
Ponti
사업성
7/2
Dear
Archur,
Many thanks for your letter FC 6/1 of 17 Jamary enclosing a copy of a paper on trade with China.
2. We agree generally with the paper although with
mm. the way things are going at present, the effect of the
том
Cultural Revolution on the Chinese economy and therefore on trade in 1967 may be rather greater than we anticipated. Your recommendations, however, are in our view still
Me mu se 9/il valid. I also agree with the suggestions made in your
again
wilk
letter to MacMahon that we should nevertheless go on making our preparations so that when the right moment comes we are well prepared to take advantage of it. Meanwhile there is clearly no point in anyone in the Board of Trade trying to come to Canton in the Spring. let us, as you suggest, hold this idea over until the Autumn.
1/2 * 3.
Incidentally we do not yet seem to have received a copy of the record of John Keswick's call on the Secretary of State, though I have had a letter from John himself which mentions it.
*
P.S.
We have now
yours
Donald
(D. C. Hopson)
found the record
A. J. de la Mare, Esq., C.M.G.,
Foreign Office.
1
Wett
CONFIDENTIAL
M.
Bollyand
Confidential
Reference.........
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RECEIVED N
ARCHIVES No. 10
19 JAN 1967
F
ted
Matheson & Co., Limited
3 Lombard Street,
London,
EGS
BERD. 19% M/!
+
IM&Co
JARDINE, MATHESON & COMPANY LIMITED
CHINA TRADE BULLETIN NO. 59
CONFIDENTIAL
1. POLITICAL
During the last six months in China all policy and planning has been subordinate to "The Great Proletarian Cultural Revolution", the principal aim of which is "to utterly destroy bourgeois idealogy and vigorously establish the supremacy of Mao Tse-tung's thought".
Marshal Lin Pizo, the "close comrade-in-arms" of Chairman Mao Tse-tung, is now Chairman Mao's chief deputy and indicated successor. While the purpose of this bulletin is to comment on trade and not on politics, the over-riding factors in China Trade today tend to be political. In the modern Chinese view, trade and politics are indivisible and politics must be placed in the forefront. The same ruling applies to literature, art and education.
In June all schools, universities and colleges were closed for six months, pending complete reform of the educational system. Details of the new educational system have not yet been announced, but the guiding principles are:-
(a) the period of schooling is to be shortened. Marshal Chen Yi, the Chinese Foreign Minister was recently quoted as saying that the curriculum in universities is to be reduced to four years, so that the graduates can make themselves useful members of society at an earlier age.
(b) theoretical study in the classroom is to be combined with periods of productive
labour in factories or on the land.
While the original announcement of the closure of schools and colleges indicated a six months break in education, there have been recent announcements that the schools will not reopen until the summer.
By the closure of the schools and universities, the leaders of the Cultural Revolution acquired a shock force of students, popularly known as the "Red Guards", with which to implement the revolution. Eight massive rallies were held in Peking during the summer and autumn. Including those marching in procession on the National Day on October 1st, a total of 11 million revolutionary students, teachers and Red Guards were personally reviewed by Chairman Mao. The onset of cold weather in Peking has now necessitated the suspension of rallies in the capital until the Spring. Meanwhile a campaign of criticism continues against certain senior officials who are accused of being "anti-revolutionary."
Two other important events must be recorded during the period covered by this bulletin. On the 8th August, the Central Committee of the Chinese Communist Party adopted a 16 point Decision, codifying the previous directives on the Cultural Revolution. This was the most important policy document made public in China during 1966.
Later, to quote the official communique: "On October 27, 1966, China successfully conducted over her own territory a guided missile nuclear test. The guided missile flew soundly, the nuclear head precisely hit the target in the scheduled distance and the nuclear explosion was realised. This is a great victory of Chairman Mao Tse-tung's thought and a brilliant result of The Great Proletarian Cultural Revolution". A fifth nuclear test was conducted on the 28th December.
.
Jardine, Matheson & Company Limited
ECONOMIC
China Trade Bulletin No. 59
1966 has been the first year of the Third Five Year Plan and while there have been recent references to successful progress in implementation of the Plan, with factories surpassing their quotas for 1966, no details of the actual Plan itself have been released.
From an analysis of press reports however it is clear that agriculture remains the founda- tion of the economy, with industry as "the leading factor".
Agriculture-Despite drought in some areas, harvests in 1966 were generally satisfactory, with good rice harvests being reported from East and South China. There were substantial tonnages of rice available for export during the second half of 1966. A Hsinhua release during the last week of December claimed that the grain harvest had been the best for 17
years.
The main task of industry continued to be to "give vigorous support by turning out more products suited to the needs of the countryside". In October, the official "Peking Review" stated that China's output of chemical fertilizer in the first nine months of 1966 was 37 per cent higher than in the same period of 1965. It was claimed that the quality of nitro- genuous fertilizer was maintained while that of phosphatic fertilizer went up.
However China's own production of chemical fertilizer is still falling a long way short of the countryside's increasing needs and in November, China contracted to buy more than 3 million tons (in terms of Ammonium Sulphate) for delivery in 1967 from West European manufacturers. Negotiations continue with Japanese producers, who are expected to succeed in selling 1 to 2 million tons in 1967.
Industry-The emphasis has been on "Self Reliance". There have been many claims of technical advance, increased production and successful overcoming of obstacles due to intensive study of Chairman Mao Tse-tung's works. Among the technical advances claimed have been the synthesis of benzene, a new fermentation de-waxing process in oil refining and a new automatic oxygen top blown converter for the steel industry.
The Chinese steel industry received considerable publicity in the autumn, with frequent references to increased production and improved products. China's new modern oilfield, Taching, was also much in the political spotlight during the year, being held up as the example for other state enterprises to emulate.
China now appears to be nearing self-sufficiency in crude oil. The major bottleneck remains refining capacity.
3. FOREIGN TRADE
In the absence of official Chinese trade statistics it is difficult to get the full picture of China's total foreign trade. However from a study of the official trade statistics of certain countries trading with China, a reasonably accurate assessment can be made. From such a basis it is possible to see that China's foreign trade improved significantly in 1965, with imports up nearly 20% and exports up about 15%. It is still too early to make a close estimate for 1966, but the indications are:-
(a) a continued reduction in trade with Socialist States,
(b) increased imports from capitalist countries, but with a slower growth rate than
1965,
(c) increased exports, again with a slower growth rate.
Repayment of the debt to Russia in early 1965 facilitated a realignment of trade. While the increase in exports does not seem to be matching the increase in grain purchases, China has sufficient foreign exchange for immediate purposes.
During 1966, exhibitions were held in China by organisations from Great Britain, Belgium, France, Sweden, Poland, Hungary and East Germany.
Jardine, Matheson & Company Limited
China Trade Bulletin No. 59
Exhibitions in China in 1967 are planned by Denmark, Sweden, Switzerland, Italy and Japan.
For their part the Chinese held exhibitions during 1966 in Japan, Hong Kong, France, Rumania, Hungary and East Germany.
4. RUSSIA
Chinese foodstuff and textile exports to the U.S.S.R. continued to drop during 1966 as did Soviet deliveries to China of petroleum products. Soviet exports had rallied during 1965 and while Soviet overall trade with China during that year was three times that of British trade with China, the ratio for 1966 is expected to be substantially less when the final Soviet figures for the current year are available.
Machinery, rolled steel products and sawn timber continue to be the main articles imported from Russia. The Soviet-Chinese Commission on Scientific and Technical Cooperation signed a protocol in November for technical cooperation during 1967. Despite idealogical differences, Russia continues as one of China's major trading partners.
5. JAPAN
Expulsion of pro-Peking elements from the Japanese Communist Party has led to the three principal Japanese "friendly firms" falling from grace in Peking.
nlay
Japanese trade with China amounted to £204 million during the first eleven months of 1966, compared to £169 million during the year 1965. The total of two-way trade exceed £215 million by the end of 1966. The most interesting individual sale by Japan was an iron ore pelletising plant for China, to be built by Hitachi.
Japan and China have no formal diplomatic or trade relations and Sino-Japanese trade conducted under a memorandum known as the Liao-Takasaki agreement. 1967 will be the fifth and final year of the current L-T agreement and it is within the framework of this agree- ment that contracts for basic commodities, such as fertilizer, are concluded.
The memorandum for L-T trading for 1967 was signed in Peking in November, after lengthy negotiations on the rice barter issue. China requested Japan to import 300,000 tons of Chinese rice during 1967, while Japan (having had an unprecedentedly favourable rice crop) only wished to import 180,000 tons during the coming year. Compromise was eventually reached on a figure of 200,000 tons of rice for 1967.
Full particulars of the memorandum for 1967 have not yet been released but some of the details that have been reported are:--
(a) Japan is to buy 700,000 tons coking coal, 50,000 tons iron ore, 50,000 tons pig iron
and 1,000,000 tons of industrial salt.
(6) China is to buy during 1967;-
37,300 tons medium steel sheets
13,000 10,000
hot-rolled thin sheets
H
TH
16,000
..
cold-rolled sheets galvanised sheets
8,000 tin plates
84,300 tons steel products
As already mentioned, the 1967 fertilizer contract is still being negotiated.
C
Jardine, Matheson & Company Limited
GREAT BRITAIN
China Trade Bulletin No. 59
Figures so far available for Sino-British trade during 1966 are:-
1966
1965
1964
(Jan./Sept.) (12 months) (12 months)
Exports to China (Millions)
Imports from China (Millions)
£21.9
£26.2
£24.9 £29.7
£17.7
£24.6
While British shipments to China have increased, there is little evidence to show that new business is being concluded at a sufficient rate to provide shipments at a higher level in 1967.
The second half of 1966 saw the commissioning at Luchow in West Chins of the ammonia synthesis plant built by Humphreys & Glasgow, the delivery of the first 15,000 ton cargo vessel built for China at Sunderland and a large British exhibition in Tientsin, organised by the Scientific Instrument Manufacturers Association. This exhibition was a follow-up to the small but very successful British Scientific Instruments Exhibition held in Peking in 1964.
It was a matter of sheer bad fuck that the timing of the exhibition in September coincided with the high-tide of the Cultural Revolution in Tientsin. While there was good attendance from electronic factories in the Tientsin area, the exhibition was in effect a local one, without the nation-wide attendance accorded to the I.C.1. Exhibition in Tientsin in September 1965. The higher academic and research professors from Peking, Shanghai and other centres were not given leave to attend and perhaps 50% of the impact of the exhibition was lost. However, as with all such exhibitions, the success can only be judged by the orders received during the next twelve months. Some encouraging orders have already come in.
Of all the European manufacturers, Great Britain has been the most successful in the sale of chemical plants to China. Imperial Smelting Processes sold "know-how" on zinc smelting in 1966 and erection is now in progress at Lanchow in North West China of chemical plants supplied by Vickers-Zimmer and Simon-Carves. British firms continue to be com- petitive in the sale to China of steel and machine tools.
To sum up the current prospects for expansion of British sales to China:-
(a) any sizeable expansion is dependent on an improvement in political relations between
Great Britain and China, which at present can only be described as cool,
(b) the Chinese market for imports of foreign machinery is a small one by world
standards and the prospects for rapid expansion are not good,
(<) competition for a share in any future expansion will be fierce.
7. WEST GERMANY
West German exports to China continue to increase at a rapid rate. Shipments for the first nine months of 1966 were £32.2 million, compared to the United Kingdom's £21.9 million for the same period.
Earlier in the year, the sale of a large steel complex to China was being negotiated by a consortium of Weat German firms headed by Demag. Despite a guarantee of credit from the West German Government, the sale of the steel complex did not materialize. Neither did Mannesmann succeed in selling a steel pipe plant. However Schloemann sold two rolling mills and German merchants are showing great activity in selling a wide variety of products to China such as chemicals, steel and machine tools. After the Overseas Chinese and the Japanese, the largest contingent at the Autumn Canton Fair came from West Germany.
Jardine, Matheson & Company Limited
FRANCE
China Trade Bulletin No. 59
French efforts to set up close cooperation with China, following the establishment of diplomatic relations in 1964, have begun to bear fruit. Air France opened a weekly air service from Paris to Shanghai in September 1966. In December the French motor manufacturing firm of Berliet announced the further sale of 600 heavy duty lorries. This followed the sale last year of 1035 Berliet vehicles, mainly dump trucks.
A consortium of French electrical firms were also reported as having submitted a tender for a large power station. However at the time of writing it is understood that no French firms have succeeded in selling a complete plant to China in 1966. There is no news of the vehicle manufacturing plant sold by Berliet in 1965, other than that the contract is in course of being implemented.
9. HOLLAND
Following the unexplained death of a Chinese engineer in The Hague in July and the expulsion of the Chinese Charge d'Affaires, diplomatic relations between China and Holland have been severely strained. Retaliatory action by the Chinese has so far been restricted to the refusal to accept Dutch material under certain contracts. There is also a ban on the use of Rotterdam as a shipping port under the same contracts. However now that the party of Chinese engineers has has been permitted to leave Holland, an early settlement of the dispute is likely.
10. AUSTRIA
During 1965 the Chinese established a trade mission in Vienna, which was followed by the opening of an Austrian mission in Peking. After many months of negotiations-and premature reports of the conclusion of a contract-it was finally confirmed in November 1966 that Voest had signed a contract to build an L-D (oxygen blast) steelmaking plant at Taiyuan. The contract was stated to be worth more than £5 million.
11. SWEDEN
A plant for the pre-fabrication of housing sections, built in China by the Swedish firm of Siporex, was commissioned during the summer.
Swedish trade to China has increased significantly from small beginnings, with sales of steel and mining machinery, following a successful exhibition in Peking. A large Swedish exhibition is scheduled to be held in Peking in April 1967 and 450 tons of exhibits are already on their way out by sea. However, according to a recent press release from Stockholm, the exhibition may have to be cancelled as an alternative site cannot be found for the exhibition. The original Peking Exhibition Centre is reported to have been requisitioned for use by the Red Guards as a barracks.
12. SPAIN
Negotiations continue for the building in Spain of a number of merchant ships for China on a barter basis, in exchange for Chinese foodstuffs and light industrial products.
13. CANADA
The Canadian Prime Minister, Mr. Lester Pearson, stated in November that Canada would consider steps to give diplomatic recognition to China if efforts to seat her in the United Nations should fail. Meanwhile the Chinese response to a Canadian suggestion that both Taiwan and The People's Republic of China should be seated in the United Nations was that the suggestion constituted "a grave provocation against the Chinese people".
In 1966 Canada harvested the greatest wheat crop in her history (840 million bushels) and Canadian hopes for higher prices have been discounted to some extent by the recent news of record wheat crops around the world.
Jardine, Matheson & Company Limited
China Trade Bulletin No. 59
In December China signed a contract to buy £25 million worth of wheat from Canada under an agreement dating from August 1966, which calls for Chinese purchases of from 168 million to 280 million bushels over a three year period. The latest purchase of 34 million bushels is to be shipped from Pacific coast ports between January and July 1967.
Efforts continue to increase Canadian purchases of Chinese textiles to redress the imbalance of trade.
14. AUSTRALIA AND NEW ZEALAND
Australian Wheat sales to China have continued with a further contract being signed in October, providing for 61 million bushels worth £36 million to be shipped before June 1967, if all the options are fully exercised.
While China has sharply increased her buying of non-ferrous metals in world markets over the past year (perhaps 40,000 tons of copper and 25,000 tons of zinc during 1966), Australia has not shared in such sales due to government policy. Metal sales to China of this nature are considered to be inconsistent with the presence of Australian troops in Vietnam.
Australia and New Zealand have continued to make substantial sales of wool to China and have found a new market in China for their pedigree livestock.
Chinese exports of minerals, textiles, shoes and light industrial products to Australia are helping to balance the trade.
15. CANTON FAIR-AUTUMN 1966
The 20th Canton Fair was held from the 15th October to the 15th November 1966. According to an official Chinese press release after the close, 20 times more business was transacted at the 20th Fair than at the first Fair in 1957. Attendance was reported to have exceeded 6,000 businessmen from 60 countries, compared with 1,000 visitors at the first Fair years ago. While as usual it was stated that the number of contracts and the total turnover bad broken all records, it was perhaps significant that the feature of the Fair given most pro- minence in the Chinese press was that 60,000 copies of the "Quotations from Chairman Mao Tse-tung" had been sold at the book counter.
ten
There is no doubt that the Fair closed in a successful atmosphere, in contrast to the fears expressed in Hong Kong in early September, when many Chinese merchants in the Colony were wondering if the Fair was going to be held at all. Reports of rough handling of Overseas Chinese by the Red Guards had made habitual visitors to Canton reluctant to travel. Preliminary information received in Hong Kong through the China Travel Service, that Chinese staff of foreign firms would not be allowed to stay in the saine hotel as their foreign colleagues, also contributed to the anxiety.
In early October energetic steps were taken by the Canton authorities to reassure Overseas Chinese that they would be welcome in Canton. Some 1,200 Overseas Chinese attended the Opening Cremony, compared to the usual number of 1,500. Throughout the Fair Overseas Chinese came and went freely and Chinese staff of foreign firms had no unusual problems. However Overseas Chinese business activity (as opposed to attendance) appeared to be less than usual.
Speeches at the Opening Ceremony, attending by a total of 2,700 hosts and guests, were made by:-
Tseng Sheng
Yang Hao-Lu
Liao Cheng-chih
-Mayor of Canton
Chairman of the Fair Committee
-Vice Minister of Foreign Trade
-Chairman of Japan-China Friendship Association
Chairman of the Committee for Overseas Chinese Affairs Chairman of the Chinese Committee for Afro-Asian Solidarity
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Jardine, Matheson & Company Limited
China Trade Bulletin No. 59
As was to be expected under present circumstances, the speeches were almost wholly concerned with the Cultural Revolution and made only fleeting references to trade.
Liao Cheng-chih was one of the co-authors of the Liao-Takasaki agreement, under which Sino-Japanese trade has been governed for the last four years. On the evening following the Opening Ceremony, Liao was host at a dinner for the large Japanese contingent, numbering 600. By the end of the Fair a total of 750 Japanese merchants from 230 firms had attended the Fair. A press release issued in Tokyo after the Fair stated that Japanese sales contracts with China had amounted to only £23 million, including 16 million worth of steel sold before the Fair in Peking. Japanese purchases from China at the Fair amounted to £21 million.
News of the Chinese guided missile nuclear test reached Canton in the early morning of the 28th October. The Fair was closed that morning for a celebration ceremony and a triumphal procession through the streets. Most of the foreign visitors attended the celebration ceremony in the Fair courtyard, but only a few joined the procession.
'The main features of the Fair from the business point of view were:-
(a) the weak produce market in Europe, where prices did not reach the levels at which the Chinese were prepared to sell. When the Fair closed, substantial stocks of traditional Chinese produce remained unsold. Some large contracts were concluded after the Fair, when the European market had strengthened.
(6) a much improved range of Chinese cotton qualities, which resulted in substantial business, also an improvement in the range of Chinese machinery and instruments offered for export,
(c) great activity in the purchase of steel by China and in the sale of Chinese chemicals
for export.
The Closing Ceremony on the 15th November was again political in content, speeches being made by Tseng Sheng and Yang Hao-lu only.
Throughout the Fair, Red Guards were scrupulous in observing their instructions not to interfere with visitors to Canton. On one of the Sunday holidays during the Fair, a social gathering was arranged for visitors to meet the Red Guards and to learn their views at first hand.
North Korea and North Vietnam also held small exhibitions in buildings adjacent to the Chinese Export Commodities Fair.
16. HONG KONG
The Chinese Machinery and Instruments Exhibition in Hong Kong in August and the Chinese Furniture Exhibition in September were well attended and successful.
Imports from China during the first ten months of 1966 amounted to 139 million, compared with 145 million for the full year in 1965, continuing Hong Kong's role as the leading source of foreign currency for China. The Cultural Revolution has so far had no noticeable effect on deliveries of Chinese goods to Hong Kong.
Hong Kong's domestic exports to all countries for the first ten months of the year increased by 144 percent compared with those for the corresponding period in 1965. The pattern of trade remained much the same, with the United States being the Colony's biggest customer, followed by the United Kingdom, West Germany and Japan.
Mr. Frederick Lee, the Secretary of State for the Colonies, paid two visits to Hong Kong during the latter part of the year to discuss local administration and the Colony's financial contribution towards its own defence. Arrangements for the Trade Development Council and the Export Credit Insurance Corporation neared completion.
I
Jardine, Matheson & Company Limited
China Trade Bulletin No. 59
1966 has not been an easy year for Hong Kong. There were the Kowloon riots in April and a freak rainstorm in June caused 60 deaths, 125 landslides and widespread damage. However the economy-apart from the property market-appears to have recovered from the unsettled conditions of 1965, when the banking troubles slowed up investment and expansion.
17. CONCLUSION
While the Cultural Revolution has tended to inhibit further purchase of complete plants from abroad, Chinese routine imports and exports have continued unaffected. Passenger rail transport has been greatly congested due to the mass movement of Red Guards but there has been no return to the chaos in goods transport which occurred during the Great Leap Forward of 1958. Shipment dates on exports are being met and quality maintained, with rare exceptions.
Opportunities continue for Western business in China in certain specialized fields, However the Chinese market, compared to opportunities elsewhere, is likely to remain restricted and difficult under present circumstances.
HONG KONG: 31st December, 1966.
(1121) RESTRICTED
D.J. oss, Esq.
oss,
Far Eastern Department.
RECEIVED IN
ARCHIVES No.31
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Feb/1
With the compliments of
COMMERCIAL SECTION
Now
COM
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(A.J. Hunter) "Mm Newbury
Enter than
1. ER.DLIN
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THE OFFICE OF
ELE 13/3/67.
THE BRITISH CHARGÉ D'AFFAIRES
PEKING
1 February, 1967
BOM 6/1
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(1121/67)
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Office of the British
Charge d'Affaires,
PIXING.
1 February, 1967
Please refer to our exchange of telegrams (EXCED No. 1 in beth directions of 26 and 27 January).
2. We have now received the copy of the Financial Times containing the article which you referred to, and it contains nothing to make us change our earlier opinion that Chinese payments are unlikely to be affected by any developments in the cultural Revolution 80 far.
3. There have been a number of references in the Chinese press and wall posters (including the one mentioned in the Financial Times article) to various disruptions in trade; administrative delays in the trading corporations, delays in availability of produce, and delays in transport arrangements. These have been going on for some months, although I have little doubt that they have grown somewhat worse since the beginning of this year. The experience of British buyers of Chinese products who have been in Peking recently confirms the impression given by the Japanese that Chinese exports are going to be considerably affected by these difficulties during the next few months.
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4. There is however no indication yet of any immediate effect on Chinese purchasing from abroad, or on payment for those purchases they have already made. Obviously if the Chinese sell much less this year than in previous years, there is a possibility that they will have less foreign exchange available for imports next year. At the moment however they appear to be signing contracts for purchases from abroad at very much the usual rate although it is true that there have been fewer spectacularly large contracts in recent months. In any case the Chinese are cautious traders, and dislike being in debt to any other nation; so one can be fairly certain that if their foreign exchange coffers start to run dry they will stop buying long before the danger point is reached. Meanwhile, they are likely to continue to be punctilious about paying on the nail.
5. We will of course let you know if subsequent developments cast any doubt on the payments position.
I am copying this letter to Rogora in Commercial Relations and Exports Department and Moss in the Foreign office.
(A. J. Hunter)
First Secretary (Commercial)
M.G. Stephens, Esq.,
Export Credits Guarantee Department,
59-67 Gresham Street,
London, ...0.2.
HESTRICTED
Ph.D. Hoss Sear
F.ED.
Fo
RECEIVED IN
With the Compliments
ARCHS No.31
-6 FEB 1967
of
VERY Y A. K. ROGORA
BOARD OF TRADE
FC6/19
Comp/29
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Enter and fa Dom 6/II
Ou.
re: CRE 311/66
Your refere
BOARD OF TRADE
Commercial Relations and Exports Department
1 Victoria Street, London S.W.1 Telex: 25955 Answer Back: BOTHQ LONDON
Telegrams: Advantage London S.W.1
Telephone: Abbey 7877, ext. 2747
BY DIPLOMATIC AIR BAG
3rd February, 1967
B
Since I wrote to you on 17th January about Plesseys, we have had lunch with them in company with John Denson and David Moss from the Foreign Office.
We managed, I think, to allay their immediate fears. and they are going to get in touch with us again later when and if they get a summons from Peking. One thing which is exercising the minds of Plesseys, and particularly the engineers concerned, is when will the summons come. They have asked Techimport to give some indication about timing but not surprisingly none has been forthcoming. If the opportunity should present itself perhaps you could ask Techimport what their intentions are in releation to Plesseys' engineers. In the present state of affairs the answer may well be a lemon.
A. J. Hunter, Esq.,
First Secretary (Commercial), Peking
(A. K. Rogora)
(A.49) RESTRICTED
D.J. Moss, Esq.
Far Eastern DepartmentECEIVED IN
ARCHIVES No.31
- 6 FEB 1967
FCG/1
With the compliments of
COMMERCIAL SECTION
(A.J. Hunte:
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Mr.
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office of the British
Charge d'Affaires,
PIXING.
1 February, 1967
Thank you for your letter CRE 311/66 of 17 January informing me that about 10 Plessey engineers are likely to be coming to stay in Sian for a period beginning in May or June of this year. Ι must say that, in present political circumstances and after our recent troubles in Lanchow, I view this prospect with mixed feelings. I was told last week by a Jardines representative that some people from Farmer Norton may be coming before long to a site somewhere near Peking, so it looks as though we are going to have plenty of people to look after.
2. It is understandable that Plessey should be worried at the moment about sending people to China. The Vickers-Zimmer and Simon-Carves technicians in Lenchow are finding life restricted and noisy, and are not enjoying having a grandstand view of the Cultural Revolution. But the Foreign Office are quite right to advise you that at the moment we have no reason to believe that foreigners in China would be badly treated. The Chinese are likely to postpone the engineers' visit themselves if they feel that they will not be able to look after them properly, and for the time being Plessey should certainly go ahead with their plans.
3. As a result of our experience with complete plants in Luchow and Lanchow, there are several points which I think it important that you should make to Plessey at this stage. These are AS follows:-
(a) The Chinese will hold Plessey rigidly to the wording of their
contract. Plessey should therefore ensure that there are no ambiguities, and that there are no stipulations in the contract from which they may want to depart, e.g. if the contract specifies that two electrical engineers are to come they will not be allowed to bring three, nor will they be allowed to bring two administrative men instead. If Plessey have doubts about any particular parts of the contract, they should approach the Chinese now about renegotiation.
(b) Particularly in view of the restrictions of life in China
Plessey will almost certainly want to import goods into China for the personal use of their engineers, e.g. food and drink, air conditioners, radios etc. They must ensure in good time that all the arrangements for the import of these goods questions such as whether an import licence is required, payment of or exemption from import duty have been agreed
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and
in writing with the Chinese. Though I know we have to be careful about recommending individual firms, I think that Plessey would be well advised to ask the ascistance in making these arrangements of Jardine Matheson, Hong Kong, who have had experience of doing this work both for Simon-Carves and
A.K. Rogora, Esq.,
Commercial Relations & Exports De arment, BOARD OF TRADE.
/Vickers-Zimmer
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Vickers-Zinner and have learnt a great deal therefrom.
(c) More, I imagine, than in any other country in the world it is
important that any personnel who are to live in a comparatively renote part of China for several months or more should be neither nervous nor excitable by nature. Plessey should bear this in mind when selecting the men they send. It is especially important that the Site Manager should be chosen for his reliability, resilience and level-headedness as well as any necessary technical qualifications.
(d) Plessey should inform us in Peking in advance of the movements
of any personnel coming to China. The personnel themselves should report to us in "eking on arrival, and should keep us informed of their addresses and telephone numbers when they are elsewhere in China.
(e) In general, nothing should be left to chance or should be made
dependent on Chinese goodwill or understanding. I am thinking particularly of the need to check the dates on visas which have been issued, and to ensure that both sides understand how long any particular individual is going to stay in China.
3.
I think also that you ought to ask Plessey to keep in the closest possible touch with you (and us) about this project from now on, and to consult us immediately if there are any aspects about which they have doubts. We will of course advise you promptly if there is any change in the situation here which we think may affect their plans.
4. Mr. Phillips of English Electric, who you mentioned in your letter had come to work on the Simon-Carves polyethylene (not fertilisat plant, had a meal with us on his way through on 14 January. He seemed a fairly seasoned campaigner, and just the right sort of person to be going.
I am copying this letter to David Moss in the Foreign office.
(A. J. Hunter) First Secretary (Commercial)
RESTRICTED
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Recd=24.
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Menonendum
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General
27
CONFIDENTIAL
Meeting with Mr. Fuang "en-chun
31st Januar 1967
Following our meeting on 11th January, arrangements he been made for us to visit Longworth Instruments Ltd., Abingdon, on Thursday, February 2nd. My memorandum of that meeting refers.
I took a present of eggs from my smallholding, and these were accepted. Huang and Li Wen-chun were in very good humour. Li left us alone.
(1)
(2)
We spoke of the forthcoming visit to Longworth Instruments. It occurred to us that there might be a Chinese medical officer among the seven officers now in this country to take over the ship built by Doxfords. If this was the case, Longworth wished to invite him to join us in examining their anaesthetic apparatus, and possibly to tour a local hospital, where he could see it in use.
No medical officer had arrived.
Agreed that we shall leave Gloucester Gate by hire car at 8.30 a.m. on February 2nd. Huang would be accompanied only by Y.F. Hsia, (A newcomer on the scene), and myself.
He could not stay overnight, and did not wish to return at a late hour. We may stay for dinner, but he would wish to be back in London by about 9 p.m. He would wish to visit a hospital and see the equipment in use.
He had informed the Foreign Office about the journey, and I undertook to pass the car registration number to David Wilson today.
I told him I had it in mind to ask Mr Keswick for permission to visit the Canton Fair in April. What was his view, and would he support my application?
No difficulty envisaged. I should inform CCPIT as usual, seeking their sponsorship, and he would be consulted. There should be no problem.
I wondered if I might not take the opportunity also to attend the Garments Fair at Shanghai if I made the trip.
(Huang) That would be simple, because the two fairs are both to be held in Canton this Spring, as a matter of convenience. They would be open at the same time.
Cont'd....
(3)
(4)
(5)
2
I asked if I might publish this information in our monthly bulletin. Agreed, but Huang particularly asked that I should preface the report 'I have heard that .....', 1.e, with no attribution.
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In reply to my wish that the Canton Fair authorities should send us an invitation to each fair as a matter of course, Huang said that this was not done even for 'so-called Trade Commissioners and representatives of foreign countries in Hongkong and elsewhere'. Our present system worked very well, and we should continue as before.
(Huang) The ship at Doxford's will be formally handed over on or about February 17th. The name of the Director in charge of arrangements is Mr Stephenson. huang would support my request if I asked to be present at the ceremony, and ne agreed that we might publish photographs in our bulletin.
I asked whether his problem concerning the Prinex contract had been solved, as I had taken some action in the matter.
All was now well, the contract and specifications had been signed, and both sides were happy. Really? yes, really. He had given a dinner party for Sir Frank Kearton last night.
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I assured him that I had taken prompt action following his complaint against the sewing machine company, (previous memorandum), and hoped we should soon have good news about that matter too.
He produced a letter from another company, and asked me to read it. The company informed him it was unable to fulfil the order placed in 1966, due to 'recent restrict- ions' imposed by the Board of Trade. The letter was dated January 24th 1967. I promised to look into the matter.
At this point he referred to 1966 figures, and what we would call the closing of the trade gap' Letters such as he had just shown me did little to improve trade
pr relations between our countries. ( sair).
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