CONFIDENTIAL
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The Prime Minister said that Hong Kong Levertheless
was an important outlet for Japanese trade and he again
urged Mr. Sato to give sympathetic consideration to Hong
Kong's case, Mr. Sato assured the Prime Minister that he
would bear in mind what he had said. lle remarked that
as a close neighbour Hong Kong was important to Japan as
were also Australia and New Zealand.
The Prime Minister referred to the British proposals
for a five-power defence arrangement in the Far East.
Mr. Sato said that he welcomed the British Government's
He also welcomed the Government's policy in
decision.
the Gulf.
Turning to the Middle East and Indo China, Mr. Sato
said that in view of the peace treaty under which Japan
could not send troops abroad Japan was particularly
dependent on the maintenace of international peace. They
were, therefore, especially anxious to see settlements
of the conflicts in the Middle East and in Indo China. They
had welcomed President Nixon's recent propaals on Indo
China and hoped they could lead to peace. With regard to
the Middle East, particularly in the aftermath of the
death of President Nasser, it was very important to
bring about conditions conducive to peace.
The Prime Minister said that the British Government
had made clear their support of President Nixon's
statement. But Hanoi's response had been disappointing.
Ilowever, Vietnamisation seemed to be making progress and
there was perhaps room to hope that a stable situation
rather like that in Korea could be achieved. This would
open possibilities for trade and development in which
the Prime Minister understood Japan was ready to play her
part. The Foreign and Commonwealth Secretary, as co-Chairman
of the Geneva Conferences had constantly pressed Mr. Gromyko,
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