TNAG-0568-FCO40-701-Planning-paper-on-Hong-Kong-1976 — Page 151

6. THE OPENING BECTION ON SOUTH EAST ASIA

(PARAGRAPH 11)

IS MISLEADING IN THAT IT IGNORES THE VITAL IMPORTANCE TO THE CHINESE OF NORTH EAST ASIA. NORTH EAST ASIA NEEDS A SEPARATE PARAGRAPH. THERE'S

AN IMPORTANT CHINESE STRATEGIC INTEREST IN TTHE BAALAAAANCE OF POWER AND INFLUENCE WITHIN THE

CHINA-JAPAN-U.$.-SOVIET QUADRILATERAL AND PARTICULARLY IN THE POSITION OF JAPAN IN IT. IT IS ALSO IN THIS AREA THAT A RASH MOVE BY KIM IL-SUNG COULD FACE THE UNITED STATES WITH AN AGONISING CHOICE OF FIGHTING OR WITHDRAWING, JAPAN WITH THE NEED TO CONSIDER WHETHER HER PRESENT DEFENCE AND NON-NUCLEAR POLICIES SHOULD BE CHANGED, AND THE CHINESE WITH A SIMILAR DILEMMA IN THAT SUPPORT FOR A CLOSE ALLY COULD BRING DOWN IN RUINS THE RELATIONSHIP WHICH THEY HAVE ESTABLISHED WITH JAPAN AND THE UNITED STATES. CHINA'S VITAL INTEREST IS THUS THAT KIM IL-SUNG SHOULD NOT UPSET THE APPLE CART: AND CHINA'S STEADYING HAND 16 VERY IMPORTANT TO THE UNITED STATES. (THIS PARA COULD PRECEDE THAT ON SOUTH EAST ASIA).

7. THE PAPER HAS HOT GOT THE CHINESE ATTITUDE TO FOREIGN TRADE QUITE RIGHT. FOREIGN TRADE IS STILL SMALL IN PROPORTION TO GNP AND IN RELATION TO THE TRADE OF MANY OTHER COUNTRIES OF THE WORLD. BUT WHAT THEY ACQUIRE THROUGH FOREIGN TRADE IS VERY IMPORTANT TO THEM SINCE IT IS ESSENTIAL TO THE MORE ADVANCED PART OF THEIR INDUSTRIAL DEVELOPMENT PROGRAMME. THEIR CONSTANT EFFORTS TO IMPROVE FOREIGN EXCHANGE EARNINGS IS EVIDENCE OF THE IMPORTANCE OF FOREIGN TRADE TO THEM. THE PARAGRAPHS ONTRADE SHOULD REFLECT THIS).

8. THE RECOMMENDATIONS ON SINO-BRITISH RELATIONS SHOULD BRING OUT MORE CLEARLY THE POINT THAT CHINESE EXTERNAL POLICIES AFFECT US AT THREE DIFFERENT LEVELS AND OUR ACTIONS IN RESPONSE HAVE TO BE JUDGED

ACCORDINGLY.

(A) DEFENCE OF THE WESTERN VIEW OF HOW THE WORLD SHOULD DEVELOP AGAINST THE CHINESE VIEW IS NOT A SEPARATE BRITISH INTEREST. IT IS A GENERAL INTEREST OF THE WESTERN DEVELOPED COUNTRIES. IT FINDS ITS MOST EFFECTIVE EXPRESSION IN THE POSITIVE POLICIES WHICH THE WESTERN COUNTRIES TOGETHER PURSUE TOWARDS THE DEVELOPING COUNTRIES. (SEE PARAS 11 TO 13 OF MY DESPATCH UNDER REFERENCE.)

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