CONFIDENTIAL
increased the West's room for manoeuvre.
It has led to a dramatic fall in the level of Sino-Soviet trade, which has benefited the Western world: the benefit might have been even greater but for the strategic embargo.
i)
16.
China's Asian Neighbours
South East Asia
Historically the Chinese have always sought to create a ring of weak vassal states around their borders. The Sino-Soviet split has led to their competing for influence in South East Asia with the Russians, who have the advantage of being able to offer greater amounts of aid and technical assistance. In Indo-China, Soviet influence appears to prodominate in Vietnam and Laos, while China appears stronger in Cambodia (though there is a strong will to independence in all three). Further afield, the members of ASEAN are creating a nucleus for regional cooperation and self-reliance. The Chinese claim to favour this and, in so far as it strengthens the resistance of ASEAN members to Soviet penetration, the claim is probably sincere. Similarly the Chinese condemn Soviet proposals for Asian collective security, which they see as part of an attempt to encircle China by a ring of Soviet client states.
17.
China's policy of improving relations with established governments is inconsistent with the aid she gives, albeit in small amounts, to Communist insurgents. Again a major concern is to prevent these movements falling under Soviet influence: China has shown little disposition to use overseas Chinese communities for subversion.
18. While hostility to the Soviet Union persists, China will welcome the maintenance of some Western influence on South East Asia. Current Chinese activities in the area do not pose great problems for the West: but the achieve- ment of China's long-term aims would be inimical to our interests there.
ii)
North East Asia
19. China also has vital interests in North East Asia. A rash move by Kim Il Sung could face the US with an agonising choice between fighting or withdrawing from Korea, and Japan with the need to consider whether her present cautious defence policies should be changed, while China would be able to support her close ally only at the risk of jeopardizing relations with Japan and the United States.
20.
Japan's importance to China is now great, particularly in the trade field. The somewhat ambivalent nature of this relationship, in which the Japanese have figured successively as inferiors, aggressors and rich relations, will prevent either party from relying too heavily on the other in any strategic sector, as will Japan's need to maintain some balance between Moscow and Peking. On the other hand they are natural partners, China with oil and other raw materials, and Japan with technology and advanced industrial goods.
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CONFIDENTIAL
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