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DSR 11C
to compete effectively with the fixed price contracts on which the Chinese insisted during their previous buying round in 1973-74. During this period Britain's competitors, primarily Japan and the FRG, secured large contracts for steel and mechanical plant, power stations and similar projects. The Chinese placed few orders
in 1975 and 1976, a period of political uncertainty and doubts over the wisdom of importing foreign technology, so exports to China in 1977 are generally well down. With the much more positive attitude of China's new leaders towards foreign trade as part of her modernisation programme, there is likely to be a steady increase in the number of orders placed in the West from 1978 onwards, particularly for advanced machinery and technology.
28.
The scale of this increase will depend on Chinese
the ability to increase their hard currency revenues, availability of Western credit and the willingness of the Chinese to use it. Though China's hard currency earnings should grow steadily in coming years, no sharp
Oil is an increase seems likely in the short term.
important hard currency earner, and the Chinese have abundant reserves (estimated at 20 billion barrels)
But the quality is generally poor, and importing countries, particularly Japan, are reluctant to invest in the
necessary special refining equipment unless assured of
secure long term supplies, which the Chinese have so
far been unwilling to guarantee.
Moreover, production
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