TNAG-0616-FCO40-764-Policy-of-UK-on-status-of-Hong-Kong-1977 — Page 67

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DSK TIC

market for Chinese oil and raw materials and in their

political requirement to get on terms with their large

neighbours. There is, however, no reason why we should no

be able to match the performance of our major West Europe al competitors, and possibly double or treble our exports

over the next few years, particularly perhaps in the

aircraft, mining and steel industries, and possibly also

in electronics and oil technology. To the extent that we

are prepared to sell arms, we have an advantage over both

Germany and Japan though (except in some sectors) not

heropens

France. We may join with our partners in some sales

Consultancy

eg the next generation of civil aircraft.

services, eg in engineering, is also a possible field,

given the current scarcity of skilled Chinese personnel.

There will not be a market in China for consumer goods.

31. The Chinese have not made any open or even implied

link between civil and military sales. A successful

conclusion to one or more military deals could however be

expected to promote civil exports. It would convince the

Chinese that the UK was serious in its intention to become

one of their most important Western trading partners, and

would increase their knowledge of British industry (and

vice versa). There could also be a negative effect if

Britain appeared to the Chinese to be unwilling to discuss

military sales. This might make little difference in the

end if all our partners acted likewise, but could seriously affect British civil exports if others, and especially the

French, were more forward than we over military sales.

132.

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