TNAG-0654-FCO40-803-Refugees-from-Vietnam-in-Hong-Kong-1977 — Page 131

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"Yes,

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CONFIDENTIAL

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Aid. In the light of Mr Tesh's letter of 15 July to me, I took him through the latest position on aid: that the Secretary of State and Mrs Hart, when considering human rights and aid, had agreed on a case-by-case approach, but that meanwhile the Sporetary of State was still considering the submission on British action over the worst human rights offenders which, in the case of Vietnam, advised against giving capital aid. In any case, in my view, we could not be seen to expand our aid to Vietnam so long as the White case was unresolved. Mr Tesh said he would advise strongly against capital aid to Vietnam (see paragraph 13 of his letter of 15 July). This sort of aid would not gain us any real political credit in Hanoi and it was a fact of life that the Vietnamese prized more attentively the projects which they had had to pay for themselves rather than those which were free gifts. Hence his first preference would be for greater commercial (Section II) credit with which the Vietnamese could buy their own plant, etc. I said that this was valuable advice which we would pursue.

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Vietnam's Future. I challenged Mr Tesh's contention that the Vietnamese would not "go Maverick" except from desperation, and not from political design. I said I thought that the 50 m Vietnamese were the most virile force in that part of the world, and though they were now set on recovery and rebuilding, in the long run they would be an expansionist force in South East Asia. I agreed that this might not be the case for 10 to 15 years but we had to visualise it. Mr Tesh was inclined to agree; the Vietnamese would want to dominate Laos, though they had lost Cambodia, He doubted if they would really constitute an external threat to Thailand, and if they did there would be strong resistance because it would be a clash of cultures. In the long run, however, Mr Tech also thought that a strong Vietnam would oonstituté a political threat to ASEAN Governments.

3 August 1977

Dim

D F Murray