CONFIDENTIAL
DSR 11C
decline in the next 10-20 years, enabling imports of
Western advanced technology, vital to her modernisation
goals, to be increased. Imports of non-ferrous metals
such as aluminium and copper are expected to continue,
because of the high cost of exploiting China's own
reserves. Even though the economy is comparatively
backward, given that China's GNP is nearly half that of
Japan even small quantities of trade can amount to large
totals. For example, in 1977 China's imports of grain
were over seven million tons. In certain sectors and at
certain times China's imports can, therefore, be of
considerable significance even to major industrialised
countries trading with her. In the future, China herself
could become a significant exporter of light industrial
goods.
External Political Relations
(a) General
5. China is the second most important communist power,
since 1963 openly at loggerheads with the Soviet Union.
non- Sorrit
A
She provides a radical model for the developing world,
not least in the UN and its subsidiary bodies. . She
shares disputed boundaries with the second and third
most populous nations in the world, India and the Soviet
Union. She is a close neighbour of the world's third
economic power, Japan, and is of great importance to the
policies of the United States, both because of the latter's
defence commitments to some of China's neighbours and
/also
CONFIDENTIAL.
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