TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 134

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DSR 11C

and advanced civil technology with military applications

38. A significant expansion of civil exports to China

countries.

would have no repercussions for British exports in third

Defence sales could, however, incur negative

reactions, notably in the Soviet Union and perhaps the

and India

United States The Spey deal does not appear to have

harmed either Rolls Royce's or general British exports

in the Soviet Union. The Russians normally hard-headedly

seek the best product for their purpose on the best

But political considerations are not to be

terms.

excluded.

No rules can be laid down in advance except

to say that, in the first instance, the firm must judge

its own commercial advantage. If wider British commercial

interests looked like being involved, however, the

Government would need to intervene.

39. British firms involved in sales of defence

technology to China might also in certain circumstances

incur difficulties with US customers or component

suppliers. This would generally apply only in cases

which were subject to serious difficulties in a COCCM

context. Much would depend on the attitude of the US

Administration. In general, the individual British

firms concerned should be as well placed as anybody to

weigh the balance of their own commercial advantage, but

experience shows that this is not always the case, and

the final decision might have to be taken by the British

Government.

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