TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 136

DSR 1C

CONFIDENTIAL

41. The more difficult question is whether, and if so

how far, the West should be less restrictive about the

sale of military equipment or technology (or civil

technology with, military implications) to China than to

the Soviet Union. In favour of a less restrictive policy

it can be argued that an increase in the military power

of China would be helpful to the West since it would lead

to an increase in the Soviet defence effort directed

against China. The resources needed for this increase

would, judging from recent years, probably be at the expense of Soviet consumer spending or civil investment and would not diminish the strength of Soviet forces in

Eastern Europe or slow down their rate of build-up. certainly, however, the relative importance of China in Soviet defence decision-making would increase, to the

benefit of the West. In less abstract terms, military

pressure on the Soviet Union would increase, and more Soviet forces would be tied down in Asia. A stronger China

would be a more effective balance to Soviet attempts to

expand their influence in the world.

Almost

From the British

point of view, increased military sales to China would

benefit British industry and employment. The consequent improvement in Anglo-Chinese political relations would

also be helpful over Hong Kong.

42. The main arguments against a more relaxed British

attitude to arms sales to China are

(a) that our allies would object;

(b) that it would provoke an unfavourable reaction

from the Soviet Union;

/(c)

CONFIDENTIAL

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