TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 137

DSR HC

CONFIDENTIAL

(c) that it would help China to supply increased

military aid to and achieve far greater economic

penetration of the Third World;

(a) that it would enable China to provide more

effective military assistance to smaller communist

powers in the region;

(e) that it would increase China's military threat

to her neighbours.

These arguments may be examined in turn:

(a) An unfavourable reaction from some of our allies

would be the result of a different perception of

China's objectives and capabilities in the world.

We might be able to make some progress by arguing

the merits of engaging China's interests more closely

with those of the West. To the extent that we could

not persuade allies to drop their disagreement, we

would have to take account of their probable reactions.

These are described in Section V.

(b) The Russians have already complained about rumours of sales of Harrier jump jets to the Chinese, and would undoubtedly complain about the sale of any complete weapons systems. Military sales of this kind would probably not have any immediate, serious effect on East-West relations as a whole, including US-Soviet

relations or arms control negotiations like SALT, given the USSR's own economic as well as strategic

interest in the détente process. Soviet sensitivity

to developments in Sino-Western relations which led

/to

CONFIDENTIAL

D 107991 400,000 7/76 904 953