TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 148

CONFIDENTIAL

DSR 11C

SECTION VI:

OPTIONS AND TIMING FOR ARMS SALES AND CIVIE SALES

54. It has been argued in the preceding sections of

this paper that China's likely development in the

remaining years of this century offers both dangers

and opportunities to the West. The balance of advantage

for this country seems clearly to lie in improving political relations with China within the limits imposed

by the very different natures of our two political systems, and in seeking to expand British non-military

exports to China. Our allies would generally agree that a

Western policy on these lines would have long term

benefits for the West in increasing China's ability to

stand up to the Soviet Union and China's interest in

moderating her inclinations to work against Western

interests worldwide.

55. In principle, the same arguments apply to British

military sales to China. The previous two sections of

this paper have, however, identified a number of

constraints on these. Against this background, there

are broadly four options for British policy in relation

to arms sales to the Chinese

(a) to avoid selling those items of defence or

defence related equipment to China which might be

difficult to justify to COCOM, accepting present

COCOM standards and restrictions;

CONFIDENTIAL

(b)

D 107991 400.000 7/76 904-953