COPASHFIDENTIALI
RANT PAPER CR DOPO SE
CHINA:
SALE OF MARINE PROPULSION UNITS
INTRODUCTION
1.
Officials have recommended that it should be British policy
to promote arms sales within the limitations of what the British
Government believe to be acceptable in strategic terms, to press
for COCOM agreement to such sales, and to abide by the result.
They have also recommended that Ministers might wish to keep in
reserve the option of going ahead in the case of sales of particularly
high commercial or industrial value to the UK, despite opposition
in COCOM and from our partners, unless the general political or
commercial objections appear to outweigh the advantages of the sale.
Extent of Chinese Interest
2. Our information about Chinese interest in marine propulsion
units stems from a visit to China in October 1977 by a Rolls Royce
team led by Sir Stanley Hooke", This interest was also taken
up by the Chinese Minister of Foreign Trade, Mr Li Chiang, during
his visit to this country in December 1977. |
3. The statement of Chinese requirements given to Rolls Royce
covered the Olympus, Tyne and Spey propulsion units, together witn
gear boxes and controls: and consultancy services on ship instal-
lation and provision of spares. Rolls Royce's estimate of the
total potential contract value, including spares, was £130-£165M.
4. The Chinese have not specified the quantity of ships which
they intend to build but they have indicated to Rolls Royce that
their aim is a significant number of gas turbine warships, in 3
classes and that it would be unlikely that the initial batches of the 3 types would amount to less than 20 ships in total. Rolls
Royce consider that the small (1.000-2,000 tons) and interredlate
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CONDENWAL
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