TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 29

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(4,000 tons) ships are well suited by Olympus and Tyne machinery and that to match

Chinese wishes the larger ships (7-8,000 tons) could be fitted with all Spey

or all Olympus or combined Spey and Clympus.

Comercial and Domestic Implications

5. The initial sale would itself represent a substantial contract for Rolls Royce

and the firm have said that this could lead to further significant business

for follow-on ships.

Moreover that the sale of marine turbines to the Chinese

would put Rolls Royce in a very good position for sales in connection with oil,

Rolls Royce have expressed the view that the potential

gas and power generation.

in these markets must be vast.

Strategic and Security Implications

6. In themselves, marine propulsion units are evidently not war-like stores.

They are thus at one remove from the provision of military equipment. The use

to which they are put will depend on the role of the warships for which they are

intended, and we have no precise information on what this might be. A modern

and effective Chinese Fleet could represent a threat in the area and could be

seen as being particularly directed against Taiwan. Moreover if they are not

· supplied from the UK,alternative propulsion units would be available from other

sources. Withholding of all marine propulsion units would do no more than delay

the development of China's maritime capability.

? The security implicatione of the sale of Rolls Royce marine propulsion units

to China have been and will continue to be the subject of close consultation

between the Ministry of Defence and the firm, and some important provisos in

this connection have already been established. From a UK point of view and

leaving aside possible COCOM objections, there seems however, no reason why the

security aspects of

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