TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 31

CONFIDENTIAL

have not yet been arranged.

14.

蠢

CDS' visit provides an opportunity to further encourage Chinese interest

in marine propulsion units. The Chinese could be encouraged to pursue their

discussion with Rolls Royco and to let the firm have a comprehensive statement

of their requirements.

Conclusions

(a) From the UK point of view there would be no overriding strategic or

security objections to the deal.

(b) There are good commercial and industrial arguments in its favour.

(c) It could be generally helpful to Western relations, as well as British

relations with China.

(d) The key factor will be the American reaction and the effect on the USA of strong crivicism from the Soviet Union, Taivaŭ and perhaps to a lesser extent,

South Korea and Jupan.

e) There would be major problems in COCOM, and an attempt to ride roughshod over the committee in the case of Harrier could gravely damage the organisation

and our relations with the United States.

Recommendation

CDS should say that HMG would welcome the further discussion between the Chinese and Rolls Royce on marine propulsion units in order to identify Chinese

requirements more closely,

COMPELENKAT