TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 37

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CONFIDENTIAL

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Minister was inclined to allow the sale of Harrier aircraft to the Chinese to go ahead if the assessment which he had requested "showed that the Harrier could not be put to significant offensive use by the Chinese against the Soviet Union." (The paper should also refer to the possibility that if a sale to the Chinese were to be authorised, it might be as well if the move did not coincide with a refusal to sell the RB 21 engine to the Russians.)

5. At a meeting in the Cabinet Office, chaired by Sir Clive Rose on 11 April, FCO and MOD officials agreed that the FCO should draft a paper on Harrier, drawing upon the conclusions of the 1976 DOPO (SE) paper and TRED's draft of November 1977. The MOD for their part, would draft a paper on marine gas turbines. Each Department would keep in close touch with the other. It was also agreed that it was premature to draft a full paper on Swingfire, as the possibility of the sale of Swingfire was something which had only been raised by British industry and the Chinese, far from pressing for it were unaware of the proposition. At the Cabinet Office meeting Mr Cortazzi gave to the MOD and Cabinet Office on a purely personal and unofficial basis, copies of the attached drafts. The first of these is a draft paper on Harrier, the second is a draft line for the CDS to take in Peking. We explained that these drafts had not been cleared with anyone at any level within the FCO and would need revision. And it is this task for which I now seek your help, bearing in mind the sentence in Dr Owen's Minute of 11 April where he wrote "I hope we shall feel able to decide to sell Harrier, Swingfire and marine engines to China. must consider the issues carefully, in particular whether we are prepared to go ahead if there is US opposition.

This issue has already taken a long time and we risk the French con- solidating their position.

6.

#1

But we

The draft paper, although based upon previous work, is very much a first draft, and seems to me to need at least the follow- ing additions: some assessment as to what the Chinese might want the Harrier for, some answer to the Frime Minister's question as to whether the Harrier could be put to significant offensive use against the Soviet Union, some evaluation of the reality of the Battle Act being used against the UK, and probably, an expansion of the passage on COCOM. It would be helpful if Departments could address themselves specially to these issues, consulting the MOD as necessary.

7. Mr Norbury in DS11 in MOD will be responsible for initiating work on the MOD paper on marine gas turbines, which is to follow the same general pattern as the draft paper on Harrier. We shall be sent a copy of the paper in draft, but in the meantime, if departments have points which they would like to feed in at the outset to the MOD, they should get in touch with Mr Norbury.

1.

12 April 1978

CONFIDENTIAL

ST. Lutful!

J T Masefield

Far Eastern Department

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