TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 41

CONFIDENTIAL

General Western Interests

DSR 11C

6. Western Governments share our interest in helping the Chinese realise their declared goal of making China a modern industrialised state, through their current moderate and pragmatic policies. There is also a general Western interest in promoting and strengthening China's links with the West, encouraging stability in China, and in helping the Chinese to feel secure enough to concentrate on domestic economic policies without risking foreign adventures. Above all, there is a Western interest in strengthening China's legitimate defence capability to the point where the Soviet Union could not be tempted to think in terms of a pre-emptive strike against China. Against this, Western countries will, in general, be cautious about strengthening China's military capability, bearing in mind Chinese involvement in the Korean War, and the turbulent and occasionally aggressive periods in China's history since the Communist take-over in 1949, eg the threats to Quemoy and Matsu, the attack on India and the clasher with the Soviet Union.

United States' Attitudeg

7. The key factor in any sale of Harrier aircraft to the Chinese will be the reactiong of the United States. The Spey aero engine deal, which was concluded in December 1975 went through outside COCOM, although inside COCOM several countries, including the USA, raised reservations. However, this did not block the sale, as Dr Kissinger had given a private assurance that the American Administration would acquiesce in the sale. There is virtually no chance that a similar understanding could be reached with the present American Administration. The present Administration has not yet publicly formulated its police towards China and defence sales to China, although officials have

while indicated that although the Americans themselves would not sell military equipment to the Chinese, there might not be the same objections to sales at certain levels of technology by third countries. The area which is likely to be vetoed altogether is that which covers equipment and technology which would upset the strategic balance (ie basically nuclear and missile technology).

Marine

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CONFIDENTIAL

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