TNAG-0741-FCO40-945-Relations-between-China-and-Hong-Kong-1978 — Page 43

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CONFIDENTIAL

Contr7

DSR 11C

b) Threats to resort to the Battle Act (United States

Mutual Defense Contract Act of 1951). This stipulates the termination of military, economic

fails to or financial assistance to any Nation that s embargo designated strategic weapons to the Sino- Soviet Block.

c)

d)

e)

Political pressure not to upset the strategic

balance to the detriment both of America's Super- Power relationship with the Soviet Union and at the possible expense of América's allies in

North East Asia.

Commercial and political retxikia pressure in the form of retaliation against Rolls Royce and British Aerospace, either preventing sales in the United States or preventing arrangements

for collaboration.

Arguments that whatever the Administration's own preferences, Congress would be bound to react adversely to the sale of Harrier.

Reactions of Other Countries

The USSR

10. The Russians have already made it clear, through their Ambassador in London, that they would react vocally to the sale of Harrier to the Chinese. They might also seek to show displeasure by commercial or political retaliation. It is difficult to assess what damage might be caused to Anglo-Soviet trade, but it would probably not be long lasting and would not measure up to the £500 million which the sale of 200 Harriers would earn.

In the political field the Russians might seek to postpone or perhaps even cancel a Ministerial visit to back their propaganda campaign against the UK. In practice, the Soviet Union's superiority over China is so overwhelming that China's possession of Harriers would make little

difference.

South Korea

11.

CONFIDENTIAL

Harrier is an ideal tactical weapon for use in the Korean Peninsula and the South Koreans would react strongly

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