last year.
· 3 ·
This month a Chinese team attended, at Chinese initiative, a symposium on small warships and fast patrol boats organised by the Royal Institute of Naval Architects. Otherwise Chinese interest is normally expressed through the channel of the appropriate British commercial firm. Before the Government can judge whether to support a given sale and to begin the process of consulting our Allies through the COCOM machinery, it is necessary to have a fairly clear idea of the Chinese requirements. This often produces a difficulty in that the Chinese are reluctant for reasons of 'face' to make a formal approach unless they have a guarantee that HMG will support the deal. In practice there may be a prolonged period in which the commercial firm conducts exploratory discussions with the Chinese making it clear that there is no commitment by HMG to approve supply.
7. The most imminent deal involves Rolls Royce marine
turbines for naval vessels. A Chinese team is due to visit
Rolls Royce in the near future for exploratory discussions. Shortly before this visit takes place we propose to inform the Americans in low key, at the same time promising to get in touch with them again when the Chinese requirements are
clearer. One reference to the Chinese interested in marine
gas turbines has appeared in the British Press, but we do
not wish to publicise it. A defensive form of words is provided separately.
8. There was recent Press speculation that Britain was preparing.to sell warships to China. This report was
erroneous. It arose from remarks reported to have been made by a representative of the British Marine Equipment Council during a Far East sales trip. The representative has denied making the remarks attributed to him.
9. The case around which most speculation has centred, is the Harrier. A note has been provided for defensive use on this point if necessary. The Government's public position, that it is awaiting a formal indication of the Chinese requirements, is still strictly true, in spite of the recently renewed expressions of Chinese interest; and is the only practicable position to adopt since it is clear
CONFIDENTTAL
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