TNAG-0744-FCO40-948-Relations-between-China-and-Hong-Kong-1978 — Page 69

TEC 121/4

EXPORT CREDITS GIA

DEPART

Aldern tabby Hen Aldermanbety

Telephone 01-600-6099

London, ECS

ILL

Telex

25 October 1 WE

Viddup Esq

!!! Treasury Parliament Str London S1

Chic i

Mr Samuel: Please see x we should comment. encouraging but we must take account of the Gormen Chancellor's comment to the Prime Minister.

i sigu

CREDIT POLICY TOWARDS CHIMA

You will know that interest in bu We are now beginning to see f and it seans desireable that i general approach which we shoul

for cover under our Section 2

aldo.

with CDi ts for con

should new!

In the found

Apart from continuing smell orders, the cupit likely to fall into two categor couplete plants in a variety of (we have two current cases for remain within the scele and y seeing in other markets. In the

20

with e

contacts of this order to be deild with the case of China however we believe we shell L thea under Section 1.

We have consulted our Advisory Council about the are prepared to authorise Section 1 cover for Chin a refreshingly relaxed attitude. They have g civil contracts on cash texas under Section 1 addition they have readily agreed that for credit could be given within a total comitavate limit of in without any restriction on the size of individual contr

waphasised that this limit was considered to be no 10 initial "first approach" to be reviewed when commst dra this figure. Their inclination at present is to go further this figure and as I have said we hope to be able to accommodate "normal" large orders under Section 1 at least until a very big build-up of actual business has taken place. The Council decided to leave the market grading at "B" for the time being, but they have agreed that we should consult them again on this matter (as we expect) the Chinese exort further pressure for a reduction in our premium rates.

The second category of enquiry, is on a scale much longer than m have seen in other markets. As you know China's plan is to in mussive expansion of technologically advanced and product industries between now and 1935. Numerous examples of what the intend to do emerged during the visit of the Secretary of State Trade and during that visit itself the National Coal Board were