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countries. It would be useful to see the exhibitions that Mr Cortazzi had mentioned. Did Mr Cortazzi have any other sugges- tions of equipment that might be worth looking at? Mr Cortazzi explained that if, after seeing any particular piece of equipment that interested them in an exhibition he was confident that it would be possible for demonstrations to be arranged. Mr Sung asked what sort of exhibitions the Chinese were being invited to attend. Mr Cortazzi said that there would be an exhibition of British Army equipment In June, the Farnborough Air Show in September and a Naval exhibition some time next year. Speaking again on Britain's inter- national obligations in this field he stressed that the UK did not accept that any other governments had a unilateral veto on arms sales. On the other hand we did not wish to enter into sensitive discussions only to find that there was no serious Chinese interest. He thought the best channel for further discussions on this subject to take place would be between the Chinese experts and the firms concerned in Britain. On the Harrier for example the Chinese might wish to talk to Hawker Siddeley which is now part of British Aerospace. Lir Sung said that the Harrier was certainly a chicken and egg question. Some leading members of the Chinese Government had shown an interest in the purchase of Harrier but no detailed study of the question had taken place because the Chinese had wished to discover beforehand whether the UK Government was prepared to sell. However he fully understood Mr Cortazzi's argument and he would make a full report of what had been told to his Government, including the Ministry of National Defence. He was not sure that it would be possible to get a reply before the departure of the Chief of Defence Staff but he could assure lir Cortazzi that serious consideration should be given.
ROLLS ROYCE
7. Referring to his earlier remarks about Rolls Royce and their pricing policy Mr Sung said that he had always had very good personal relations with Rolls Royce including the President and Vice President of the company. Their complaint was merely that the commercial department were trying to strike far too hard a bargain. He hoped that lir Cortazzi would be. able to convey the message to Rolls Royce without spoiling an excellent relationship. Mr Cortazzi and Mr Davies had earlier pointed out the services provided by Rolls Royce and the extent of their R & D expenditure. They did not accept that Rolls Royce pricing policy was unhappy.
BI-LATERAL AGREEMENTS
8. Mr Cortazzi said that the second point that he wished to raise with Mr Sung was that of bi-lateral agreements between the two countries. Such agreements were no substitute for good relations which anyway existed between Britain and China but they could some- times be a useful framework for exchanges in certain fields. He thought there might be a possibility for useful agreements in the cultural field and in science and technology. Referring to the draft Civil Aviation Agreement he said that there had been problems
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