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9. Mr Sonoda said that he agreed with the need to develop a wider spectrum of bilateral relations. Japan was serious about encouraging the out-flow of capital and investment abroad. He was glad to hear about the Rank/Toshiba talks, though he still remembered the failure of the Hitachi TV affair. He understood Dr Owen's views about increasing Japanese aid to Africa. He hoped to go there after October, and would like to be in touch with Dr Owen beforehand. The Japanese were already developing bilateral economic co-operation with the Zambians, and he would give careful consideration to Dr Owen's suggestions. As for Rhodesia, the Japanese would continue to observe independence negotiations very closely, and would consider prospects for economic co-operation. As for the doubling of Japanese aid, whichever way it was done, the Japanese were determined to increase their aid substantially.
10. Mr Sonoda said that British exports to Japan had increased in the first half of this year. He hoped this tendency would continue. The Japanese were continuing their efforts to reduce both tariffs and non-tariff barriers. They also hoped that British businessmen would increase their efforts, especially in advertising. In the past, it had not been necessary to advertise British goods because of their superior quality.
11. Dr Owen said that the Hitachi decision had been illogical, and based on strong feelings shared by both unions and manufacturers at the time. Our attitude should not be judged by that case.
On Africa, he would like to stress the advantages of making a special effort for Zambia. This would stand the Japanese in good stead with all 49 African countries. It would be wrong to give too much priority to Zaire, though equally something must be done there too. Britain would be reluctant to do anything major until we had assurances that any money given would go to the people. In South Africa, we unfortunately had extensive investments, and had the impression that the Japanese were building up investments there too, (Mr Miyazaki denied this). Dr Owen invited Japan to accede voluntarily to the Code of Conduct produced by the EEC, even if Japanese investment was still very small.
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Mr Sonoda thanked Dr Owen for his advice. South Africa was a rich country, which interested Japanese industrialists. But the Japanese Government were watching discussions at the UN about South Africa very carefully.
13. Dr Owen said that Britain was also anxious to improve her relations with China. In particular, we had to consider whether or not to sell her arms. So far, no decision had been taken, but we were looking at the issue seriously: hence the visit of the CDS earlier this year.
We were prepared to ruffle the Russians' feathers a little if necessary, especially after recent events. If our relations were better, we might pay more attention to any representations by the Russians. Dr Owen asked how Mr Sonoda saw relations between China and Europe.
/14. Mr Sonoda
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