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3.
would not be very fast. because the Chinese economy was currently rather poor.
The Secretary of State said that he understood this; economic co-operation would be a long process but we would contribute and help as we could. The British economy was not poor but had immediate difficulties, particularly with the rising price of oil. A recession in the United States seemed increasing ly likely and would affect Britain. These things tended to be cyclical but there were better prospects further ahead to improve business with China.
4. Mr Yang Yong said that China had few experts in the arca of business and foreign trade and looked to Britain for help. The Secretary of State said that Britain would do business honestly and that China could count on the UK for straight dealing. Mr Yang Yong said that he knew that the UK was almost alone in Europe in having substantial oil resources. China also had oil fields but many had not yet been exploited. One field in the south part of the Yellow Sea was being developed with British expertise. Chinese oil production was not yet very high but he looked forward to an increase of 10M tonnes. This was still not enough and China was looking for teclmical help. The Secretary of State said that Britain had large oil and coal deposits but depended heavily on trading which required supplies of energy.
5. The Secretary of State said that he wished to raise one small difficulty over Hong Kong. Mr Yang Yong was well aware of the problems with illegal immigrants to Hong Kong and that the UK had sent reinforcements to the borders. The Goverment of the Chinese Republic would no doubt help to stop the flow of illegal immigrants and he hoped that this problem would soon be resolved so that the reinforcements would not have to stay in Hong Kong \ for long. Mr Yang Yong said first that China had already adopted
measures to prevent illegal emigration. These were mainly economic and had taken effect from the end of June:
he hoped the results would soon be evident. Second the Chinese economy was still re-adjusting and there were problems of priority between economic and foreign policy. The Secretary of State said that he hoped the problem would be resolved quickly. Chinese help would be greatly appreciated.
6. The meeting ended at: 1150.
Goldeneye
Secretary of State's office
4070
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