TNAG-0855-FCO40-1065-Construction-of-underground-railway-system-in-Hong-Kong-1979 — Page 114

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through diplomatic and political channels. This will, however, at best take some time, and all experience suggests that it will produce nothing more than the same bland assurances as previous attempts. We shall, meanwhile, be up against their aggressive credit support and price cutting on actual projects. In these circumstances, we ought to be ready in important cases to match aggression with aggression.

The reasons for this, are, first and most obviously, that our industry is seriously in need of orders in some crucial sectors. But, second, I believe that only if the Japanese see that the manipulation of credit and aggressive pricing can be turned against them will they seriously consider making any real concessions in their general approach.

I would, therefore, see such a policy of matching aggression with aggression and winning as a necessary complement to any wider discussions held with the Japanese.

I would hope, therefore, that, without necessarily committing yourself to agreeing with my general views, you will be ready to accept such action in particular cases where the need arises and where national industrial interests justify it. copying this letter to the recipients of yours.

You

Joh

A J Lippitt

I am

cc K Taylor Ban CB

MG Lephens Eng D N Royce Esq

M D Butler Esq CMG SW Payton Esq CMG

(ROOT) ECGD)

ED/DOT (FCO)

(Bank of England)

1.