TNAG-1147-FCO40-1427-UK-policy-towards-South-East-Asia--including-Hong-Kong-1982 — Page 146

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Economic

12. Although it is one of the world's most important sources of raw materials (rubber, tin, hardwood etc), S E Asia is not of

prime significance as an economic partner for either China or the USSR (see attached tables). Within that framework, the USSR is the better market for S E Asian products, whereas China is a far bigger supplier to the S E Asian countries. Aid from both China

and the USSR to the ASEAN countries and Burma remains small. Since

the Cambodian crisis the USSR has become a major donor to Vietnam, the value being estimated at US$ 1,000 million in 1980 and again in 1981 for economic aid and US$ 600 million and US$ 200 million

respectively for military aid.

Conclusion: Prospects for the Future

13.

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Basically the attitude of the S E Asian countries to the USSR and China is one of mistrust. In their efforts to overcome

this feeling and strengthen their influence the Russians and Chinese each have particular obstacles to contend with in the first case the fear of a heavily-armed super-power and in the second historical memories, the effects of geographical proximity and the potential fifth column of the overseas Chinese. Prior to the growth of Soviet sea-power most S E Asians probably thought of the USSR as the lesser, because the more distant, threat. This feeling no longer applies to the same extent, but as a corollary there must be some reassurance that the USSR and China can be played off one against the other.

14. Even if this dispute were to end or at least to be reduced in intensity (since the prospects of a complete Sino-Soviet rapprochement are extremely faint, given the sharp disparity of views concerning Afghanistan and Cambodia) there seems little reason to think that Sino-Soviet rivalry in S E Asia would end. The Soviet Union is unlikely to give up her present naval and military presence in the area, so long as the Americans continue to maintain their bases at Diego Garcia and in the Philippines.

The

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