TNAG-1147-FCO40-1427-UK-policy-towards-South-East-Asia--including-Hong-Kong-1982 — Page 67

CONFIDENTIAL

- 5-

reduced her support for the insurgent communist parties in Burma, Thailand, Malaysia and the Philippines, the parties remain largely Peking orientated (some members of the Philippines and

Malaysian communist movements look to Moscow and some of the Thais to Hanoi). This is a continued cause of mistrust of China in

the minds of S E Asian leaders.

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 SE 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.

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.

CONFIDENTIAL

/ 14.