TNAG-1256-FCO40-1589-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 196

4. BILATERAL MILITARY EXCHANGES

IT WAS AGREED THAT BOTH SIDES WOULD WORK TO ESTABLISH A LONG TERM PROGRAMME OF MILITARY EXCHANGES BEGINNING IN 1984. AS YET THERE WAS NO AGREEMENT ON SPECIFICS, BUT. THIS WOULD PROBABLY

TAIL THE SENDING OF OBSERVERS TO EACH OTHERS MILITARY EXERCISES, EXCHANGES ON MILITARY DOCTRINE, COMMUNICATIONS AND MEDICINE. ON ARMS PURCHASES, THE CHINESE HAD ASKED FIRST FOR A LIST OF WHAT THE US WOULD BE PREPARED TO SELL. THE AMERICANS HAD EXPLAINED THAT WEAPONS SALES, AS DISTINCT FROM TRANSFERS OF TECHNOLOGY, CAME UNDER THE U.S. MUNITIONS CONTROL ACT RATHER THAN THE EXPORT AND ADMINISTRATION ACT, AND COULD ONLY BE APPROVED ON A CASE BY CASE BASIS. THEY HAD OFFERED INSTEAD TO PREPARE A LIST OF CATEGORIES WHICH THE US WOULD CONSIDER POSITIVELY, INCLUDING ANTI-TANK WEAPONS, ANTI-AIRCRAFT WEAPONS, RADAR, ECM EQUIPMENT, COMPUTER AIDED DESIGN EQUIPMENT AND MILITARY COMMUNICATIONS. THE CHINESE HAD PRESSED FOR AN AGREEMENT ON THESE LINES WHICH WE INBERGER WAS NOT EMPOWERED TO SIGN. THERE WAS SOME DISCUSSION OF EXCHANGING AN AGREED RECORD ON THIS POINT BUT IT WAS NOT CARRIED THROUGH. THE US SIDE HAD THEN CONFIRMED THAT THEY HAD FOUND A NUMBER OF ITEMS IN THE LIST GIVEN TO THEM IN PREPARATION FOR LIU HUAQING'S CANCELLED VISIT IN 1981, A NUMBER OF ITEMS WHICH THEY COULD APPROVE, INCLUDING TOW ANTI-TANK MISSILES AND AIRBORNE ANTI-TANK MISSILES WITH HELICOPTERS. THE CHINESE CONFIRMED THAT THESE REMAINED ITEMS OF INTEREST TO THEM, BUT WERE MORE INTERESTED IN BUYING THE TECHNOLOGY TO BUILD THEM THEMSELVES THAN BUYING THE FINISHED ARTICLE. THIS SEEMS THEREFORE TO HAVE BEEN AN INCONCLUSIVE EXCHANGE, EXCEPT THAT ON THE ITEMS WHICH THE US SAID IT COULD SUPPLY, IT HAS CLEARED THE WAY FOR THE CHINESE TO PURSUE CONTRACTS DIRECTLY WITH THE MANUFACTURERS.

5. TECHNOLOGY TRANSFER

WEINBERGER SPENT SOME TIME EXPLAINING THE NEW US GUIDELINES TO THE CHINESE. THESE HAVE STILL NOT BEEN PUBLISHED, PENDING AN EXCHANGE OF LETTERS BETWEEN THE CHINESE AND THE US GOVERNMENTS (MY T/L UNDER REFERENCE) COVERING THE NON-TRANSFER OF US- SUPPLIED TECHNOLOGY TO THIRD PARTIES. THE CHINESE HAD GIVEN WE INBERGER ORAL ASSURANCES ON THE NON-TRANSFER POINT, BUT NOT YET WRITTEN ONES. THERE WAS NO FURTHER DISCUSSION DURING WEINBER- GER'S VISIT OF THE CHINESE SALE OF SILICON TO THE SOVIET UNION, (WHICH ANDERSON TENDED TO INTERPRET AS THE SORT OF DEAL WHICH THE CHINESE LEADERSHIP WOULD NOT THEMSELVES APPROVE IF THEY HAD AN ADEQUATE EXPORT CONTROL SYSTEM.) WHILE MAINTAINING THE LINE THAT CHINESE EXPORTS OF INDIGENOUS PRODUCTS WERE DISTINCT FROM THE QUESTION OF RETRANSFER OF US APPLIED TECHNOLOGY, ANDERSON CONFIRMED THAT THEY HAD UNDERLINED THEIR CONCERN TO THE CHINESE