TNAG-1256-FCO40-1589-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 7

AFIDENTIAL

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Asia

6.

The Japanese presented a rather optimistic picture of the Chinese internal situation. They thought the current Chinese leadership entrenched and stable and the Government's policies popular, though much would rest on the success or otherwise of their economic policies. China would need a great deal of economic assistance from other countries over the next few years. The Australians, in particular, found this analysis excessively optimistic, even complacent, and pointed to the country's history of instability and to the pressures building up in Chinese society. But the Japanese remained confident that there could be "no turning back to the chaos of the Cultural Revolution period". (Mr Wilson commented that the Japanese appeared to tell all their foreign guests how confident they were about China's future, although they held much more cautious views about other countries with a similar potential for instability; he suspected this was in--reality an attempt to dissuade the West from any thoughts of disengagement from China. If this happened, the Japanese, as the ones in deepest, would be rather exposed).

7. The New Zealanders covered Sino-US relations to some depth in their talks. The Japanese emphasised, perhaps rather too strongly, that they were not concerned about exchanges of military technology between China and the US. The Chinese were interested only in defensive technology. Nakajima came up with the rather odd formulation that the Chinese were making a "pre-emptive bid in relation to Japan's efforts to improve her defence capability".

8. On Korea, all expressed concern about the ROK Government reaction to the Rangoon bombing. The Australians thought that one facet of the ROK reaction might be an increase in internal repression and a clamping down on dissident activities. The Japanese believed that despite the Rangoon incident, the ROK would in time resume her diplomatic offensive, since its results in general had been encouraging. With the IPU meeting, the Asian Games and the Olympics, the ROK had moved ahead of North Korea. The Japanese also thought the ROK had the resourcès to replace those lost in Rangoon with capable men. As for the North Koreans, the consensus was that the restraints preventing them from taking any action against the South were far stronger than the arguments in favour.

CONFIDENTIAL

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