TNAG-1302-FCO40-1658-Visits-by-Richard-Luce--Minister-of-State-for-Foreign-and-Co-1984 — Page 11

CONFIDENTIAL

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with Taiwan. This had,

between the US and China.

Japan's approach to Taiwan was the correct one and should con-

tinue in the future. From time to time, the question of Taiwan had cropped up in bilateral exchanges between Peking

and Tokyo but on each occasion the problem had been success-

fully resolved.

on occasion, caused serious conflict

He was therefore convinced that

6. Mr Luce said that Britain attached great importance to

Japan's relations with China and believed that the progress

that had been made benefitted the international community.

He wished to ask about Japanese views on Deng's successor.

Deng, although healthy, had reached the age of 80. Did the

Japanese believe that the succession process would be untroubled?

Second; on the Chinese economy, China's stated aspiration was

to achieve the same standard of living as Hong Kong by the end

of the century. He personally doubted if this was feasible

but noted the Japanese view that China would continue to pursue

her open door policy. With the Hong Kong agreement and the

development of special economic zones, China appeared to be diverging from the rest of the Communist world. Did the Japanese perceive a growing trend towards capitalism in China? Third, on Taiwan, how did the Japanese expect Taiwan to see

the implications of the Hong Kong agreement? How would it affect

their attitude towards mainland China? Finally, how did the

Chinese themselves perceive their relations with Japan? Did

they see these largely in economic terms or also in terms of

achieving some sort of balance with the Soviet Union?

7. Mr Matsunaga said that the Japanese view was that the succession process in China had already begun. The older genera-

tion were starting to move out and preparations were under way

for a smooth handover. Present indications were that the next

centre of authority would be Hu and that Zhao would cooperate

with him. They expected the transition to be smooth.

8. On the special economic zones, these were an ambitious

project for the Chinese and he did not know whether the idea

would ultimately be successful. This would partly depend on

CONFIDENTIAL

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