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CONFIDENTIAL
ON AEROSPACE, THE PRIME MINISTER WELCOMED THE NEWS OF THE SIGNATURE OF A MEMORANDUM OF UNDERSTANDING UNDER WHICH CHINA INTENDS TO BUY FIVE AIRBUS 310. IT WAS ALSO WELCOME THAT A MEMORANDUM OF UNDERSTANDING HAD BEEN SIGNED FOR FIFTEEN 36-SEATER SHORT BROTHERS AIRCRAFT. THE PRIME MINISTER SPOKE STRONGLY IN SUPPORT OF CHINA BUYING THE BAC 146: THE EMBASSY HAS REPORTED THIS DISCUSSION ALSO SEPARATELY.
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ZHAO THANKED THE PRIME MINISTER FOR HER POSITINE OBSERVATIONS ON POLITICAL AND ECONOMIC BILATERAL RELATIONS. CHINA HAD ALWAYS ATTACHED IMPORTANCE TO COOPERATION IN THE TECHNOLOGICAL AND ECONOMIC FIELD. IN RECENT YEARS A NUMBER OF SINO-BRITISH AGREEMENTS HAD BEEN SIGNED WHICH HAD OPENED UP NEW VISTAS FOR DEVELOPMENT OF THESE RELATIONS. CHINA HAD A NUMBER OF TIMES EXPRESSED THE HOPE THAT THE PERCENTAGE OF HER FOREIGN TRADE OCCUPIED BY WESTERN EUROPE WOULD INCREASE. NOW A SATISFACTORY AGREEMENT ON HONG KONG HAD USHERED IN A NEW ERA FOR FRIENDLY SINO-BRITISH COOPERATION. ONE ASPECT OF THIS SHOULD BE AN INCREASE IN ECONOMIC AND TECHNOLOGICAL INTERCHANGE. IT WAS CHINA'S POLICY TO INCREASE TRADE WITH BRITAIN, BUT IT WAS FOR BRITAIN TO ENHANCE THE COMPETITIVENESS OF HER PRODUCTS. CHINA TOOK CONSIDERATIONS OF QUALITY, PRICE AND TRANSFER OF TECHNOLOGY TERMS INTO ACCOUNT IN DECIDING ON WHICH PRODUCTS SHE SHOULD BUY. SHE DID NOT CONSIDER PRICE ALONE. THE ATTITUDE OF WESTERN EUROPEAN COUNTRIES, INCLUDING BRITAIN, TO TRANSFER OF TECHNOLOGY WAS MORE LIBERAL THAN THAT ADOPTED BY THE US AND JAPAN. ZHAO AGREED THAT AREAS FOR SINO-BRITISH ECONOMIC COOPERATION INCLUDED OFF SHORE OIL, WHERE BRITISH COMPANIES HAD MUCH EXPERTISE, COAL, WHERE NOT ONLY BRITISH EQUIPMENT BUT ALSO BRITISH DESIGN AND MANAGEMENT TECHNIQUES WERE ADVANCED (ZHAO MENTIONED THAT HE HAD BEEN VERY IMPRESSED WITH BRITISH DESIGN FOR THE JINING NO 2 COAL PROJECT IN SHANGDONG), ENERGY SAVING EQUIPMENT AND AIRCRAFT.
CONFIDENTIAL
/ (D) CULTURE
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