communications) and on the modernisation of industry, agriculture and defence. These are therefore the areas offering best prospects for increasing UK exports. The search for offshore oil, in which BP and other UK oil companies are taking a leading part, offers opportunities for the UK offshore supply industry.
Economic reforms announced in October 1984 aim at re-invigorating China's urban economy by reducing the extent to which the State attempts to control the economy in detail and by allowing market forces to operate to a greater extent within the framework of the overall economic plan. In international trade, China aims to continue to promote exports while confining imports to essential items of plant and machinery not produced in China. Efforts are being made to attract foreign investment into joint ventures in China and to acquire foreign technology through licensing agreements. Fourteen coastal cities were recently identified as priority centres for foreign investment, but inland areas, and the four coastal 'special economic zones' in South China remain eager to attract foreign capital and know-how. Chinese leaders frequently emphasise China's commitment to maintaining what China calls the 'open door' policy of encouraging contacts with the West. China's foreign exchange reserves have increased very rapidly in the past two years and have been reported to exceed $20 billion.
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UK-China Trade Prospects
Despite her healthy foreign exchange position China retains a cautious attitude to borrowing at commercial rates, and in the long term the constraints on the rate of growth of China's exports will limit her ability to finance a rapid growth of imports. China is a difficult and expensive market for the businessman (a point of which it would be useful to remind the Chinese if the opportunity arises). For example it is prohibitively expensive for all but the largest companies to have an office in China and hotel accommodation for the visitor is scarce.
There is room for improvement in the British share of the Chinese market but, for most UK companies, other export markets are likely to prove more rewarding than China.
Trade Related Visits to and From China
Mr Alick Buchanan Smith (Minister of State for Energy) visited China in early December for talks about energy related trade and to attend a British offshore oil seminar (see below). Recent visitors from China have included the Governors of Sichuan and Guangdong Provinces and the President of China International Economic Consultants, Mr Jing Shuping. The last two named had meetings with the Prime Minister. The Chinese Minister of
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