TNAG-1343-FCO40-1773-Visit-by-Margaret-Thatcher--UK-Prime-Minister--to-Beijing-fo-1984 — Page 105

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for 10 aircraft, total contract price approximately $180 million. The 146 is an 82 - seat feeder liner. Airbus. initial order by the Chinese for 3 A310 Airbus aircraft is being discussed, as is the possibility of co-operation with China in the manufacture of components for the A320. M. Mitterand and Mr Kohl have supported this product on their visits to Peking.

Thermal power stations. The UK's strength in this area is illustrated by the successful operation of British equipment in the Castle Peak power stations in Hong Kong and in many other places world wide. There should be good prospects for co-operation with China in this sector since coal-fired power generation will play a major part in China's energy plans.

Discussions are under way about many other projects including aluminium smelters, road, railway and airport developments, defence projects and others. A note on some

of the most important of these is attached (Annex 3).

Float glass. Pilkingtons have asked that the Prime Minister should if possible express support for their joint venture with China to build a float glass factory in Shanghai. They want to ensure that procurement for this is included in the 1985 plan. Otherwise materials will be late and the whole project (very important to China and Britain) could be set back.

Rolls Royce are discussing a major contract for electricity generating sets and a joint venture for the manufacture of industrial and marine engines, based on the Spey Factory already established at Xi An.

There are a range of opportunities in telecommunications. Cable and Wireless are already co-operating successfully in telecommunications services in South China. The Prime Minister attended the signature of one of their Joint Venture agreements.

8

COCOM

Exports to China of certain strategically sensitive goods and technologies are subject to control by COCOM countries (NATO, less Iceland and Spain, plus Japan). China has been on the list of proscribed destinations since COCOM was founded. Currently the controls are applied more flexibly to China than before, and the UK is ready and willing to sell a wide range of sophisticated equipment including defence equipment to assist in the modernisation of Chinese industry and armed forces. The list of countries to which COCOM's controls apply and the details of such

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