£785,000 to £825,000 and we are also proposing, if the Chinese will agree to implement the necessary administrative procudures, to liberalise imports of a type of silk known as tussah. As regards flax it is proposed to increase household items by tonne (new total of 2.5 tonnes) and various items of clothing by 2 tonnes (new total 8 tonnes).
The Chinese did not request quota increases for other items.
13
(a)
(b)
(c)
UK/China Agreements
The UK/China Economic Co-operation Agreement (signed in 1979) expires at the end of 1985 and we have undertaken to give China proposals for a new agreement to take its place.
Under the UK/China Science and Technology Agreement there are regular exchanges of scientific and technical visits.
A UK/China Double Taxation Agreement was signed in July 1984 and comes into force on 23 December 1984.
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A Possible UK/China Joint Commission
Most of China's other major Western trading partners have arrangements for a bilateral "Joint Commission" or similar body, meeting regularly, usually once a year, to review trade. Britain does not have a Joint Commission with China but the possibility of proposing one to the Chinese has been considered from time to time in recent years. The conclusion has always been that although the proposal has political attractions, the benefits in commercial terms would not be sufficient to justify the considerable staff, travel and other costs that would be involved particularly for the Department of Trade and Industry. The Prime Minister is therefore advised not to raise this with the Chinese. We would not expect the Chinese to raise it with her, since they have made clear in the past that they think any initiative in this matter should come from the British side. If the Chinese should, unexpectedly, put this proposal forward we would need to consider our response carefully.
15
Defence Sales
There are various prospects in defence sales including a $30 million defence electronics contract for which RACAL are negotiating, and it would be worth mentioning in a general way our interest in co-operation in this field, but there are no individual projects which the Prime Minister need raise.
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