TNAG-1464-FCO40-1991-Visits-by-Chinese-officials-to-the-UK--including-visit-by-Hu-1986 — Page 48

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referred to the size of United States investment in China

which had now reached some $2.1 billion, making it the second largest foreign investor after Hong Kong.

Southern Africa

The Prime Minister said that she was concerned about the

situation in Southern Africa. Apartheid must be ended. But we did not want South Africa to fall under Soviet influence, given its strategic importance and new monopoly of vital raw materials. We wanted to see peaceful negotiations between all

racial groups.

Hu Yaobang said that if the United States and

Europe acted more decisively to bring about an end to apartheid, there would be no danger of South Africa falling into the hands of the Soviet Union. He wondered whether

Bishop Tutu could not be given a greater role in bringing

about negotiations. The Prime Minister said that there were many different leaders who had to be involved. We would continue to work for a negotiated solution, although it was not proving easy to persuade President Botha of the need for

this.

United Kingdom China Economic Relations

Li Peng welcomed the decision to grant China some £300 million of development loans. These had already been

earmarked for a number of projects, including two nuclear power stations and an optical fibre plant. He was aware of the Prime Minister's hope that part of the loan would be used to purchase ships from Sunderland. He shared the Prime Minister's interest in this.

Li Peng continued that there had been a great development in economic relations over the past few years with which China was satisfied. These relations should be expanded further. But this would require Britain to import more goods from China as well as provide more development loans and set up more joint ventures. The Prime Minister said that Zhao Ziyang had stressed the importance of development loans during his visit

CONFIDENTIAL