CONFIDENTIAL
PRINCESS MARGARET'S VISIT TO CHINA: 18-27 MAY 1987
BRIEF B (c) CHINA'S EXTERNAL RELATIONS
1. For China to achieve her modernisation goals, she
needs a stable international environment in which to
develop economic and technological exchanges. The
Chinese portray the main threat to world peace as rivalry
between the two superpowers.
They stress their own
independence of both, and purport to see Europe (both
East and West) as a stabilising counterweight.
2. In practice, China has in recent years been a good
deal closer to the United States than to the Soviet
Union.
Sino-US trade is flourishing, and large contracts
in many fields, including defence, have been signed.
China also has 13,000 students in the US though the way
many are extending their period of study abroad worries
some members of the Chinese leadership. The US Secretary
of State, George Shultz, visited China in March 1987.
The discussions were reportedly satisfactory, though
difficulties still remain in the Sino-US relationship.
The perennial thorn is Taiwan, particularly continuing
arms sales. Other difficulties include Chinese concern
at protectionist pressures in the US, especially on
textiles, and US reluctance to transfer advanced
technology in some sectors. China has also been
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