8. Shanghai was our last stop.
Our time there was heavily curtailed by
the cancellation of our flight from Chengdu : CAAC do not have a high
reputation. But even a few hours was enough to convey a clear impression of
a dynamic and rapidly developing city. Shanghai is starting to put in place
the first of the building blocks that have helped other Asian cities to
expand rapidly, eg modern hotels and better infrastructure. There witt- be
several big projects in addition to the metro) in Shanghai in the next few
years and it would be a pity to miss out on these. Pilkingtons have led the
way with their glass factory, a joint venture established without a penny of
British taxpayers' money. It is a most impressive operation. We should aim?
o get a commercial foot in the door as Shanghai begins to take some of its
environmental problems seriously. I am sure that our excellent Consulate
there will keep us in touch with all the possibilities.
•
First, no one mentioned the word
9. I have three general observations.
Socialism to me once. I am all too inexpert but it seems to me that China
is set pretty firmly on the road to greater economic freedom, though the
pace may vary from time to time for understandable reasons (eg the present
concern about the effect of price reform on inflation, especially in the
cities). Second, I have been nowhere else where the disjuncture between the
size of our aid programme and the pursuit of the national interest is so
marked. It is enough to make strong men weep. With a market set to grow
towards 300 billion dollars by the turn of the century, with the immense
goodwill towards Britain that is manifested at every level, with your credit
and the Prime Minister's so immensely high (is Vice-Premier Wu a life
Vice President of the East Surrey Conservative Association?), we should be
running a programme on the same sort of scale as our operation in India. We
cannot just find the money elsewhere; we are stretched pretty threadbare as
it is. You know and I know that one day we need a lot more cash. Mind,
British businessmen are not exactly demonstrating East India Company
entrepreneurialism in China at the moment. At best, there seems to be a
feeling that China can be "done" from Hong Kong; at worst, there is total
inertia (where exactly is China?"). This lack of interest is not shared by
the Italians; or the French; or the Japanese. We have just, for example,
declined to respond to Chinese entreaties to get involved in the development
of the chemical industry. The lobby of the Great Wall Sheraton was full of
CONFIDENTIAL
/svelte Italians
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