CONFIDENTIAL
133041
MDHIAN 8202
CREDITS WHICH THE SOVIET SYSTEM COULD NOT ABSORB.
WOULD JAPAN
AGREE THAT THE WAY FORWARD SHOULD BE THROUGH AN INTERNATIONAL ANALYSIS OF THE SOVIET ECONOMY LEADING TO POSSIBLE LATER DECISIONS ON HOW TO HELP? IF SO, IT WAS UNCLEAR HOW THE ANALYSIS WHICH WAS TO BE UNDERTAKEN BY THE EC COMMISSION COULD BE BROADENED TO INCLUDE OTHER INTERNATIONAL ORGANISATIONS SUCH AS THE EBRD. NAKAYAMA AGREED THAT SUCH ANALYSIS WAS IMPORTANT: HE THOUGHT THAT THE OECD SHOULD BE INVOLVED.
CHINA
6. NAKAYAMA SAID THAT JAPAN HAD BEEN PRESSING CHINA FOR
GREATER REFORM AND OPENNESS AND FOR AN IMPROVEMENT IN ITS RELATIONS WITH THE WEST. TO ISOLATE CHINA WOULD HAVE A BAD EFFECT, NOT ONLY ON THAT COUNTRY BUT ON ASIA AND THE PACIFIC AS A WHOLE. NEVERTHELESS, JAPAN HAD RESPECTED THE JOINT POSITION OF THE G7 COUNTRIES AND HAD SUSPENDED THE THIRD YEN LOAN. HOWEVER, CHINA WAS MAKING EFFORTS, INCLUDING TO IMPROVE ITS RELATIONS WITH THE US.
CHINA HAD SAID THAT IT WOULD RECOMMENCE PARTICIPATION IN
THE FULBRIGHT SCHOLARSHIP SCHEME AND WOULD ALLOW THE PEACE CORPS TO RETURN TO CHINA IN THE AUTUMN. FANG LIZHI HAD BEEN RELEASED.
A SUBSTANTIAL NUMBER OF DETAINEES HAD ALSO BEEN. FREED. ACCORDINGLY, WE TOO SHOULD TAKE SOME STEPS FORWARD. WHEN THE TIME WAS RIGHT,
JAPAN WOULD LIKE TO RESUME THE THIRD YEN LOAN.
7. THE SECRETARY OF STATE AGREED. WE HAD A SPECIAL
INTEREST IN RELATIONS WITH CHINA BECAUSE OF HONG KONG.
THERE WERE INDEED SOME IMPROVEMENTS, ALTHOUGH WE DID NOT THINK THAT THE CHANGES WERE DECISIVE OR IRREVERSIBLE. NEVERTHELESS, WE BELIEVED THAT WE SHOULD INCREASE OUR CONTACTS WITH CHINA, NOT LEAST TO HELP THOSE IN CHINA WHO FAVOURED REFORM.
HONG KONG
8. THE SECRETARY OF STATE THANKED NAKAYAMA FOR JAPAN'S
POSITIVE INTEREST IN HONG KONG. THERE WERE A NUMBER OF MAJOR PROJECTS IN THE OFFING, NOTABLY PADS, AND WE WERE GLAD THAT THERE WAS AN ACTIVE JAPANESE INTEREST IN THEM. WE WERE PARTICULARLY PLEASED THAT AN ANGLO/JAPANESE
CONSORTIUM WAS INTERESTED IN THE LANTAU FIXED LINK
CONTRACT. SUCCESS BY THE CONSORTIUM WOULD BE A GOOD MESSAGE TO SEND TO HONG KONG AND THE CHINESE. ALTHOUGH THE CHINESE GOVERNMENT REMAINED DOUBTFUL ABOUT LARGE PROJECTS IN HONG KONG, EVIDENCE THAT THEY WERE PROCEEDING WITH PROPER FINANCIAL ARRANGEMENTS WOULD BE HELPFUL.
NAKAYAMA AGREED.
9.
THE SECRETARY OF STATE URGED JAPAN TO UNDERTAKE SOON A
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