China
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with those with real expertise (IFIs
IMF/IBRD).
G
in particular
Wrong to prejudge conclusions of preliminary EC
analysis. Quite likely that best way forward is not through eg new loan facilities for Soviet Union but through increased training and know-how programmes.
The Japanese have circulated a paper to G7 partners
calling for a full exchange of views on policy towards
China at Houston. This stresses (a) the need not to
isolate China and (b) the importance of stability in
China as reasons for the West to relax its stance. The Japanese concern also reflects their wish to go ahead with the third Yen development loan (Yen 810bn, roughly
US$
) stalled on account of last June's events. They have put partners on notice that they intend to go
ahead with the loan following Houston. The Japanese are
keen to avoid any declaration at Houston that further
restricts Western countries' dealings with China.
We have argued for a similar approach within the EC recommending a further relaxation of the Madrid Declaration measures against China (in particular of the suspension of Ministerial and high level contacts and of concessional finance for development projects). We have not sought relaxation of the suspension of arms sales and high level military contacts. There has, however, been no consensus among the Twelve for a relaxation. France
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